STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., DEPOSITOR U.S. BANK NATIONAL ASSOCIATION, TRUSTEE WELLS FARGO BANK, N.A., MASTER SERVICER AND SECURITIES ADMINISTRATOR and EMC MORTGAGE CORPORATION, SELLER AMENDED AND RESTATED POOLING AND SERVICING...
STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
U.S.
BANK
NATIONAL ASSOCIATION,
TRUSTEE
▇▇▇▇▇
FARGO BANK, N.A.,
MASTER
SERVICER AND SECURITIES ADMINISTRATOR
and
EMC
MORTGAGE CORPORATION,
SELLER
AMENDED
AND RESTATED POOLING AND SERVICING AGREEMENT
Dated
as
of August 24, 2006
Structured
Asset Mortgage Investments II Inc.
Bear
▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates
Series
2006-2
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
ARTICLE
II CONVEYANCE
OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section
2.01 Conveyance
of Mortgage Loans to Trustee.
Section
2.02 Acceptance
of Mortgage Loans by Trustee.
Section
2.03 Assignment
of Interest in the Mortgage Loan Purchase Agreement.
Section
2.04 Substitution
of Mortgage Loans.
Section
2.05 Issuance
of Certificates.
Section
2.06 Representations
and Warranties Concerning the Depositor.
ARTICLE
III ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
3.01 Master
Servicer.
Section
3.02 REMIC-Related
Covenants.
Section
3.03 Monitoring
of Servicers.
Section
3.04 Fidelity
Bond.
Section
3.05 Power
to
Act; Procedures.
Section
3.06 Due-on-Sale
Clauses; Assumption Agreements.
Section
3.07 Release
of Mortgage Files.
Section
3.08 Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
Section
3.09 Standard
Hazard Insurance and Flood Insurance Policies.
Section
3.10 Presentment
of Claims and Collection of Proceeds.
Section
3.11 Maintenance
of the Primary Mortgage Insurance Policies.
Section
3.12 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
Section
3.13 Realization
Upon Defaulted Mortgage Loans.
Section
3.14 Compensation
for the Master Servicer.
Section
3.15 REO
Property.
Section
3.16 Annual
Officer’s Certificate as to Compliance.
Section
3.17 Annual
Independent Accountant’s Servicing Report.
Section
3.18 Reports
Filed with Securities and Exchange Commission.
Section
3.19 UCC.
Section
3.20 Optional
Purchase of Defaulted Mortgage Loans.
ARTICLE
IV ACCOUNTS
Section
4.01 Protected
Accounts.
Section
4.02 [Reserved].
Section
4.03 [Reserved].
Section
4.04 Distribution
Account.
Section
4.05 Permitted
Withdrawals and Transfers from the Distribution Account.
ARTICLE
V
CERTIFICATES
Section
5.01 Certificates.
Section
5.02 Registration
of Transfer and Exchange of Certificates.
Section
5.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
Section
5.04 Persons
Deemed Owners.
Section
5.05 Transfer
Restrictions on Residual Certificates.
Section
5.06 Restrictions
on Transferability of Certificates.
Section
5.07 ERISA
Restrictions.
Section
5.08 Rule
144A
Information.
Section
5.09 Appointment
of Paying Agent and Certificate Registrar.
ARTICLE
VI PAYMENTS
TO CERTIFICATEHOLDERS
Section
6.01 Distributions
on the Certificates.
Section
6.02 Allocation
of Losses.
Section
6.03 Payments.
Section
6.04 Statements
to Certificateholders.
Section
6.05 Monthly
Advances.
Section
6.06 Compensating
Interest Payments.
ARTICLE
VII THE
MASTER SERVICER
Section
7.01 Liabilities
of the Master Servicer.
Section
7.02 Merger
or
Consolidation of the Master Servicer.
Section
7.03 Indemnification
of the Trustee, the Master Servicer and the Securities
Administrator.
Section
7.04 Limitations
on Liability of the Master Servicer and Others.
Section
7.05 Master
Servicer Not to Resign.
Section
7.06 Successor
Master Servicer.
Section
7.07 Sale
and
Assignment of Master Servicing.
ARTICLE
VIII DEFAULT
Section
8.01 Events
of
Default.
Section
8.02 Trustee
to Act; Appointment of Successor.
Section
8.03 Notification
to Certificateholders.
Section
8.04 Waiver
of
Defaults.
Section
8.05 List
of
Certificateholders.
ARTICLE
IX CONCERNING
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section
9.01 Duties
of
Trustee.
Section
9.02 Certain
Matters Affecting the Trustee and the Securities Administrator.
Section
9.03 Trustee
and Securities Administrator Not Liable for Certificates or Mortgage
Loans.
Section
9.04 Trustee
and Securities Administrator May Own Certificates.
Section
9.05 Trustee’s
and Securities Administrator’s Fees and Expenses.
Section
9.06 Eligibility
Requirements for Trustee, Paying Agent and Securities
Administrator.
Section
9.07 Insurance.
Section
9.08 Resignation
and Removal of the Trustee and Securities Administrator.
Section
9.09 Successor
Trustee, Successor Paying Agent and Successor Securities
Administrator.
Section
9.10 Merger
or
Consolidation of Trustee, Paying Agent or Securities Administrator.
Section
9.11 Appointment
of Co-Trustee or Separate Trustee.
Section
9.12 Federal
Information Returns and Reports to Certificateholders; REMIC
Administration.
ARTICLE
X
TERMINATION
Section
10.01 Termination
Upon Repurchase by the Depositor or its Designee or Liquidation of the Mortgage
Loans.
Section
10.02 Additional
Termination Requirements.
ARTICLE
XI [RESERVED]
ARTICLE
XII MISCELLANEOUS
PROVISIONS
Section
12.01 Intent
of
Parties.
Section
12.02 Amendment.
Section
12.03 Recordation
of Agreement.
Section
12.04 Limitation
on Rights of Certificateholders.
Section
12.05 Acts
of
Certificateholders.
Section
12.06 Governing
Law.
Section
12.07 Notices.
Section
12.08 Severability
of Provisions.
Section
12.09 Successors
and Assigns.
Section
12.10 Article
and Section Headings.
Section
12.11 Counterparts.
Section
12.12 Notice
to
Rating Agencies.
EXHIBITS
|
Exhibit
A-1
|
-
|
|
|
Exhibit
A-2
|
-
|
Form
of Class B Certificates
|
|
Exhibit
A-3
|
-
|
Form
of Class R Certificates
|
|
Exhibit
B
|
-
|
Mortgage
Loan Schedule
|
|
Exhibit
C
|
-
|
[Reserved]
|
|
Exhibit
D
|
-
|
Request
for Release of Documents
|
|
Exhibit
E
|
-
|
Form
of Affidavit pursuant to Section
860E(e)(4)
|
|
Exhibit
F-1
|
-
|
Form
of Investment Letter
|
|
Exhibit
F-2
|
-
|
Form
of Rule 144A and Related Matters
Certificate
|
|
Exhibit
G
|
-
|
Form
of Custodial Agreement
|
|
Exhibit
H-1 to H-4
|
-
|
Servicing
Agreements
|
|
Exhibit
I
|
-
|
Assignment
Agreements
|
|
Exhibit
J
|
-
|
Mortgage
Loan Purchase Agreement
|
|
Exhibit
K
|
-
|
[Reserved]
|
|
Exhibit
L
|
-
|
Form
of Back-Up Certification
|
|
Exhibit
M
|
Servicing
Criteria to Be Addressed in Assessment of
Compliance
|
|
Exhibit
N
|
Form
10-D, Form 8-K and Form 10-K Reporting
Responsibility
|
|
Exhibit
O
|
Additional
Disclosure Notification
|
AMENDED
AND RESTATED POOLING AND SERVICING AGREEMENT
Amended
and Restated Pooling and Servicing Agreement dated as of August 24, 2006, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the “Depositor”), U.S. Bank National Association, a national banking
association, as trustee (the “Trustee”), ▇▇▇▇▇ Fargo Bank, N.A., as master
servicer (in such capacity, the “Master Servicer”) and as securities
administrator (in such capacity, the “Securities Administrator”), and EMC
Mortgage Corporation, as seller (in such capacity, the “Seller”).
PRELIMINARY
STATEMENT
On
or
prior to the Closing Date, the Depositor acquired the Mortgage Loans from the
Seller. On the Closing Date, the Depositor will sell the Mortgage Loans and
certain other property to the Trust Fund and receive in consideration therefor
Certificates evidencing the entire beneficial ownership interest in the Trust
Fund.
The
Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC I to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC I Regular Interests will be designated the
“regular interests” in such REMIC, and the Class R-I Certificates will be
designated the sole class of “residual interests” in such REMIC.
The
Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC II to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC II Regular Interests will be designated the
“regular interests” in such REMIC, and the Class R-II Certificates will be
designated the sole class of “residual interests” in such REMIC.
The
Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC III to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the Regular Certificates will be designated the “regular
interests” in such REMIC, and the Class R-III Certificates will be designated
the sole class of “residual interests” in such REMIC.
The
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off
Date,
of $1,186,926,935.75. The initial principal amount of the Certificates will
not
exceed such Outstanding Principal Balance. The Group I Mortgage Loans will
have
an Outstanding Principal Balance as of the Cut-off Date, after deducting all
Scheduled Principal due on or before the Cut-off Date, of $57,194,722.80. The
Group II Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $611,499,746.08. The Group III Mortgage Loans will have an
Outstanding Principal Balance as of the Cut-off Date, after deducting all
Scheduled Principal due on or before the Cut-off Date, of $216,658,543.71.
The
Group IV Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $301,573,923.16.
In
consideration of the mutual agreements herein contained, the Depositor, the
Master Servicer, the Securities Administrator, the Seller and the Trustee agree
as follows:
ARTICLE
I
DEFINITIONS
Whenever
used in this Agreement, the following words and phrases, unless otherwise
expressly provided or unless the context otherwise requires, shall have the
meanings specified in this Article.
Accepted
Master Servicing Practices:
With
respect to any Mortgage Loan, those customary mortgage servicing practices
of
prudent mortgage servicing institutions that master service mortgage loans
of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a
Servicer).
Account:
The
Distribution Account and the Protected Account as the context may
require.
Accrued
Certificate Interest:
For any
Certificate, other than the Class R Certificates, for any Distribution Date,
the
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the Current Principal Amount, or in the case of the
Interest Only Certificates, the Notional Amount, of such Certificate immediately
prior to such Distribution Date, on the basis of a 360-day year consisting
of
twelve 30-day months, less (i) in the case of a Senior Certificate, such
Certificate’s share of any Net Interest Shortfall from the related Mortgage
Loans and, after the Cross-Over Date, the interest portion of any Realized
Losses on the related Mortgage Loans allocated thereto in accordance with
Section 6.02(g) and (ii) in the case of a Subordinate Certificate, such
Certificate’s share of any Net Interest Shortfall from the related Mortgage
Loans and the interest portion of any Realized Losses on the related Mortgage
Loans allocated thereto in accordance with Section 6.02(g).
Additional
Disclosure:
As
defined in Section 3.18.
Additional
Form 10-D Disclosure:
As
defined in Section 3.18.
Additional
Form 10-K Disclosure:
As
defined in Section 3.18.
Affiliate:
As to
any Person, any other Person controlling, controlled by or under common control
with such Person. “Control” means the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise. “Controlled” and “Controlling” have
meanings correlative to the foregoing. The Trustee may conclusively presume
that
a Person is not an Affiliate of another Person unless a Responsible Officer
of
the Trustee has actual knowledge to the contrary.
Aggregate
Expense Rate:
With
respect to any Mortgage Loan, the sum of the Servicing Fee Rate and the
Lender-Paid PMI Rate (if applicable).
Agreement:
This
Pooling and Servicing Agreement and all amendments hereof and supplements
hereto.
Allocable
Share:
With
respect to each Class of Subordinate Certificates:
(a) as
to any
Distribution Date and amounts distributable pursuant to clauses (i) and (iv)
of
the definition of Subordinate Optimal Principal Amount, the fraction, expressed
as a percentage, the numerator of which is the Current Principal Amount of
such
Class and the denominator of which is the aggregate Current Principal Amount
of
all Classes of the Subordinate Certificates; and
(b) as
to any
Distribution Date and amounts distributable pursuant to clauses (ii), (iii)
and
(v) of the definition of Subordinate Optimal Principal Amount, and as to each
Class of Subordinate Certificates (other than the Class of Subordinate
Certificates having the lowest numerical designation as to which the Class
Prepayment Distribution Trigger shall not be applicable) for which (x) the
Class
Prepayment Distribution Trigger has been satisfied on such Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the Current
Principal Amount of such Class and the denominator of which is the aggregate
Current Principal Amount of all such Classes of Subordinate Certificates and
(y)
the Class Prepayment Distribution Trigger has not been satisfied on such
Distribution Date, 0%; provided that if on a Distribution Date, the Current
Principal Amount of any Class of Subordinate Certificates for which the Class
Prepayment Distribution Trigger was satisfied on such Distribution Date is
reduced to zero, any amounts distributed pursuant to this clause (b), to the
extent of such Class’s remaining Allocable Share, shall be distributed to the
remaining Classes of Subordinate Certificates which satisfy the Class Prepayment
Distribution Trigger and to the Class of Subordinate Certificates having the
lowest numerical Class designation in reduction of their respective Current
Principal Amounts in the order of their numerical Class
designations.
Annual
Statement of Compliance:
As
defined in Section 3.16.
Applicable
Credit Rating:
For any
long-term deposit or security, a credit rating of AAA in the case of each of
S&P and Fitch. For any short-term deposit or security, a rating of A-l+ in
the case of S&P or F-1+ in the case of Fitch.
Applicable
State Law:
For
purposes of Section 9.12(d), the Applicable State Law shall be (a) the law
of
the State of New York and (b) such other state law whose applicability shall
have been brought to the attention of the Securities Administrator and the
Trustee by either (i) an Opinion of Counsel reasonably acceptable to the
Securities Administrator and the Trustee delivered to it by the Master Servicer
or the Depositor, or (ii) written notice from the appropriate taxing authority
as to the applicability of such state law.
Appraised
Value:
For any
Mortgaged Property related to a Mortgage Loan, the amount set forth as the
appraised value of such Mortgaged Property in an appraisal made for the mortgage
originator in connection with its origination of the related Mortgage
Loan.
Assignment
Agreements:
The
agreements attached hereto as Exhibit I, whereby the Servicing Agreements were
assigned to the Trustee for the benefit of the Certificateholders.
Assessment
of Compliance:
As
defined in Section 3.17.
Assumed
Final Distribution Date:
July
25, 2036, or if such day is not a Business Day, the next succeeding Business
Day.
Attesting
Party:
As
defined in Section 3.17.
Attestation
Report:
As
defined in Section 3.17.
Available
Funds:
With
respect to any Distribution Date, the sum of the Group I, Group II, Group III
and Group IV Available Funds for such Distribution Date.
Average
Loss Severity Percentage:
With
respect to any Distribution Date and each Loan Group, the percentage equivalent
of a fraction, the numerator of which is the sum of the Loss Severity
Percentages for each Mortgage Loan in such Loan Group which had a Realized
Loss
and the denominator of which is the number of Mortgage Loans in the related
Loan
Group which had Realized Losses.
Bank
of America:
Bank of
America, National Association.
Bank
of America Servicing Agreement:
The
Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement, dated
as
of April 1 2005, by and between Bank of America and EMC Mortgage Corporation,
as
modified by the Regulation AB Compliance Addendum to the Amended and Restated
Flow Mortgage Loan Sale and Servicing Agreement dated as of December 21,
2005.
Bankruptcy
Code:
The
United States Bankruptcy Code, as amended as codified in 11 U.S.C.
§§101-1330.
Bankruptcy
Loss:
With
respect to any Mortgage Loan, any Deficient Valuation or Debt Service Reduction
related to such Mortgage Loan as reported by the applicable Servicer to the
Master Servicer.
Book-Entry
Certificates:
Initially, all Classes of Certificates other than the Private Certificates
and
the Residual Certificates.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a day on which the New York
Stock
Exchange or Federal Reserve is closed or on which banking institutions in the
jurisdiction in which the Trustee, the Master Servicer, any Servicer or the
Securities Administrator is located are authorized or obligated by law or
executive order to be closed.
Certificate:
Any
mortgage pass-through certificate evidencing a beneficial ownership interest
in
the Trust Fund signed and countersigned by the Certificate Registrar in
substantially the forms annexed hereto as Exhibits ▇-▇, ▇-▇ and A-3 with the
blanks therein appropriately completed.
Certificate
Group:
The
Group I Senior Certificates, Group II Senior Certificates, Group III Senior
Certificates and Group IV Senior Certificates, as applicable.
Certificate
Owner:
Any
Person who is the beneficial owner of a Certificate registered in the name
of
the Depository or its nominee.
Certificate
Register:
The
register maintained pursuant to Section 5.02.
Certificate
Registrar:
The
Securities Administrator or any successor certificate registrar appointed
hereunder.
Certificateholder:
A
Holder of a Certificate.
Class:
With
respect to the Certificates, ▇-▇-▇, ▇-▇-▇, ▇▇-▇-▇, ▇▇-▇-▇, ▇▇-▇, ▇▇▇-▇-▇,
III-A-2, III-A-3, III-X, IV-A-1, IV-A-2, R-I, R-II, R-III, ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇ and B-6.
Class
Prepayment Distribution Trigger:
For a
Class of Subordinate Certificates for any Distribution Date, the Class
Prepayment Distribution Trigger is satisfied if the fraction (expressed as
a
percentage), the numerator of which is the aggregate Current Principal Amount
of
such Class and each Class of Subordinate Certificates subordinate thereto,
if
any, and the denominator of which is the Scheduled Principal Balance of all
of
the Mortgage Loans as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.
Class
R Certificates:
The
Class R-I, Class R-II and Class R-III Certificates.
Class
R-I Deposit:
The $50
deposit into the Distribution Account by the Depositor on the Closing Date
to
pay the Class R-I Certificates in accordance with Section 6.01(a) on the
Distribution Date occurring in June 2006.
Class
R-II Deposit:
The $50
deposit into the Distribution Account by the Depositor on the Closing Date
to
pay the Class R-II Certificates in accordance with Section 6.01(a) on the
Distribution Date occurring in June 2006.
Class
R-III Deposit:
The $50
deposit into the Distribution Account by the Depositor on the Closing Date
to
pay the Class R-III Certificates in accordance with Section 6.01(a) on the
Distribution Date occurring in June 2006.
Closing
Date:
May 31,
2006.
Code:
The
Internal Revenue Code of 1986, as amended.
Compensating
Interest Payment:
As
defined in Section 6.06.
Countrywide:
Countrywide Home Loans Servicing LP, or its successor in interest.
Countrywide
Servicing Agreement:
The
Seller’s Warranties and Servicing Agreement, dated as of September 1, 2002, as
amended by Amendment No. 1, dated January 1, 2003, Amendment No.2, dated
September 1, 2004 and Amendment Reg AB to the Master Mortgage Loan Purchase
and
Servicing Agreement, dated as of January 1, 2006, by and between the EMC
Mortgage Corporation and Countrywide Home Loans, Inc.
Corresponding
Certificates:
With
respect to each REMIC II Regular Interest, the Class with the same
designation.
Corporate
Trust Office:
The
office of the Trustee at which at any particular time its corporate trust
business is administered, which office, at the date of the execution of this
Agreement, is located at U.S. Bank Corporate Trust Services, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services/BSARM Series
2006-2. With respect to the Certificate Registrar and the presentment of
Certificates for registration of transfer, exchange or final payment, ▇▇▇▇▇
Fargo Bank, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust/ BSARM Series 2006-2,
and for all other purposes, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or for
overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇),
Attention: Corporate Trust/ BSARM Series 2006-2.
Cross-Over
Date:
The
first Distribution Date on which the aggregate Current Principal Amount of
the
Subordinate Certificates has been reduced to zero (giving effect to all
distributions on such Distribution Date).
Current
Principal Amount:
With
respect to any Certificate as of any Distribution Date, the initial principal
amount of such Certificate plus any Subsequent Recoveries added to the Current
Principal Amount of such Certificate pursuant to Section 6.02(h), and reduced
by
(i) all amounts distributed on previous Distribution Dates on such Certificate
with respect to principal, (ii) the principal portion of all Realized Losses
allocated prior to such Distribution Date to such Certificate, taking account
of
the Loss Allocation Limitation and (iii) in the case of a Subordinate
Certificate, such Certificate’s pro rata share, if any, of the applicable
Subordinate Certificate Writedown Amount for previous Distribution Dates. With
respect to any Class of Certificates, the Current Principal Amount thereof
will
equal the sum of the Current Principal Amounts of all Certificates in such
Class. Notwithstanding the foregoing, solely for purposes of giving consents,
directions, waivers, approvals, requests and notices, the Class R-I, Class
R-II
and Class R-III Certificates after the Distribution Date on which they each
receive the distribution of the last dollar of their respective original
principal amount shall be deemed to have Current Principal Amounts equal to
their respective Current Principal Amounts on the day immediately preceding
such
Distribution Date.
Custodial
Agreement:
An
agreement, dated as of the Closing Date among the Depositor, the Master
Servicer, the Trustee and the Custodian in substantially the form of Exhibit
G
hereto.
Custodian:
▇▇▇▇▇
Fargo Bank, N.A., or any successor custodian appointed pursuant to the
provisions hereof and of the Custodial Agreement.
Cut-off
Date:
May 1,
2006.
Cut-off
Date Balance:
$1,186,926,935.75.
Debt
Service Reduction:
Any
reduction of the Scheduled Payments which a Mortgagor is obligated to pay with
respect to a Mortgage Loan as a result of any proceeding under the Bankruptcy
Code or any other similar state law or other proceeding.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation of the Mortgaged Property by a court
of competent jurisdiction in an amount less than the then outstanding
indebtedness under the Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code or any other similar state law or other
proceeding.
Delinquent:
A
Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to
the terms of such Mortgage Loan by the close of business on the day such payment
is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment
has not been received by the close of business on the last day of the month
in
which such payment was due. For example, a Mortgage Loan with a payment due
on
December 1 that remained unpaid as of the close of business on December 31
would
then be considered to be 30 to 59 days delinquent. Similarly for “60 days
delinquent,” “90 days delinquent” and so on.
The
determination as to whether a Mortgage Loan falls into these categories is
made
as of the close of business on the last Business Day of each month. This
method of determining delinquencies is also referred to as the MBA
method.
Depositor:
Structured Asset Mortgage Investments II Inc., a Delaware corporation, or its
successors in interest.
Depository:
The
Depository Trust Company, the nominee of which is Cede & Co., or any
successor thereto.
Depository
Agreement:
The
meaning specified in Subsection 5.01(a) hereof.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Designated
Depository Institution:
A
depository institution (commercial bank, federal savings bank, mutual savings
bank or savings and loan association) or trust company (which may include the
Trustee), the deposits of which are fully insured by the FDIC to the extent
provided by law.
Determination
Date:
With
respect to each Mortgage Loan, the Determination Date as defined in the related
Servicing Agreement.
Disqualified
Organization:
Any of
the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation
if
all of its activities are subject to tax and, except for the ▇▇▇▇▇▇▇ Mac or
any
successor thereto, a majority of its board of directors is not selected by
such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers’ cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the
tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C)
of
the Code or (v) any other Person so designated by the Trustee and the
Certificate Registrar based upon an Opinion of Counsel that the holding of
an
ownership interest in a Residual Certificate by such Person may cause any REMIC
contained in the Trust or any Person having an ownership interest in the
Residual Certificate (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but
for
the transfer of an ownership interest in a Residual Certificate to such Person.
The terms “United States,” “State” and “international organization” shall have
the meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution
Account:
The
trust account or accounts created and maintained pursuant to Section 4.04,
which
shall be denominated “▇▇▇▇▇ Fargo Bank, National Association, as Paying Agent,
for the benefit of the registered holders of Structured Asset Mortgage
Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates,
Series 2006-2 - Distribution Account.” The Distribution Account shall be an
Eligible Account.
Distribution
Date:
The
25th day of any month, beginning in the month immediately following the month
of
the Closing Date, or, if such 25th day is not a Business Day, the Business
Day
immediately following.
DTC
Custodian:
▇▇▇▇▇
Fargo Bank, N.A., or its successors in interest as custodian for the
Depository.
Due
Date:
With
respect to each Mortgage Loan, the date in each month on which its Scheduled
Payment is due if such due date is the first day of a month and otherwise is
deemed to be the first day of the following month or such other date specified
in the related Servicing Agreement.
Due
Period:
With
respect to any Distribution Date and each Mortgage Loan, the period commencing
on the second day of the month preceding the month in which the Distribution
Date occurs and ending at the close of business on the first day of the month
in
which the Distribution Date occurs.
▇▇▇▇▇:
As
defined in Section 3.18.
Eligible
Account:
Any of
(i) a segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-2 or better
by
S&P and P-1 by ▇▇▇▇▇’▇ at the time of any deposit therein or (B) insured by
the FDIC (to the limits established by such Corporation), the uninsured deposits
in which account are otherwise secured such that, as evidenced by an Opinion
of
Counsel (obtained by the Person requesting that the account be held pursuant
to
this clause (i)) delivered to the Trustee prior to the establishment of such
account, the Certificateholders will have a claim with respect to the funds
in
such account and a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments, each of which
shall
mature not later than the Business Day immediately preceding the Distribution
Date next following the date of investment in such collateral or the
Distribution Date if such Permitted Investment is an obligation of the
institution that maintains the Distribution Account) securing such funds that
is
superior to claims of any other depositors or general creditors of the
depository institution with which such account is maintained, (ii) a segregated
trust account or accounts maintained with a federal or state chartered
depository institution or trust company with trust powers acting in its
fiduciary capacity or (iii) a segregated account or accounts of a depository
institution acceptable to the Rating Agencies (as evidenced in writing by the
Rating Agencies that use of any such account as the Distribution Account will
not have an adverse effect on the then-current ratings assigned to the Classes
of Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.
EMC:
EMC
Mortgage Corporation, or its successor in interest.
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
Event
of Default:
An
event of default described in Section 8.01.
Excess
Liquidation Proceeds:
To the
extent that such amount is not required by law to be paid to the related
Mortgagor, the amount, if any, by which Liquidation Proceeds with respect to
a
Liquidated Mortgage Loan exceed the sum of (i) the Outstanding Principal Balance
of such Mortgage Loan and accrued but unpaid interest at the related Mortgage
Interest Rate through the last day of the month in which the related Liquidation
Date occurs, plus (ii) related Liquidation Expenses.
Exchange
Act:
Securities Exchange Act of 1934, as amended.
Exchange
Act Reports:
Any
reports required to be filed pursuant to Section 3.18 of this
Agreement.
▇▇▇▇▇▇
▇▇▇:
Federal
National Mortgage Association or any successor thereto.
FDIC:
Federal
Deposit Insurance Corporation or any successor thereto.
Final
Certification:
The
certification substantially in the form of Exhibit Three to the Custodial
Agreement.
Fiscal
Quarter:
December 1 to February 29 (or the last day in such month), March 1 to May 31,
June 1 to August 31, or September 1 to November 30, as applicable.
Fitch:
Fitch,
Inc.
Fractional
Undivided Interest:
With
respect to any Class of Certificates, the fractional undivided interest
evidenced by any Certificate of such Class the numerator of which is the Current
Principal Amount of such Certificate and the denominator of which is the Current
Principal Amount of such Class. With respect to the Certificates in the
aggregate, the fractional undivided interest evidenced by (i) each Class of
Residual Certificates will be deemed to equal 0.25% multiplied by the percentage
interest of such Residual Certificate and (ii) a Certificate of any other Class
will be deemed to equal 99.25% multiplied by a fraction, the numerator of which
is the Current Principal Amount of such Certificate and the denominator of
which
is the aggregate Current Principal Amount of all the Certificates.
▇▇▇▇▇▇▇
Mac:
▇▇▇▇▇▇▇
Mac, formerly the Federal Home Loan Mortgage Corporation, or any successor
thereto.
Global
Certificate:
Any
Private Certificate registered in the name of the Depository or its nominee,
beneficial interests in which are reflected on the books of the Depository
or on
the books of a Person maintaining an account with such Depository (directly
or
as an indirect participant in accordance with the rules of such
depository).
GMAC
Mortgage:
GMAC
Mortgage Corporation, or its successor in interest.
GMAC
Mortgage Servicing Agreement:
The
Seller’s Warranties and Servicing Agreement, dated as of May 1, 2001, as amended
by Amendment No. 1 on October 1, 2001 and Amendment No. 2 on July 31, 2002
between the Seller and GMAC Mortgage, attached hereto as H-1, as modified by
the
related Assignment Agreement.
Gross
Margin:
As to
each Mortgage Loan, the fixed percentage set forth in the related Mortgage
Note
and indicated on the Mortgage Loan Schedule which percentage is added to the
related Index on each Interest Adjustment Date to determine (subject to
rounding, the minimum and maximum Mortgage Interest Rate and the Periodic Rate
Cap) the Mortgage Interest Rate until the next Interest Adjustment
Date.
Group
I Available Funds, Group II Available Funds, Group III Available Funds and
Group
IV Available Funds:
With
respect to any Distribution Date, an amount equal to the aggregate of the
following amounts with respect to the Mortgage Loans in the related Loan Group:
(a) all previously undistributed payments on account of principal (including
the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Net Liquidation Proceeds) and all previously undistributed payments
on account of interest received after the Cut-off Date and on or prior to the
related Determination Date, (b) any Monthly Advances and Compensating Interest
Payments by the Servicers or the Master Servicer with respect to such
Distribution Date and (c) any reimbursed amount in connection with losses on
investments of deposits in an account, except:
(i) all
payments that were due on or before the Cut-off Date;
(ii) all
Principal Prepayments and Liquidation Proceeds received after the applicable
Prepayment Period;
(iii) all
payments, other than Principal Prepayments, that represent early receipt of
Scheduled Payments due on a date or dates subsequent to the related Due
Date;
(iv) amounts
received on particular Mortgage Loans as late payments of principal or interest
and respecting which, and to the extent that, there are any unreimbursed Monthly
Advances;
(v) amounts
representing Monthly Advances determined to be Nonrecoverable
Advances;
(vi) any
investment earnings on amounts on deposit in the Distribution Account and
amounts permitted to be withdrawn from the Distribution Account pursuant to
this
Agreement;
(vii) amounts
needed to pay the Servicing Fees or to reimburse any Servicer or the Master
Servicer for amounts due under the applicable Servicing Agreement and the
Agreement to the extent such amounts have not been retained by, or paid
previously to, such Servicer or the Master Servicer;
(viii) any
fees
payable under any lender-paid primary mortgage insurance policy;
and
(ix) any
expenses or other amounts reimbursable to the Trustee, the Securities
Administrator and the Custodian pursuant to Section 7.04(c) or Section
9.05.
Group
I Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule.
Group
I Senior Certificates:
The
Class I-A-1 Certificates and Class I-A-2 Certificates.
Group
I Senior Optimal Principal Amount, Group II Senior Optimal Principal Amount,
Group III Senior Optimal Principal Amount and Group IV Senior Optimal Principal
Amount:
With
respect to each Distribution Date, an amount equal to the sum, without
duplication, of the following (but in no event greater than the aggregate
Current Principal Amount of the Group I, Group II, Group III or Group IV Senior
Certificates, as applicable, immediately prior to such Distribution
Date):
(i) the
applicable Senior Percentage of the principal portion of all Scheduled Payments
due on each Outstanding Mortgage Loan in the related Loan Group on the related
Due Date as specified in the amortization schedule at the time applicable
thereto (after adjustments for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period);
(ii) the
applicable Senior Prepayment Percentage of the Scheduled Principal Balance
of
each Mortgage Loan in the related Loan Group which was the subject of a
Principal Prepayment in full received by the Servicers during the related
Prepayment Period;
(iii) the
applicable Senior Prepayment Percentage of all Principal Prepayments in part
received by the Servicers during the related Prepayment Period with respect
to
each Mortgage Loan in the related Loan Group;
(iv) the
lesser of (a) the applicable Senior Prepayment Percentage of the sum of (A)
all
Net Liquidation Proceeds allocable to principal received in respect of each
Mortgage Loan in the related Loan Group which became a Liquidated Mortgage
Loan
during the related Prepayment Period (other than Mortgage Loans described in
the
immediately following clause (B)) and all Subsequent Recoveries received in
respect of each Liquidated Mortgage Loan in the related Loan Group during the
related Due Period and (B) the Scheduled Principal Balance of each such Mortgage
Loan in the related Loan Group purchased by an insurer from the Trustee during
the related Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any, or otherwise; and (b) the applicable Senior Percentage of the
sum of (A) the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which became a Liquidated Mortgage Loan during the related Prepayment
Period (other than the Mortgage Loans described in the immediately following
clause (B)) and (B) the Scheduled Principal Balance of each such Mortgage Loan
in the related Loan Group that was purchased by an insurer from the Trust during
the related Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any or otherwise; and
(v) the
applicable Senior Prepayment Percentage of the sum of (a) the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group which was
repurchased by the Seller in connection with such Distribution Date and (b)
the
excess, if any, of the Scheduled Principal Balance of each Mortgage Loan in
the
related Loan Group that has been replaced by the Seller with a Substitute
Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in connection
with such Distribution Date over the Scheduled Principal Balance of each such
Substitute Mortgage Loan.
Group
I Senior Percentage:
Initially, 95.50%. On any Distribution Date, the lesser of (i) 100% and (ii)
the
percentage (carried to six places rounded up) obtained by dividing the aggregate
Current Principal Amount of the Group I Senior Certificates immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance
of
the Group I Mortgage Loans as of the beginning of the related Due
Period.
Group
I Senior Prepayment Percentage:
On any
Distribution Date occurring during the periods set forth below, as
follows:
|
Period
(dates inclusive)
|
Group
I Senior Prepayment Percentage
|
|
June
25, 2006 - May
25, 2013
|
100%
|
|
June
25, 2013 - May 25, 2014
|
Group
I Senior Percentage plus 70% of the Group I Subordinate
Percentage
|
|
June
25, 2014 - May 25, 2015
|
Group
I Senior Percentage plus 60% of the Group I Subordinate
Percentage
|
|
June
25, 2015 - May 25, 2016
|
Group
I Senior Percentage plus 40% of the Group I Subordinate
Percentage
|
|
June
25, 2016 - May 25, 2017
|
Group
I Senior Percentage plus 20% of the Group I Subordinate
Percentage
|
|
June
25, 2017 and thereafter
|
Group
I Senior Percentage
|
In
addition, no reduction of the Group I Senior Prepayment Percentage shall occur
on any Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (A) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last
six
months, as a percentage of the sum of the aggregate Current Principal Amount
of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of
the
Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2013 and May 2014, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2014 and
May
2015, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2015 and May 2016, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2016 and May 2017, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June
2017.
In
addition, if on any Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and bankruptcy and
such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage
of
the aggregate Current Principal Amount of the Subordinate Certificates does
not
exceed 50% and (b)(i) on or prior to the Distribution Date in May 2009
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 20% of the Original Subordinate Principal
Balance and (ii) after the Distribution Date in May 2009 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period
do
not exceed 30% of the Original Subordinate Principal Balance, then, the Group
I
Senior Prepayment Percentage for such Distribution Date will equal the Group
I
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than
two
times the initial weighted average of the Subordinate Percentages on or prior
to
the Distribution Date occurring in May 2009 and the above delinquency and loss
tests are met, then the Group I Senior Prepayment Percentage for such
Distribution Date will equal the Group I Senior Percentage plus 50% of the
Group
I Subordinate Percentage.
Notwithstanding
the foregoing, if on any Distribution Date, the percentage, the numerator of
which is the aggregate Current Principal Amount of the Senior Certificates
immediately preceding such Distribution Date, and the denominator of which
is
the Scheduled Principal Balance of the Mortgage Loans as of the beginning of
the
related Due Period, exceeds such percentage as of the Cut-off Date, then the
Group I Senior Prepayment Percentage for such Distribution Date will equal
100%.
On the Distribution Date on which the Current Principal Amounts of the Group
I
Senior Certificates are reduced to zero, the Group I Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group
I Subordinate Percentage:
On any
Distribution Date, 100% minus the Group I Senior Percentage.
Group
I Subordinate Prepayment Percentage:
With
respect to the Group I Mortgage Loans, on any Distribution Date, 100% minus
the
Group I Senior Prepayment Percentage, except that on any Distribution Date
after
the Current Principal Amounts of the Group I Senior Certificates have each
been
reduced to zero, if (a) the weighted average of the Subordinate Percentages
on
such Distribution Date equals or exceeds two times the initial weighted average
of the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose
any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which
the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group I
Subordinate Prepayment Percentage will equal 100%. If the test set forth in
the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group I Senior Certificates has each been reduced to
zero, then the Group I Subordinate Prepayment Percentage will equal zero for
such Distribution Date.
Group
II Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule.
Group
II Senior Certificates:
The
Class II-A-1, Class II-A-2 and Class II-X Certificates.
Group
II Senior Percentage:
Initially, 95.50%. On any Distribution Date, the lesser of (i) 100% and (ii)
the
percentage (carried to six places rounded up) obtained by dividing the aggregate
Current Principal Amount of the Group II Senior Certificates immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance
of
the Group II Mortgage Loans as of the beginning of the related Due
Period.
Group
II Senior Prepayment Percentage:
On any
Distribution Date occurring during the periods set forth below, as
follows:
|
Period
(dates inclusive)
|
Group
II Senior Prepayment Percentage
|
|
June
25, 2006 - May 25, 2013
|
100%
|
|
June
25, 2013 - May 25, 2014
|
Group
II Senior Percentage plus 70% of the Group II Subordinate
Percentage
|
|
June
25, 2014 - May 25, 2015
|
Group
II Senior Percentage plus 60% of the Group II Subordinate
Percentage
|
|
June
25, 2015 - May 25, 2016
|
Group
II Senior Percentage plus 40% of the Group II Subordinate
Percentage
|
|
June
25, 2016 - May 25, 2017
|
Group
II Senior Percentage plus 20% of the Group II Subordinate
Percentage
|
|
June
25, 2017 and thereafter
|
Group
II Senior Percentage
|
In
addition, no reduction of the Group II Senior Prepayment Percentage shall occur
on any Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (A) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last
six
months, as a percentage of the sum of the aggregate Current Principal Amount
of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including June
2013 and May 2014, (b) 35% of the Original Subordinate Principal Balance if
such
Distribution Date occurs between and including June 2014 and May 2015, (c)
40%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including June 2015 and May 2016, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2016 and May 2017, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June
2017.
In
addition, if on any Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and bankruptcy and
such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage
of
the aggregate Current Principal Amount of the Subordinate Certificates does
not
exceed 50% and (b)(i) on or prior to the Distribution Date in May 2009
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 20% of the Original Subordinate Principal
Balance and (ii) after the Distribution Date in May 2009 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period
do
not exceed 30% of the Original Subordinate Principal Balance, then, the Group
II
Senior Prepayment Percentage for such Distribution Date will equal the Group
II
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than
two
times the initial weighted average of the Subordinate Percentages on or prior
to
the Distribution Date occurring in May 2009 and the above delinquency and loss
tests are met, then the Group II Senior Prepayment Percentage for such
Distribution Date will equal the Group II Senior Percentage plus 50% of the
Group II Subordinate Percentage.
Notwithstanding
the foregoing, if on any Distribution Date, the percentage, the numerator of
which is the aggregate Current Principal Amount of the Senior Certificates
immediately preceding such Distribution Date, and the denominator of which
is
the Scheduled Principal Balance of the Mortgage Loans as of the beginning of
the
related Due Period, exceeds such percentage as of the Cut-off Date, then the
Group II Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group II Senior Certificates are reduced to zero, the Group II Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group
II Subordinate Percentage:
On any
Distribution Date, 100% minus the Group II Senior Percentage.
Group
II Subordinate Prepayment Percentage:
With
respect to the Group II Mortgage Loans, on any Distribution Date, 100% minus
the
Group II Senior Prepayment Percentage, except that on any Distribution Date
after the Current Principal Amounts of the Group II Senior Certificates have
each been reduced to zero, if (a) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans
with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 100%,
the Group II Subordinate Prepayment Percentage will equal 100%. If the test
set
forth in the preceding sentence is not satisfied on any Distribution Date after
the Current Principal Amount of the Group II Senior Certificates has each been
reduced to zero, then the Group II Subordinate Prepayment Percentage will equal
zero for such Distribution Date.
Group
III Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule.
Group
III Senior Certificates:
The
Class III-A-1, Class III-A-2, Class III-A-3 and Class III-X
Certificates.
Group
III Senior Percentage:
Initially, 95.50%. On any Distribution Date, the lesser of (i) 100% and (ii)
the
percentage (carried to six places rounded up) obtained by dividing the aggregate
Current Principal Amount of the Group III Senior Certificates immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance
of
the Group III Mortgage Loans as of the beginning of the related Due
Period.
Group
III Senior Prepayment Percentage:
On any
Distribution Date occurring during the periods set forth below, as
follows:
|
Period
(dates inclusive)
|
Group
III Senior Prepayment Percentage
|
|
June
25, 2006 - May 25, 2013
|
100%
|
|
June
25, 2013 - May 25, 2014
|
Group
III Senior Percentage plus 70% of the Group III Subordinate
Percentage
|
|
June
25, 2014 - May 25, 2015
|
Group
III Senior Percentage plus 60% of the Group III Subordinate
Percentage
|
|
June
25, 2015 - May 25, 2016
|
Group
III Senior Percentage plus 40% of the Group III Subordinate
Percentage
|
|
June
25, 2016 - May 25, 2017
|
Group
III Senior Percentage plus 20% of the Group III Subordinate
Percentage
|
|
June
25, 2017 and thereafter
|
Group
III Senior Percentage
|
In
addition, no reduction of the Group III Senior Prepayment Percentage shall
occur
on any Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (A) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last
six
months, as a percentage of the sum of the aggregate Current Principal Amount
of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including June
2013 and May 2014, (b) 35% of the Original Subordinate Principal Balance if
such
Distribution Date occurs between and including June 2014 and May 2015, (c)
40%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including June 2015 and May 2016, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2016 and May 2017, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June
2017.
In
addition, if on any Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and bankruptcy and
such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage
of
the aggregate Current Principal Amount of the Subordinate Certificates does
not
exceed 50% and (b)(i) on or prior to the Distribution Date in May
2009
cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and
(ii)
after the Distribution Date in May 2009 cumulative Realized Losses on the
Mortgage Loans as of the end of the related Prepayment Period do not exceed
30%
of the Original Subordinate Principal Balance, then, the Group III Senior
Prepayment Percentage for such Distribution Date will equal the Group III Senior
Percentage; provided, however, if on such Distribution Date the current weighted
average of the Subordinate Percentages is equal to or greater than two times
the
initial weighted average of the Subordinate Percentages on or prior to the
Distribution Date occurring in May 2009 and the above delinquency and loss
tests
are met, then the Group III Senior Prepayment Percentage for such Distribution
Date will equal the Group III Senior Percentage plus 50% of the Group III
Subordinate Percentage.
Notwithstanding
the foregoing, if on any Distribution Date, the percentage, the numerator of
which is the aggregate Current Principal Amount of the Senior Certificates
immediately preceding such Distribution Date, and the denominator of which
is
the Scheduled Principal Balance of the Mortgage Loans as of the beginning of
the
related Due Period, exceeds such percentage as of the Cut-off Date, then the
Group III Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group III Senior Certificates are reduced to zero, the Group III Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect
such
reduction and thereafter shall be zero.
Group
III Subordinate Percentage:
On any
Distribution Date, 100% minus the Group III Senior Percentage.
Group
III Subordinate Prepayment Percentage:
With
respect to the Group III Mortgage Loans, on any Distribution Date, 100% minus
the Group III Senior Prepayment Percentage, except that on any Distribution
Date
after the Current Principal Amounts of the Group III Senior Certificates have
each been reduced to zero, if (a) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans
with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 100%,
the Group III Subordinate Prepayment Percentage will equal 100%. If the test
set
forth in the preceding sentence is not satisfied on any Distribution Date after
the Current Principal Amount of the Group III Senior Certificates has each
been
reduced to zero, then the Group III Subordinate Prepayment Percentage will
equal
zero for such Distribution Date.
Group
IV Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule.
Group
IV Senior Certificates:
The
Class IV-A-1 Certificates and Class IV-A-2 Certificates.
Group
IV Senior Percentage:
Initially, 95.50%. On any Distribution Date, the lesser of (i) 100% and (ii)
the
percentage (carried to six places rounded up) obtained by dividing the aggregate
Current Principal Amount of the Group IV Senior Certificates immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance
of
the Group IV Mortgage Loans as of the beginning of the related Due
Period.
Group
IV Senior Prepayment Percentage:
On any
Distribution Date occurring during the periods set forth below, as
follows:
|
Period
(dates inclusive)
|
Group
III Senior Prepayment Percentage
|
|
June
25, 2006 - May 25, 2013
|
100%
|
|
June
25, 2013 - May 25, 2014
|
Group
IV Senior Percentage plus 70% of the Group IV Subordinate
Percentage
|
|
June
25, 2014 - May 25, 2015
|
Group
IV Senior Percentage plus 60% of the Group IV Subordinate
Percentage
|
|
June
25, 2015 - May 25, 2016
|
Group
IV Senior Percentage plus 40% of the Group IV Subordinate
Percentage
|
|
June
25, 2016 - May 25, 2017
|
Group
IV Senior Percentage plus 20% of the Group IV Subordinate
Percentage
|
|
June
25, 2017 and thereafter
|
Group
IV Senior Percentage
|
In
addition, no reduction of the Group IV Senior Prepayment Percentage shall occur
on any Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (A) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last
six
months, as a percentage of the sum of the aggregate Current Principal Amount
of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including June
2013 and May 2014, (b) 35% of the Original Subordinate Principal Balance if
such
Distribution Date occurs between and including June 2014 and May 2015, (c)
40%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including June 2015 and May 2016, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2016 and May 2017, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June
2017.
In
addition, if on any Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and bankruptcy and
such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage
of
the aggregate Current Principal Amount of the Subordinate Certificates does
not
exceed 50% and (b)(i) on or prior to the Distribution Date in May 2009
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 20% of the Original Subordinate Principal
Balance and (ii) after the Distribution Date in May 2009 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period
do
not exceed 30% of the Original Subordinate Principal Balance, then, the Group
IV
Senior Prepayment Percentage for such Distribution Date will equal the Group
IV
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than
two
times the initial weighted average of the Subordinate Percentages on or prior
to
the Distribution Date occurring in May 2009 and the above delinquency and loss
tests are met, then the Group IV Senior Prepayment Percentage for such
Distribution Date will equal the Group IV Senior Percentage plus 50% of the
Group IV Subordinate Percentage.
Notwithstanding
the foregoing, if on any Distribution Date, the percentage, the numerator of
which is the aggregate Current Principal Amount of the Senior Certificates
immediately preceding such Distribution Date, and the denominator of which
is
the Scheduled Principal Balance of the Mortgage Loans as of the beginning of
the
related Due Period, exceeds such percentage as of the Cut-off Date, then the
Group IV Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group IV Senior Certificates are reduced to zero, the Group IV Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group
IV Subordinate Percentage:
On any
Distribution Date, 100% minus the Group IV Senior Percentage.
Group
IV Subordinate Prepayment Percentage:
With
respect to the Group IV Mortgage Loans, on any Distribution Date, 100% minus
the
Group IV Senior Prepayment Percentage, except that on any Distribution Date
after the Current Principal Amounts of the Group IV Senior Certificates have
each been reduced to zero, if (a) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans
with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 100%,
the Group IV Subordinate Prepayment Percentage will equal 100%. If the test
set
forth in the preceding sentence is not satisfied on any Distribution Date after
the Current Principal Amount of the Group IV Senior Certificates has each been
reduced to zero, then the Group IV Subordinate Prepayment Percentage will equal
zero for such Distribution Date.
Holder:
The
Person in whose name a Certificate is registered in the Certificate Register,
except that, subject to Subsections 12.02(b) and 12.05(e), solely for the
purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor, the Master Servicer or the Trustee
or
any Affiliate thereof shall be deemed not to be outstanding and the Fractional
Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Fractional Undivided Interests
necessary to effect any such consent has been obtained.
Indemnified
Persons:
The
Trustee, the Master Servicer, the Custodian and the Securities Administrator
and
their officers, directors, agents and employees and, with respect to the
Trustee, any separate co-trustee and its officers, directors, agents and
employees.
Independent:
When
used with respect to any specified Person, this term means that such Person
(a)
is in fact independent of the Depositor or the Master Servicer and of any
Affiliate of the Depositor or the Master Servicer, (b) does not have any direct
financial interest or any material indirect financial interest in the Depositor
or the Master Servicer or any Affiliate of the Depositor or the Master Servicer
and (c) is not connected with the Depositor or the Master Servicer or any
Affiliate as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Index:
The
index, if any, specified in a Mortgage Note by reference to which the related
Mortgage Interest Rate will be adjusted from time to time.
Individual
Certificate:
Any
Private Certificate registered in the name of the Holder other than the
Depository or its nominee.
Initial
Certification:
The
certification substantially in the form of Exhibit One to the Custodial
Agreement.
Institutional
Accredited Investor:
Any
Person meeting the requirements of Rule 501(a)(l), (2), (3) or (7) of Regulation
D under the Securities Act or any entity all of the equity holders in which
come
within such paragraphs.
Insurance
Policy:
With
respect to any Mortgage Loan, any standard hazard insurance policy, flood
insurance policy or title insurance policy.
Insurance
Proceeds:
Amounts
paid by the insurer under any Insurance Policy covering any Mortgage Loan or
Mortgaged Property other than amounts required to be paid over to the Mortgagor
pursuant to law or the related Mortgage Note or Security Instrument and other
than amounts used to repair or restore the Mortgaged Property or to reimburse
insured expenses.
Interest
Accrual Period:
With
respect to each Distribution Date, for each Class of Certificates, the calendar
month preceding the month in which such Distribution Date occurs.
Interest
Adjustment Date:
With
respect to a Mortgage Loan, the date, if any, specified in the related Mortgage
Note on which the Mortgage Interest Rate is subject to adjustment.
Interest
Only Certificates:
The
Class II-X Certificates and Class III-X Certificates.
Interest
Shortfall:
With
respect to any Distribution Date and each Mortgage Loan that during the related
Prepayment Period was the subject of a Principal Prepayment or constitutes
a
Relief Act Mortgage Loan, an amount determined as follows:
(a) Partial
principal prepayments received during the relevant Prepayment Period: The
difference between (i) one month’s interest at the applicable Net Rate on the
amount of such prepayment and (ii) the amount of interest of such prepayment
(adjusted to the applicable Net Rate) received at the time of such
prepayment;
(b) Principal
prepayments in full received during the relevant Prepayment Period: The
difference between (i) one month’s interest at the applicable Net Rate on the
Scheduled Principal Balance of such Mortgage Loan immediately prior to such
prepayment and (ii) the amount of interest of such prepayment (adjusted to
the
applicable Net Rate) received at the time of such prepayment; and
(c) Relief
Act Mortgage Loans: As to any Relief Act Mortgage Loan, the excess of (i) 30
days’ interest (or, in the case of a principal prepayment in full, interest to
the date of prepayment) on the Scheduled Principal Balance thereof (or, in
the
case of a principal prepayment in part, on the amount so prepaid) at the related
Net Rate over (ii) 30 days’ interest (or, in the case of a principal prepayment
in full, interest to the date of prepayment) on such Scheduled Principal Balance
(or, in the case of a Principal Prepayment in part, on the amount so prepaid)
at
the Net Rate required to be paid by the Mortgagor as limited by application
of
the Relief Act.
Interim
Certification:
The
certification substantially in the form of Exhibit Two to the Custodial
Agreement.
Investment
Letter:
The
letter to be furnished by each Institutional Accredited Investor which purchases
any of the Private Certificates in connection with such purchase, substantially
in the form set forth as Exhibit F-1 hereto.
Issuing
Entity:
Bear
▇▇▇▇▇▇▇ ARM Trust 2006-2.
Lender-Paid
PMI Rate:
With
respect to each Mortgage Loan covered by a lender-paid primary mortgage
insurance policy, the amount payable to the related insurer, as stated in the
Mortgage Loan Schedule.
Liquidated
Mortgage Loan:
Any
defaulted Mortgage Loan as to which the related Servicer or the Master Servicer
has determined that all amounts it expects to recover from or on account of
such
Mortgage Loan have been recovered.
Liquidation
Date:
With
respect to any Liquidated Mortgage Loan, the date on which the Master Servicer
or the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation
Expenses:
With
respect to a Mortgage Loan in liquidation, unreimbursed expenses paid or
incurred by or for the account of the Master Servicer or the related Servicers
in connection with the liquidation of such Mortgage Loan and the related
Mortgage Property, such expenses including (a) property protection expenses,
(b)
property sales expenses, (c) foreclosure and sale costs, including court costs
and reasonable attorneys’ fees, and (d) similar expenses reasonably paid or
incurred in connection with liquidation.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through trustee’s sale, foreclosure sale, Insurance Proceeds,
condemnation proceeds or otherwise and any Subsequent Recoveries.
Loan
Group:
Loan
Group I, Loan Group II, Loan Group III or Loan Group IV, as
applicable.
Loan
Group I:
The
group of Mortgage Loans designated as belonging to Loan Group I on the Mortgage
Loan Schedule.
Loan
Group II:
The
group of Mortgage Loans designated as belonging to Loan Group II on the Mortgage
Loan Schedule.
Loan
Group III:
The
group of Mortgage Loans designated as belonging to Loan Group III on the
Mortgage Loan Schedule.
Loan
Group IV:
The
group of Mortgage Loans designated as belonging to Loan Group IV on the Mortgage
Loan Schedule.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan, the fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
Loss
Allocation Limitation:
The
meaning specified in Section 6.02(c) hereof.
Loss
Severity Percentage:
With
respect to any Distribution Date, the percentage equivalent of a fraction,
the
numerator of which is the amount of Realized Losses incurred on a Mortgage
Loan
and the denominator of which is the Scheduled Principal Balance of such Mortgage
Loan immediately prior to the liquidation of such Mortgage Loan.
Lost
Notes:
The
original Mortgage Notes that have been lost, as indicated on the Mortgage Loan
Schedule.
Master
Servicer:
As of
the Closing Date, ▇▇▇▇▇ Fargo Bank, N.A. and, thereafter, its respective
successors in interest who meet the qualifications of the Servicing Agreements
and this Agreement.
Master
Servicing Compensation:
The
meaning specified in Section 3.14.
Material
Defect:
The
meaning specified in Section 2.02(a).
Maximum
Lifetime Mortgage Rate:
The
maximum level to which a Mortgage Interest Rate can adjust in accordance with
its terms, regardless of changes in the applicable Index.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number for Mortgage Loans registered with MERS on the
MERS® System.
Minimum
Lifetime Mortgage Rate:
The
minimum level to which a Mortgage Interest Rate can adjust in accordance with
its terms, regardless of changes in the applicable Index.
MOM
Loan:
With
respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage
Loan, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns, at the origination thereof, or as nominee for any
subsequent assignee of the originator pursuant to an assignment of mortgage
to
MERS.
Monthly
Advance:
An
advance of principal or interest required to be made by the applicable Servicer
pursuant to the related Servicing Agreement or the Master Servicer pursuant
to
Section 6.05.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. or its successor in interest.
Mortgage
File:
The
mortgage documents listed in Section 2.01(b) pertaining to a particular Mortgage
Loan and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate at which interest accrues from time to time on any Mortgage Loan
pursuant to the related Mortgage Note, which rate is initially equal to the
“Mortgage Interest Rate” set forth with respect thereto on the Mortgage Loan
Schedule.
Mortgage
Loan:
A
mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01
or Section 2.04 and held as a part of the Trust Fund, as identified in the
Mortgage Loan Schedule (which shall include, without limitation, each related
Mortgage Note, Mortgage and Mortgage File and all rights appertaining thereto),
including a mortgage loan the property securing which has become an REO
Property.
Mortgage
Loan Purchase Agreement:
The
Mortgage Loan Purchase Agreement dated as of May 31, 2006, between EMC Mortgage
Corporation, as seller, and Structured Asset Mortgage Investments II Inc.,
as
purchaser, and all amendments thereof and supplements thereto, attached as
Exhibit J.
Mortgage
Loan Schedule:
The
list of Mortgage Loans (as from time to time amended by the Seller to reflect
the repurchase or substitute of Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, the initial Mortgage Loan Schedule
being
attached hereto as Exhibit B setting forth the following information with
respect to each Mortgage Loan:
(a) the
city,
state and zip code of the Mortgaged Property;
(b) the
property type;
(c) the
Mortgage Interest Rate;
(d) the
Servicing Fee Rate;
(e) the
Master Servicing Fee Rate;
(f) the
LPMI
Fee, if applicable;
(g) [reserved];
(h) the
Net
Rate;
(i) the
maturity date;
(j) the
stated original term to maturity;
(k) the
stated remaining term to maturity;
(l) the
original Principal Balance;
(m) the
first
payment date;
(n) the
principal and interest payment in effect as of the Cut-off Date;
(o) the
unpaid Principal Balance as of the Cut-off Date;
(p) the
Loan-to-Value Ratio at origination;
(q) the
insurer of any Primary Mortgage Insurance Policy;
(r) the
MIN
with respect to each MOM Loan;
(s) the
Gross
Margin, if applicable;
(t) the
next
Adjustment Date, if applicable;
(u) the
Maximum Mortgage Rate, if applicable;
(v) the
Minimum Mortgage Rate, if applicable;
(w) the
Periodic Rate Cap, if applicable;
(x) the
Loan
Group, if applicable;
(y) a
code
indicating whether the Mortgage Loan is negatively amortizing;
(z) which
Mortgage Loans adjust after an initial fixed-rate period of one, two, three,
five, seven or ten years or any other period;
(aa) the
Prepayment Charge, if any;
(bb) lien
position (e.g., first lien or second lien);
(cc) a
code
indicating whether the Mortgage Loan is has a balloon payment;
(dd) a
code
indicating whether the Mortgage Loan is an interest-only loan;
(ee) the
interest-only term, if applicable;
(ff) the
Mortgage Loan Seller; and
(gg) the
original amortization term.
Such
schedule also shall set forth for all of the Mortgage Loans, the total number
of
Mortgage Loans, the total of each of the amounts described under (n) and (j)
above, the weighted average by principal balance as of the Cut-off Date of
each
of the rates described under (c) through (h) above, and the weighted average
remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
Mortgage
Note:
The
originally executed note or other evidence of the indebtedness of a Mortgagor
under the related Mortgage Loan.
Mortgaged
Property:
Land
and improvements securing the indebtedness of a Mortgagor under the related
Mortgage Loan or, in the case of REO Property, such REO Property.
Mortgagor:
The
obligor on a Mortgage Note.
Net
Interest Shortfall:
With
respect to any Distribution Date, the Interest Shortfall, if any, for such
Distribution Date net of Compensating Interest Payments made with respect to
such Distribution Date.
Net
Liquidation Proceeds:
As to
any Liquidated Mortgage Loan, Liquidation Proceeds net of (i) Liquidation
Expenses which are payable therefrom to the related Servicer or the Master
Servicer in accordance with the related Servicing Agreement or this Agreement
and (ii) unreimbursed advances by the related Servicer or the Master Servicer
and Monthly Advances.
Net
Rate:
With
respect to each Mortgage Loan, the Mortgage Interest Rate in effect from time
to
time less the Aggregate Expense Rate (expressed as a per annum
rate).
Non-Offered
Subordinate Certificates:
The
Class B-4, Class B-5 and Class B-6 Certificates.
Nonrecoverable
Advance:
Any
advance or Monthly Advance (i) which was previously made or is proposed to
be
made by the Master Servicer, the Trustee (as successor Master Servicer) or
the
applicable Servicer and (ii) which, in the good faith judgment of the Master
Servicer, the Trustee or the applicable Servicer, will not or, in the case
of a
proposed advance or Monthly Advance, would not, be ultimately recoverable by
the
Master Servicer, the Trustee (as successor Master Servicer) or the applicable
Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on
the
Mortgage Loan for which such advance or Monthly Advance was made or is proposed
to be made.
Notional
Amount:
With
respect to the Class II-X Certificates, the Notional Amount of the Class II-X
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class II-A-1 Certificates. With respect to the Class III-X
Certificates, the Notional Amount of the Class III-X Certificates, as of any
date of determination, is equal to the Current Principal Amount of the Class
III-A-2 Certificates. Reference to the Notional Amount of the Class II-X
Certificates and Class III-X Certificates is solely for convenience in
calculation and does not represent the right to receive any distributions
allocable to principal. For federal income tax purposes, however, the Notional
Amounts of the Class II-X Certificates and Class III-X Certificates are equal
to
the Uncertificated Principal Balances of REMIC II Regular Interest II-A-1 and
REMIC II Regular Interest III-A-2, respectively.
Offered
Certificates:
The
Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2, Class II-X, Class III-A-1,
Class III-A-2, Class III-A-3, Class III-X, Class IV-A-1, Class IV-A-2, Class
R-I, Class R-II, Class R-III, Class ▇-▇, Class B-2 and Class B-3
Certificates.
Offered
Subordinate Certificates:
The
Class ▇-▇, Class B-2 and Class B-3 Certificates.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a Vice President or Assistant Vice President or other
authorized officer of the Master Servicer, any Servicer, the Depositor or the
Seller, as applicable, and delivered to the Trustee, as required by this
Agreement.
Opinion
of Counsel:
A
written opinion of counsel who is or are acceptable to the Trustee and who,
unless required to be Independent (an “Opinion of Independent Counsel”), may be
internal counsel for the Master Servicer or the Depositor.
Original
Subordinate Principal Balance:
The sum
of the aggregate Current Principal Amounts of each Class of Subordinate
Certificates as of the Closing Date.
Original
Value:
The
lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged
Property at the time of origination of a Mortgage Loan, except in instances
where either clauses (i) or (ii) is unavailable, the other may be used to
determine the Original Value, or if both clauses (i) and (ii) are unavailable,
Original Value may be determined from other sources reasonably acceptable to
the
Depositor.
Outstanding
Mortgage Loan:
With
respect to any Due Date, a Mortgage Loan which, prior to such Due Date, was
not
the subject of a Principal Prepayment in full, did not become a Liquidated
Mortgage Loan and was not purchased or replaced.
Outstanding
Principal Balance:
As of
the time of any determination, the principal balance of a Mortgage Loan
remaining to be paid by the Mortgagor, or, in the case of an REO Property,
the
principal balance of the related Mortgage Loan remaining to be paid by the
Mortgagor at the time such property was acquired by the Trust Fund less any
Net
Liquidation Proceeds with respect thereto to the extent applied to
principal.
Pass-Through
Rate:
As to
each Class of Certificates (other than the Class R Certificates), the REMIC
I
Regular Interests and the REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto in Section 5.01(c). Any monthly
calculation of interest at a stated rate shall be based upon annual interest
at
such rate divided by twelve.
Paying
Agent:
The
Securities Administrator or any successor paying agent appointed
hereunder.
Periodic
Rate Cap:
With
respect to each Mortgage Loan, the maximum adjustment that can be made to the
Mortgage Interest Rate on each Interest Adjustment Date in accordance with
its
terms, regardless of changes in the applicable Index.
Permitted
Investments:
Any one
or more of the following obligations or securities held in the name of the
Trustee for the benefit of the Certificateholders:
(i) direct
obligations of, and obligations the timely payment of which are fully guaranteed
by the United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (a)
demand or time deposits, federal funds or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (including the Trustee or the
Master Servicer or its Affiliates acting in its commercial banking capacity)
and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term debt
rating and/or the long-term unsecured debt obligations of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment have the Applicable Credit Rating
or
better from each Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase
obligations with respect to (a) any security described in clause (i) above
or
(b) any other security issued or guaranteed by an agency or instrumentality
of
the United States of America, the obligations of which are backed by the full
faith and credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii)(a) above where the Trustee holds the security
therefor;
(iv) securities
bearing interest or sold at a discount issued by any corporation (including
the
Trustee or the Master Servicer or its Affiliates) incorporated under the laws
of
the United States of America or any state thereof that have the Applicable
Credit Rating or better from each Rating Agency at the time of such investment
or contractual commitment providing for such investment; provided, however,
that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the Trust to exceed 10% of the aggregate Outstanding Principal
Balances of all the Mortgage Loans and Permitted Investments held as part of
the
Trust;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) having the Applicable Credit
Rating or better from each Rating Agency at the time of such
investment;
(vi) a
Reinvestment Agreement issued by any bank, insurance company or other
corporation or entity;
(vii) any
other
demand, money market or time deposit, obligation, security or investment as
may
be acceptable to each Rating Agency as evidenced in writing by each Rating
Agency to the Trustee, the Master Servicer or its affiliates; and
(viii) interests
in any money market fund (including any such fund managed or advised by the
Trustee or Master Servicer or any affiliate thereof) 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 long term rating by each Rating
Agency rating such fund, if so rated, or such lower rating as will not result
in
the downgrading or withdrawal of the ratings then assigned to the Certificates
by each Rating Agency rating such fund; provided, however, that no instrument
or
security shall be a Permitted Investment if such instrument or security
evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of
the
yield to maturity at par or if such instrument or security is purchased at
a
price greater than par.
Permitted
Transferee:
Any
Person other than a Disqualified Organization or an “electing large partnership”
(as defined by Section 775 of the Code).
Person:
Any
individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof.
Physical
Certificates:
The
Residual Certificates and the Private Certificates.
Prepayment
Charge:
With
respect to any Mortgage Loan, the charges or premiums, if any, due in connection
with a full or partial prepayment of such Mortgage Loan in accordance with
the
terms thereof.
Prepayment
Period:
As to
any Distribution Date, the period set forth in the related Servicing
Agreement.
Primary
Mortgage Insurance Policy:
Any
primary mortgage guaranty insurance policy issued in connection with a Mortgage
Loan which provides compensation to a Mortgage Note holder in the event of
default by the obligor under such Mortgage Note or the related Security
Instrument, if any or any replacement policy therefor through the related
Interest Accrual Period for such Class relating to a Distribution
Date.
Principal
Prepayment:
Any
payment (whether partial or full) or other recovery of principal on a Mortgage
Loan which is received in advance of its scheduled Due Date to the extent that
it is not accompanied by an amount as to interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month
of prepayment, including Insurance Proceeds and Repurchase Proceeds, but
excluding the principal portion of Net Liquidation Proceeds.
Private
Certificates:
The
Class B-4, Class B-5 and Class B-6 Certificates.
Protected
Account:
An
account established and maintained for the benefit of Certificateholders by
each
Servicer with respect to the related Mortgage Loans and with respect to REO
Property pursuant to the respective Servicing Agreements.
Purchase
Price:
With
respect to any Mortgage Loan required to be repurchased by the Seller pursuant
to Section 2.02 or 2.03 hereof, an amount equal to the sum of (i) 100% of the
outstanding principal balance of the Mortgage Loan as of the date of such
purchase plus (ii) accrued interest thereon at the applicable Mortgage Rate
through the first day of the month in which the Purchase Price is to be
distributed to Certificateholders, reduced by any portion of the Servicing
Fee,
Servicing Advances and Advances payable to the purchaser of the Mortgage Loan
plus and (iii) any costs and damages (if any) incurred by the Trust in
connection with any violation of such Mortgage Loan of any predatory lending
laws.
QIB:
A
Qualified Institutional Buyer as defined in Rule 144A promulgated under the
Securities Act.
Qualified
Insurer:
Any
insurance company duly qualified as such under the laws of the state or states
in which the related Mortgaged Property or Mortgaged Properties is or are
located, duly authorized and licensed in such state or states to transact the
type of insurance business in which it is engaged and approved as an insurer
by
the Master Servicer, so long as the claims paying ability of which is acceptable
to the Rating Agencies for pass-through certificates having the same rating
as
the Certificates rated by the Rating Agencies as of the Closing
Date.
Rating
Agencies:
Fitch
and S&P.
Realized
Loss:
Any (i)
Bankruptcy Loss or (ii) as to any Liquidated Mortgage Loan, (x) the Outstanding
Principal Balance of such Liquidated Mortgage Loan plus accrued and unpaid
interest thereon at the Mortgage Interest Rate through the last day of the
month
of such liquidation, less (y) the related Net Liquidation Proceeds with respect
to such Mortgage Loan and the related Mortgaged Property. In addition, to the
extent the Paying Agent receives Subsequent Recoveries with respect to any
Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent such recoveries are applied to reduce the
Current Principal Amount of any Class of Certificates on any Distribution
Date.
Record
Date:
With
respect to any Distribution Date, the close of business on the last Business
Day
of the month immediately preceding the month of such Distribution
Date.
Regular
Certificates:
Any of
the Certificates other than the Residual Certificates.
Reinvestment
Agreements:
One or
more reinvestment agreements, acceptable to the Rating Agencies, from a bank,
insurance company or other corporation or entity (including the
Trustee).
Relief
Act:
The
Servicemembers Civil Relief Act, or similar state or local law.
Relief
Act Mortgage Loan:
Any
Mortgage Loan as to which the Scheduled Payment thereof has been reduced due
to
the application of the Relief Act.
REMIC:
A real
estate mortgage investment conduit, as defined in the Code.
REMIC
I:
That
group of assets contained in the Trust Fund designated as a REMIC consisting
of
(i) the Mortgage Loans, (ii) the Distribution Account, (iii) any REO Property
relating to the Mortgage Loans, (iv) the rights with respect to any related
Servicing Agreement, (v) the rights with respect to any related Assignment
Agreement and (vii) any proceeds of the foregoing.
REMIC
I Interests:
The
REMIC I Regular Interests and the Class R-I Certificates.
REMIC
I Regular Interests:
REMIC I
Regular Interests I-Sub, I-Grp, II-Sub, II-Grp, III-Sub, III-Grp, IV-Sub,
IV-Grp, R-II/R-III and ZZZ.
REMIC
I Subordinated Balance Ratio:
The
ratio among the Uncertificated Principal Balances of each of the REMIC I Regular
Interests ending with the designation “Sub,” equal to the ratio among, with
respect to each such REMIC I Regular Interest, the excess of (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Loan Group
over
(y) the aggregate Current Principal Amount of the Senior Certificates in the
related Certificate Group.
REMIC
II:
That
group of assets contained in the Trust Fund designated as a REMIC consisting
of
the REMIC I Regular Interests.
REMIC
II Interests:
The
REMIC II Regular Interests and the Class R-II Certificates.
REMIC
II Regular Interests:
REMIC
II Regular Interests ▇-▇-▇, ▇-▇-▇, ▇▇-▇-▇, ▇▇-▇-▇, Class III-A-1, Class III-A-2,
Class III-A-3, Class IV-A-1, Class IV-A-2, R-III, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and
B-6.
REMIC
III:
That
group of assets contained in the Trust Fund designated as a REMIC consisting
of
the REMIC II Regular Interests.
REMIC
Opinion:
An
Opinion of Independent Counsel, to the effect that the proposed action described
therein would not, under the REMIC Provisions, (i) cause any REMIC to fail
to
qualify as a REMIC while any regular interest in such REMIC is outstanding,
(ii)
result in a tax on prohibited transactions with respect to any REMIC or (iii)
constitute a taxable contribution to any REMIC after the Startup
Day.
REMIC
Provisions:
The
provisions of the federal income tax law relating to the REMIC, which appear
at
Sections 860A through 860G of the Code, and related provisions and regulations
promulgated thereunder, as the foregoing may be in effect from time to
time.
REO
Property:
A
Mortgaged Property acquired in the name of the Trustee, for the benefit of
Certificateholders, by foreclosure or deed-in-lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Reportable
Event:
As
defined in Section 3.18.
Repurchase
Price:
With
respect to any Mortgage Loan (or any property acquired with respect thereto)
required to be repurchased by the Seller pursuant to the Mortgage Loan Purchase
Agreement or Article II of this Agreement, an amount equal to the sum of (i)(a)
100% of the Outstanding Principal Balance of such Mortgage Loan as of the date
of repurchase (or if the related Mortgaged Property was acquired with respect
thereto, 100% of the Outstanding Principal Balance at the date of the
acquisition), plus (b) accrued but unpaid interest on the Outstanding Principal
Balance at the related Mortgage Interest Rate, through and including the last
day of the month of repurchase, plus (c) any unreimbursed Monthly Advances
and
servicing advances payable to the Servicer of the Mortgage Loan or to the Master
Servicer and (ii) any costs and damages (if any) incurred by the Trust in
connection with any violation of such Mortgage Loan of any anti-predatory
lending laws.
Repurchase
Proceeds:
the
Repurchase Price in connection with any repurchase of a Mortgage Loan by the
Seller and any cash deposit in connection with the substitution of a Mortgage
Loan.
Request
for Release:
A
request for release in the form attached hereto as Exhibit D.
Required
Insurance Policy:
With
respect to any Mortgage Loan, any insurance policy which is required to be
maintained from time to time under this Agreement with respect to such Mortgage
Loan.
Residual
Certificates:
Any of
the Class R Certificates.
Responsible
Officer:
Any
officer assigned to the Corporate Trust Office (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration
of
this Agreement, and any other officer of the Trustee to whom a matter arising
hereunder may be referred.
Rule
144A Certificate:
The
certificate to be furnished by each purchaser of a Private Certificate (which
is
also a Physical Certificate) which is a Qualified Institutional Buyer as defined
under Rule 144A promulgated under the Securities Act, substantially in the
form
set forth as Exhibit F-2 hereto.
S&P:
Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its
successors in interest.
Scheduled
Payment:
With
respect to any Mortgage Loan and any month, the scheduled payment or payments
of
principal and interest due during such month on such Mortgage Loan which either
is payable by a Mortgagor in such month under the related Mortgage Note or,
in
the case of REO Property, would otherwise have been payable under the related
Mortgage Note.
Scheduled
Principal:
The
principal portion of any Scheduled Payment.
Scheduled
Principal Balance:
With
respect to any Mortgage Loan on any Distribution Date, (i) the unpaid principal
balance of such Mortgage Loan as of the close of business on the related Due
Date (i.e., taking account of the principal payment to be made on such Due
Date
and irrespective of any delinquency in its payment), as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any bankruptcy or similar proceeding
occurring after the Cut-off Date (other than a Deficient Valuation) or any
moratorium or similar waiver or grace period) and less (ii) any Principal
Prepayments (including the principal portion of Net Liquidation Proceeds)
received during or prior to the related Prepayment Period; provided that the
Scheduled Principal Balance of a Liquidated Mortgage Loan is zero.
Securities
Act:
The
Securities Act of 1933, as amended.
Securities
Administrator:
▇▇▇▇▇
Fargo Bank, N.A., or its successor in interest, or any successor securities
administrator appointed as herein provided.
Securities
Administrator Information:
As
defined in Section 3.18(c).
Securities
Legend:
“THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE
144A
UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A
“QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT
TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR”
WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION
D
UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF
A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT
BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE
TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN
OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a Residual
Certificate:] UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN
OPINION OF COUNSEL ADDRESSED TO THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO
THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE
UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE
PART
OF THE DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE [in the case of the Class B-4, Class B-5 and Class B-6 Certificates:],
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH
IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION (“PTE”) 84-14,
▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO
ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE TRUSTEE, WHICH WILL
BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS AN OPINION OF COUNSEL SPECIFIED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED.”
Security
Agreement:
With
respect to a Cooperative Loan, the agreement creating a security interest in
favor of the originator in the related Cooperative Stock.
Security
Instrument:
A
written instrument creating a valid first lien on a Mortgaged Property securing
a Mortgage Note, which may be any applicable form of mortgage, deed of trust,
deed to secure debt or security deed, including any riders or addenda
thereto.
Seller:
EMC in
its capacity as seller of the Mortgage Loan to the Depositor.
Senior
Certificates:
The
Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2, Class II-X, Class III-A-1,
Class III-A-2, Class III-A-3, Class III-X, Class IV-A-1 and Class IV-A-2
Certificates.
Senior
Optimal Principal Amount:
The
Group I Senior Optimal Principal Amount, Group II Senior Optimal Principal
Amount, Group III Senior Optimal Principal Amount or Class IV Senior Optimal
Principal Amount, as applicable.
Senior
Percentage:
The
Group I Senior Percentage, Group II Senior Percentage, Group III Senior
Percentage or Group IV Senior Percentage, as applicable.
Senior
Prepayment Percentage:
The
Group I Senior Prepayment Percentage, Group II Senior Prepayment Percentage,
Group III Senior Prepayment Percentage or Group IV Senior Prepayment Percentage,
as applicable.
Servicer:
With
respect to each Mortgage Loan, Countrywide, Bank of America, GMAC Mortgage
and
▇▇▇▇▇ Fargo and their successors and assigns.
Servicer
Remittance Date:
With
respect to each Mortgage Loan, the date set forth in the related Servicing
Agreement.
Servicing
Agreements:
The
Countrywide Servicing Agreement, Bank of America Servicing Agreement, the GMAC
Mortgage Servicing Agreement and the ▇▇▇▇▇ Fargo Servicing
Agreement.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time, or those Servicing Criteria otherwise mutually agreed
to by EMC, the Master Servicer, the Trustee and the applicable Servicer in
response to evolving interpretations of Regulation AB and incorporated into
a
revised Exhibit M.
Servicing
Fee:
As to
any Mortgage Loan and Distribution Date, an amount equal to the product of
(i)
the Scheduled Principal Balance of such Mortgage Loan as of the Due Date in
the
preceding calendar month and (ii) the applicable Servicing Fee
Rate.
Servicing
Fee Rate:
As to
any Mortgage Loan, a per annum rate as set forth in the Mortgage Loan
Schedule.
Servicing
Officer:
Any
officer of the related Servicer or Master Servicer involved in or responsible
for the administration and servicing or master servicing, as applicable, of
the
Mortgage Loans as to which officer evidence, reasonably acceptable to the
Trustee, of due authorization of such officer by such Servicer or Master
Servicer, has been furnished from time to time to the Trustee.
Sponsor:
EMC
Mortgage Corporation, in its capacity as sponsor hereunder.
Startup
Day:
May 31,
2006.
Subordinate
Certificates:
The
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
Subordinate
Certificate Writedown Amount:
As to
any Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Certificates (after giving effect to the distribution of
principal and the allocation of applicable Realized Losses in reduction of
the
Current Principal Amounts of the Certificates on such Distribution Date) exceeds
(b) the aggregate Scheduled Principal Balances of the Mortgage Loans on the
Due
Date related to such Distribution Date.
Subordinate
Optimal Principal Amount:
As to
any Distribution Date, an amount equal to the sum, without duplication, of
the
following for the Group I, Group II, Group III and Group IV Mortgage Loans
(but
in no event greater than the aggregate Current Principal Amount of the
Subordinate Certificates immediately prior to such Distribution
Date):
(i) the
applicable Subordinate Percentage of the principal portion of all Scheduled
Payments due on each Outstanding Mortgage Loan in the related Loan Group on
the
related Due Date as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the
applicable Subordinate Prepayment Percentage of the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group that was the subject of a
Principal Prepayment in full received by the Servicers during the related
Prepayment Period;
(iii) the
applicable Subordinate Prepayment Percentage of each Principal Prepayment in
part received during the related Prepayment Period with respect to each Mortgage
Loan in the related Loan Group;
(iv) the
excess, if any, of (a) all Net Liquidation Proceeds allocable to principal
received during the related Prepayment Period in respect of each Liquidated
Mortgage Loan in the related Loan Group and all Subsequent Recoveries received
in respect of each Liquidated Mortgage Loan in the related Loan Group during
the
related Due Period over (b) the sum of the amounts distributable to the related
Senior Certificateholders pursuant to clause (iv) of the related definition
of
Senior Optimal Principal Amount on such Distribution Date;
(v) the
applicable Subordinate Prepayment Percentage of the sum of (a) the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group which was
purchased with respect to such Distribution Date and (b) the difference, if
any,
between the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group that has been replaced by the Seller with a Substitute Mortgage
Loan
pursuant to the Mortgage Loan Purchase Agreement in connection with such
Distribution Date over the Scheduled Principal Balance of each such Substitute
Mortgage Loan; and
(vi) on
the
Distribution Date on which the Current Principal Amounts of the Group I Senior
Certificates, Group II Senior Certificates, Group III Senior Certificates or
Group IV Senior Certificates have all been reduced to zero, 100% of the related
Senior Optimal Principal Amount. After the aggregate Current Principal Amount
of
the Subordinate Certificates has been reduced to zero, the Subordinate Optimal
Principal Amount shall be zero.
Subordinate
Percentage:
The
Group I Subordinate Percentage, Group II Subordinate Percentage, Group III
Subordinate Percentage or Group IV Subordinate Percentage with respect to the
Group I Mortgage Loans, Group II Mortgage Loans, Group III Mortgage Loans and
Group IV Mortgage Loans, respectively.
Subordinate
Prepayment Percentage:
The
Group I Subordinate Prepayment Percentage, Group II Subordinate Prepayment
Percentage, Group III Subordinate Prepayment Percentage or Group IV Subordinate
Prepayment Percentage with respect to the Group I Mortgage Loans, Group II
Mortgage Loans, Group III Mortgage Loans and Group IV Mortgage Loans,
respectively.
Subsequent
Recoveries:
As of
any Distribution Date, amounts received by the Master Servicer during the
related Due Period or surplus amounts held by the Master Servicer to cover
estimated expenses (including, but not limited to, recoveries in respect of
the
representations and warranties made by the Seller pursuant to the Mortgage
Loan
Purchase Agreement) specifically related to a Liquidated Mortgage Loan or
disposition of an REO Property prior to the related Prepayment Period that
resulted in a Realized Loss, after the liquidation or disposition of such
Mortgage Loan.
Substitute
Mortgage Loan:
A
mortgage loan tendered to the Trustee pursuant to the related Servicing
Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in each case, (i) which has an Outstanding Principal
Balance not greater nor materially less than the Mortgage Loan for which it
is
to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not
less
than, and not materially greater than, such Mortgage Loan; (iii) which has
a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of
the
same property type and occupancy type as such Mortgage Loan; (v) which has
a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the
date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan,
and
a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage
Loan.
Tax
Administration and Tax Matters Person:
The
Securities Administrator or any successor thereto or assignee thereof shall
serve as tax administrator hereunder and as agent for the Tax Matters Person.
The Holder of each Class of Residual Certificates shall be the Tax Matters
Person for the related REMIC, as more particularly set forth in Section 9.12
hereof.
Trust
Fund or Trust:
The
corpus of the trust created by this Agreement, consisting of the Mortgage Loans
and the other assets described in Section 2.01(a).
Trustee:
U.S.
Bank National Association, or its successor in interest, or any successor
trustee appointed as herein provided.
Uncertificated
Principal Balance:
With
respect to any REMIC I Regular Interest or REMIC II Regular Interest as of
any
Distribution Date, the initial principal amount of such regular interest as
set
forth in Sections 5.01(c)(i) and (c)(ii), reduced by (i) all amounts distributed
on previous Distribution Dates on such regular interest with respect to
principal, and (ii) the principal portion of all Realized Losses allocated
prior
to such Distribution Date to such regular interest, taking account of the Loss
Allocation Limitation.
Underlying
Seller:
With
respect to each Mortgage Loan, Countrywide and Bank of America, as indicated
on
the Mortgage Loan Schedule.
Uninsured
Cause:
Any
cause of damage to a Mortgaged Property or related REO Property such that the
complete restoration of such Mortgaged Property or related REO Property is
not
fully reimbursable by the hazard insurance policies required to be maintained
pursuant the related Servicing Agreement, without regard to whether or not
such
policy is maintained.
United
States Person:
A
citizen
or resident of the United States, a corporation or partnership (including an
entity treated as a corporation or partnership for federal income tax purposes)
created or organized in, or under the laws of, the United States or any state
thereof or the District of Columbia (except, in the case of a partnership,
to
the extent provided in regulations), provided that, for purposes solely of
the
Class R Certificates, no partnership or other entity treated as a partnership
for United States federal income tax purposes shall be treated as a United
States Person unless all persons that own an interest in such partnership either
directly or through any entity that is not a corporation for United States
federal income tax purposes are United States Persons, or an estate whose income
is subject to United States federal income tax regardless of its source, or
a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such United
States Persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of
part
I of subchapter J of chapter 1 of the Code), and which was treated as a United
States Person on August 20, 1996, may elect to continue to be treated as a
United States Person notwithstanding the previous sentence.
▇▇▇▇▇
Fargo:
▇▇▇▇▇
Fargo Bank, National Association.
▇▇▇▇▇
Fargo Servicing Agreement:
Amended
and Restated Master Mortgage Loan Purchase Agreement, dated as of November
1,
2005, by and between EMC Mortgage Corporation and ▇▇▇▇▇ Fargo.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section
2.01 Conveyance
of Mortgage Loans to Trustee.
(a) The
Depositor concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Trust without recourse all its right, title and
interest in and to (i) the Mortgage Loans identified in their respective
Mortgage Loan Schedules, including all interest and principal due with respect
to the Mortgage Loans after the Cut-off Date but excluding any payments of
principal and interest due on or prior to the Cut-off Date; (ii) such assets
as
shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Distribution Account, (iii) such assets relating
to the Mortgage Loans as from time to time may be held by the Servicers in
Protected Accounts and the Paying Agent in the Distribution Account, (iv) any
REO Property, (v) the Required Insurance Policies and any amounts paid or
payable by the insurer under any Insurance Policy (to the extent the mortgagee
has a claim thereto), (vi) the Mortgage Loan Purchase Agreement to the extent
provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreements as assigned to the Trustee on behalf of the Certificateholders by
the
Assignment Agreements, (viii) such assets as shall from time to time be credited
or are required by the terms of this Agreement to be credited to the
Distribution Account and (ix) any proceeds of the foregoing. Although it is
the
intent of the parties to this Agreement that the conveyance of the Depositor’s
right, title and interest in and to the Mortgage Loans and other assets in
the
Trust Fund pursuant to this Agreement shall constitute a purchase and sale
and
not a loan, in the event that such conveyance is deemed to be a loan, it is
the
intent of the parties to this Agreement that the Depositor shall be deemed
to
have granted to the Trustee a first priority perfected security interest in
all
of the Depositor’s right, title and interest in, to and under the Mortgage Loans
and other assets in the Trust Fund, and that this Agreement shall constitute
a
security agreement under applicable law.
(b) In
connection with the above transfer and assignment, the Depositor hereby delivers
to the Custodian, as agent for the Trustee, with respect to each Mortgage
Loan:
(i) the
original Mortgage Note, endorsed without recourse (A) to the order of the
Trustee or in blank, or (B) in the case of a loan registered on the MERS system,
in blank, and in each case showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit together with a copy of the related Mortgage Note;
(ii) the
original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the
presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or if the original is not available,
a
copy), with evidence of such recording indicated thereon (or if clause (w)
in
the proviso below applies, shall be in recordable form);
(iii) unless
the Mortgage Loan is a MOM Loan, a certified copy of the assignment (which
may
be in the form of a blanket assignment if permitted in the jurisdiction in
which
the Mortgaged Property is located) to “U.S. Bank National Association, as
Trustee”, with evidence of recording with respect to each Mortgage Loan in the
name of the Trustee thereon (or if clause (w) in the proviso below applies
or
for Mortgage Loans with respect to which the related Mortgaged Property is
located in a state other than Maryland or an Opinion of Counsel has been
provided as set forth in this Section 2.01(b), shall be in recordable
form);
(iv) all
intervening assignments of the Security Instrument, if applicable and only
to
the extent available to the Depositor with evidence of recording
thereon;
(v) the
original or a copy of the policy or certificate of primary mortgage guaranty
insurance, to the extent available, if any;
(vi) the
original policy of title insurance or mortgagee’s certificate of title insurance
or commitment or binder for title insurance; and
(vii) originals
of all modification agreements, if applicable and available;
provided,
however,
that in
lieu of the foregoing, the Depositor may deliver to the Custodian, as agent
of
the Trustee, the following documents, under the circumstances set forth below:
(w) in lieu of the original Security Instrument, assignments to the Trustee
or
intervening assignments thereof which have been delivered, are being delivered
or will, upon receipt of recording information relating to the Security
Instrument required to be included thereon, be delivered to recording offices
for recording and have not been returned to the Depositor in time to permit
their delivery as specified above, the Depositor may deliver a true copy thereof
with a certification by the Depositor, on the face of such copy, substantially
as follows: “Certified to be a true and correct copy of the original, which has
been transmitted for recording”; (x) in lieu of the Security Instrument,
assignment to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Depositor to such effect) the Depositor may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; (y) in lieu of the Mortgage Notes relating to the
Mortgage Loans identified on Exhibit 5 to the Mortgage Loan Purchase Agreement,
the Depositor may deliver lost note affidavits from the Seller; and (z) the
Depositor shall not be required to deliver intervening assignments or Mortgage
Note endorsements between the related Underlying Seller and the Seller, between
the Seller and the Depositor, and between the Depositor and the Trustee; and
provided, further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Depositor, in lieu of delivering the above documents, may deliver to the Trustee
or the Custodian, as its agent, a certification to such effect and shall deposit
all amounts paid in respect of such Mortgage Loans in the Distribution Account
on the Closing Date. The Depositor shall deliver such original documents
(including any original documents as to which certified copies had previously
been delivered) to the Trustee or the Custodian, as its agent, promptly after
they are received. The Depositor shall cause the Seller, at its expense, to
cause each assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date, unless (a) such recordation
is
not required by the Rating Agencies or an Opinion of Counsel addressed to the
Trustee has been provided to the Trustee (with a copy to the Custodian) which
states that recordation of such Security Instrument is not required to protect
the interests of the Certificateholders in the related Mortgage Loans or (b)
MERS is identified on the Mortgage or on a properly recorded assignment of
the
Mortgage as the mortgagee of record solely as nominee for the Seller and its
successor and assigns; provided, however, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee or the Custodian,
as
its agent, upon the earliest to occur of: (i) reasonable direction by the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust, (ii) the occurrence of an Event of Default,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to
the
Seller and (iv) the occurrence of a servicing transfer as described in Section
8.02 hereof. Notwithstanding the foregoing, if the Seller fails to pay the
cost
of recording the assignments, such expense will be paid by the Trustee and
the
Trustee shall be reimbursed for such expenses by the Trust in accordance with
Section 9.05.
Section
2.02 Acceptance
of Mortgage Loans by Trustee.
(a) The
Trustee acknowledges the sale, transfer and assignment of the Trust Fund to
it
by the Depositor and receipt of, subject to further review and the exceptions
which may be noted pursuant to the procedures described below, and declares
that
it holds, the documents (or certified copies thereof) delivered to the
Custodian, as its agent, pursuant to Section 2.01, and declares that it will
continue to hold those documents and any amendments, replacements or supplements
thereto and all other assets of the Trust Fund delivered to it as Trustee in
trust for the use and benefit of all present and future Holders of the
Certificates. On the Closing Date, with respect to the Mortgage Loans, the
Custodian shall acknowledge with respect to each Mortgage Loan by delivery
to
the Depositor and the Trustee of an Initial Certification receipt of the
Mortgage File, but without review of such Mortgage File, except to the extent
necessary to confirm that such Mortgage File contains the related Mortgage
Note
or lost note affidavit. No later than 90 days after the Closing Date (or with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and the Trustee an Interim Certification. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the related
Mortgage Loan Schedule, whether those documents relate, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans it has received, as identified in the related Mortgage Loan
Schedule. In performing any such review, the Trustee or the Custodian, as its
agent, may conclusively rely on the purported due execution and genuineness
of
any such document and on the purported genuineness of any signature thereon.
If
the Trustee or the Custodian, as its agent, finds any document constituting
part
of the Mortgage File has not been executed or received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B, or to appear
defective on its face (a “Material Defect”), the Trustee or the Custodian, as
its agent, shall promptly notify the Seller. In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such defect within
ninety (90) days from the date of notice from the Trustee or the Custodian,
as
its agent, of the defect and if the Seller fails to correct or cure the defect
within such period, and such defect materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the Trustee
shall enforce the Seller’s obligation under the Mortgage Loan Purchase
Agreement, within 90 days from the Trustee’s or the Custodian’s notification,
provide a Substitute Mortgage Loan (if within two years of the Closing Date)
or
purchase such Mortgage Loan at the Repurchase Price; provided that, if such
defect would cause the Mortgage Loan to be other than a “qualified mortgage” as
defined in Section 860G(a)(3) of the Code, any such cure or repurchase must
occur within 90 days from the date such breach was discovered; provided,
however, that if such defect relates solely to the inability of the Seller
to
deliver the original Security Instrument or intervening assignments thereof,
or
a certified copy because the originals of such documents, or a certified copy
have not been returned by the applicable jurisdiction, the Seller shall not
be
required to purchase such Mortgage Loan if the Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall
not
apply in the event that the Seller cannot deliver such original or copy of
any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Seller shall instead deliver a recording receipt
of
such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery
to
the Trustee or the Custodian, as its agent, shall be effected by the Seller
within thirty days of its receipt of the original recorded
document.
(b) No
later
than 180 days after the Closing Date (or with respect to any Substitute Mortgage
Loan, within five Business Days after the receipt by the Trustee or the
Custodian thereof), the Trustee or the Custodian, as its agent, will review,
for
the benefit of the Certificateholders, the Mortgage Files delivered to it and
will execute and deliver or cause to be executed and delivered to the Depositor
and the Trustee a Final Certification. In conducting such review, the Trustee
or
the Custodian, as its agent, will ascertain whether an original of each document
required to be recorded has been returned from the recording office with
evidence of recording thereon or a certified copy has been obtained from the
recording office. If the Trustee or the Custodian, as its agent, finds a
Material Defect, the Trustee or the Custodian, as its agent, shall promptly
notify the Seller (provided, however, that with respect to those documents
described in subsections (b)(iv), (v) and (vii) of Section 2.01, the Trustee’s
and Custodian’s obligations shall extend only to the documents actually
delivered to the Custodian pursuant to such subsections). In accordance with
the
Mortgage Loan Purchase Agreement, the Seller shall correct or cure any such
defect within 90 days from the date of notice from the Trustee or the Custodian,
as its agent, of the Material Defect and if the Seller is unable to cure such
defect within such period, and if such defect materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan, the
Trustee shall enforce the Seller’s obligation under the Mortgage Loan Purchase
Agreement, within 90 days from the Trustee’s or Custodian’s notification,
provide a Substitute Mortgage Loan (if within two years of the Closing Date)
or
purchase such Mortgage Loan at the Repurchase Price, provided that, if such
defect would cause the Mortgage Loan to be other than a “qualified mortgage” as
defined in Section 860G(a)(3) of the Code, any such cure, repurchase or
substitution must occur within 90 days from the date such breach was discovered,
provided, however, that if such defect relates solely to the inability of the
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents or a
certified copy, have not been returned by the applicable jurisdiction, the
Seller shall not be required to purchase such Mortgage Loan, if the Seller
delivers such original documents or certified copy promptly upon receipt, but
in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Seller shall instead deliver
a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or the Custodian, as its agent, shall be effected
by
the Seller within thirty days of its receipt of the original recorded
document.
(c) In
the
event that a Mortgage Loan is purchased by the Seller in accordance with
Subsections 2.02(a) or (b) above, the Seller shall remit to the Securities
Administrator the Repurchase Price for deposit in the Distribution Account
and
the Seller shall provide to the Master Servicer, Securities Administrator,
the
Paying Agent and the Trustee written notification detailing the components
of
the Repurchase Price to the Trustee, the Paying Agent and the Master Servicer.
Upon deposit of the Repurchase Price in the Distribution Account, the Depositor
shall notify the Trustee and the Custodian, as agent of the Trustee (upon
receipt of a Request for Release in the form of Exhibit D attached hereto with
respect to such Mortgage Loan), shall release to the Seller the related Mortgage
File and the Trustee shall execute and deliver all instruments of transfer
or
assignment, without recourse, representation or warranty, furnished to it by
the
Seller, as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Paying Agent.
The Seller shall amend the Mortgage Loan Schedule, which was previously
delivered to it by the Depositor in a form agreed to between the Depositor
and
the Trustee, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the Seller
to repurchase or substitute for any Mortgage Loan a Substitute Mortgage Loan
as
to which such a defect in a constituent document exists shall be the sole remedy
respecting such defect available to the Certificateholders or to the Trustee
on
their behalf.
Section
2.03 Assignment
of Interest in the Mortgage Loan Purchase Agreement.
(a) The
Depositor hereby assigns to the Trustee, on behalf of the Certificateholders,
all of its right, title and interest in the Mortgage Loan Purchase Agreement,
including but not limited to the Depositor’s rights and obligations pursuant to
the Servicing Agreements (noting that the Seller has retained the right in
the
event of breach of the representations, warranties and covenants, if any, with
respect to the related Mortgage Loans of the related Servicer under the related
Servicing Agreement to enforce the provisions thereof and to seek all or any
available remedies). The obligations of the Seller to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Trustee’s and the
Certificateholders’ sole remedy for any breach thereof. At the request of the
Trustee, the Depositor shall take such actions as may be necessary to enforce
the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such
enforcement.
(b) If
the
Depositor, the Securities Administrator or the Trustee discovers a breach of
any
of the representations and warranties set forth in the Mortgage Loan Purchase
Agreement, which breach materially and adversely affects the value of the
interests of Certificateholders or the Trustee in the related Mortgage Loan,
the
party discovering the breach shall give prompt written notice of the breach
to
the other parties to this Agreement. The Seller, within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage
Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, shall
purchase the Mortgage Loan or any property acquired with respect thereto from
the Trustee; provided, however, that if there is a breach of any representation
set forth in the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and the Mortgage Loan or the related property acquired
with respect thereto has been sold, then the Seller shall pay, in lieu of the
Repurchase Price, any excess of the Repurchase Price over the Net Liquidation
Proceeds received upon such sale. If the Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid to the Seller to the extent not
required by law to be paid to the borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the
Securities Administrator for deposit in the Distribution Account and written
notification detailing the components of such Repurchase Price to the Trustee,
the Paying Agent and the Master Servicer. The Depositor shall notify the Trustee
and submit to the Custodian, as agent for the Trustee, a Request for Release,
and the Custodian shall release, or the Trustee shall cause the Custodian to
release, to the Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment furnished to it by the
Seller, without recourse, representation or warranty as are necessary to vest
in
the Seller title to and rights under the Mortgage Loan or any property acquired
with respect thereto. Such purchase shall be deemed to have occurred on the
date
on which the Repurchase Price in available funds is received by the Trustee.
The
Seller shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Trustee and the Rating Agencies of such amendment.
Enforcement of the obligation of the Seller to purchase (or substitute a
Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with
respect thereto (or pay the Repurchase Price as set forth in the above proviso)
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Certificateholders or the Trustee
on their behalf.
In
connection with any repurchase of a Mortgage Loan pursuant to this Section
2.03,
the Seller shall, or cause the related Servicer to, furnish to
the
Securities Administrator an Officer’s Certificate,
signed
by a duly authorized officer of the Seller or the related Servicer, as the
case
may be, to the effect that such repurchase has been made in accordance with
the
terms and conditions of this Agreement and that all conditions precedent to
such
repurchase have been satisfied, including the delivery to the Securities
Administrator of the Purchase Price for deposit into the Distribution Account,
together with copies of any Opinion of Counsel required to be delivered pursuant
to this Agreement and the related Request for Release. Solely
for purposes of the Securities Administrator providing an Assessment of
Compliance, upon receipt of such documentation, the Securities Administrator
shall approve such repurchase and which approval shall consist solely of the
Securities Administrator’s receipt of such documentation and deposits. It is
understood and agreed that the obligation under this Agreement of the Seller
to
repurchase any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedies against the Seller respecting such breach
available to Certificateholders, the Depositor or the Trustee.
Section
2.04 Substitution
of Mortgage Loans.
Notwithstanding
anything to the contrary in this Agreement, in lieu of purchasing a Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03
of this Agreement, the Seller may, no later than the date by which such purchase
by the Seller would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Seller that such Substitute Mortgage Loan conforms to the requirements set
forth
in the definition of “Substitute Mortgage Loan” in this Agreement; provided,
however, that substitution pursuant to the Mortgage Loan Purchase Agreement
or
Section 2.04 of this Agreement, as applicable, in lieu of purchase shall not
be
permitted after the termination of the two-year period beginning on the Startup
Day; provided, further, that if the breach would cause the Mortgage Loan to
be
other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the date the breach
was discovered. The Custodian, as agent for the Trustee, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify
the
Seller, in writing, within five Business Days after receipt, whether or not
the
documents relating to the Substitute Mortgage Loan satisfy the requirements
of
the fifth sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Seller shall provide to the Paying Agent for deposit in the
Distribution Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to the Scheduled Principal
due
on such date, exceeds the Outstanding Principal Balance as of such date of
the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on
such
date, which amount shall be treated for the purposes of this Agreement as if
it
were the payment by the Seller of the Repurchase Price for the purchase of
a
Mortgage Loan by the Seller. After such notification to the Seller and, if
any
such excess exists, upon receipt of such deposit, the Trustee shall accept
such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and
any
Principal Prepayments made thereon during such month shall be the property
of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on
a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property
of
the Trust Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery
to
the Custodian of a Request for Release for such Mortgage Loan), the Custodian,
as agent for the Trustee, shall release to the Seller the related Mortgage
File
related to any Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty in form as provided to it as are necessary to vest
in
the Seller title to and rights under any Mortgage Loan released pursuant to
the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver to the Custodian the documents related
to
the Substitute Mortgage Loan in accordance with the provisions of the Mortgage
Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement,
as
applicable, with the date of acceptance of the Substitute Mortgage Loan deemed
to be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Seller with respect
to each Substitute Mortgage Loan as of the date of acceptance of such Mortgage
Loan by the Trustee. The Seller shall amend the Mortgage Loan Schedule to
reflect such substitution and shall provide a copy of such amended Mortgage
Loan
Schedule to the Trustee, the Securities Administrator, the Master Servicer,
the
Custodian and the Rating Agencies.
In
connection with any substitution of a Mortgage Loan pursuant to this Section
2.04, the Seller shall, or cause the related Servicer to, furnish to the
Securities Administrator an Officer’s Certificate, signed by a duly authorized
officer of the Seller or the related Servicer, as the case may be, to the effect
that such substitution has been made in accordance with the terms and conditions
of this Agreement and that all conditions precedent to such substitution have
been satisfied, together with copies of any Opinion of Counsel required to
be
delivered pursuant to this Agreement and the related Request for Release. Solely
for purposes of the Securities Administrator providing an Assessment of
Compliance, upon receipt of such documentation, the Securities Administrator
shall approve such substitution and which approval shall be based solely on
the
Securities Administrator’s receipt of such documentation and deposits. It is
understood and agreed that the obligation under this Agreement of the Seller
to
substitute any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedies against the Seller respecting such breach
available to Certificateholders, the Depositor or the Trustee.
Section
2.05 Issuance
of Certificates.
(a) The
Trustee acknowledges the assignment to it of the Mortgage Loans and the other
assets comprising the Trust Fund and, concurrently therewith, the Securities
Administrator has signed, and countersigned and delivered to the Depositor,
in
exchange therefor, Certificates in such authorized denominations representing
such Fractional Undivided Interests as the Depositor has requested. The Trustee
agrees that it will hold the Mortgage Loans and such other assets as may from
time to time be delivered to it segregated on the books of the Trustee in trust
for the benefit of the Certificateholders.
(b) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the
Mortgage Loans and the other assets of REMIC I for the benefit of the holders
of
the REMIC I Interests. The Trustee acknowledges receipt of such assets and
declares that it holds and will hold the same in trust for the exclusive use
and
benefit of the holders of the REMIC I Interests.
(c) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the REMIC
I Regular Interests and the other assets of REMIC II for the benefit of the
holders of the REMIC II Interests. The Trustee acknowledges receipt of the
REMIC
I Regular Interests (which are uncertificated) and the other assets of REMIC
II
and declares that it holds and will hold the same in trust for the exclusive
use
and benefit of the holders of the REMIC II Interests.
(d) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the REMIC
II Regular Interests and the other assets of REMIC III for the benefit of the
Holders of the Certificates (other than the Class R-I Certificates and the
Class
R-II Certificates). The Trustee acknowledges receipt of the REMIC II Regular
Interests (which are uncertificated) and the other assets of REMIC III and
declares that it holds and will hold the same in trust for the exclusive use
and
benefit of the Holders of the Certificates (other than the Class R-I
Certificates and the Class R-II Certificates).
Section
2.06 Representations
and Warranties Concerning the Depositor.
The
Depositor hereby represents and warrants to the Trustee, the Master Servicer
and
the Securities Administrator as follows:
(i) the
Depositor (a) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and (b) is qualified and in
good standing as a foreign corporation to do business in each jurisdiction
where
such qualification is necessary, except where the failure so to qualify would
not reasonably be expected to have a material adverse effect on the Depositor’s
business as presently conducted or on the Depositor’s ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(ii) the
Depositor has full corporate power to own its property, to carry on its business
as presently conducted and to enter into and perform its obligations under
this
Agreement;
(iii) the
execution and delivery by the Depositor of this Agreement have been duly
authorized by all necessary corporate action on the part of the Depositor;
and
neither the execution and delivery of this Agreement, nor the consummation
of
the transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default under,
any
of the provisions of any law, governmental rule, regulation, judgment, decree
or
order binding on the Depositor or its properties or the articles of
incorporation or by-laws of the Depositor, except those conflicts, breaches
or
defaults which would not reasonably be expected to have a material adverse
effect on the Depositor’s ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(iv) the
execution, delivery and performance by the Depositor of this Agreement and
the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices, registrations
or
other actions as have already been obtained, given or made;
(v) this
Agreement has been duly executed and delivered by the Depositor and, assuming
due authorization, execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Depositor enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there
are
no actions, suits or proceedings pending or, to the knowledge of the Depositor,
threatened against the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter which
in
the judgment of the Depositor will be determined adversely to the Depositor
and
will if determined adversely to the Depositor materially and adversely affect
the Depositor’s ability to enter into this Agreement or perform its obligations
under this Agreement; and the Depositor is not in default with respect to any
order of any court, administrative agency, arbitrator or governmental body
so as
to materially and adversely affect the transactions contemplated by this
Agreement;
(vii) The
Depositor has filed all reports required to be filed by Section 13 or Section
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the Depositor was required to file such reports) and it has been
subject to such filing requirements for the past 90 days; and
(viii) immediately
prior to the transfer and assignment to the Trustee, each Mortgage Note and
each
Mortgage were not subject to an assignment or pledge, and the Depositor had
good
and marketable title to and was the sole owner thereof and had full right to
transfer and sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security
interest.
Section
2.07 Purposes
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. The trust shall
not
engage in any activity other than in connection with the foregoing or other
than
as required or authorized by the terms of this Agreement while any Certificate
is outstanding, and this Section 2.07 may not be amended, without the consent
of
the Certificateholders evidencing 51% or more of the aggregate voting rights
of
the Certificates.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
3.01 Master
Servicer.
The
Master Servicer shall, from and after the Closing Date, supervise, monitor
and
oversee the obligation of the Servicers to service and administer their
respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreements and shall have full power and authority to do any and
all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with
each
Servicer as necessary from time-to-time to carry out the Master Servicer’s
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer
and
shall cause each Servicer to perform and observe the covenants, obligations
and
conditions to be performed or observed by such Servicer under its applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer’s servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers’ and Master Servicer’s records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order
for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage
Loan
monitoring with the actual remittances of the Servicers to the Securities
Administrator pursuant to the applicable Servicing Agreements.
In
addition to the foregoing, in connection with a modification of any Mortgage
Loan by a Servicer, if the Master Servicer is unable to enforce the obligations
of the Servicer with respect to such modification, the Master Servicer shall
notify the Depositor of such Servicer’s failure to comply with the terms of the
Servicing Agreement. If the Servicing Agreement requires the approval of the
Master Servicer for a modification to a Mortgage Loan, the Master Servicer
shall
approve such modification if, based upon its receipt of written notification
from the related Servicer outlining the terms of such modification and
appropriate supporting documentation, the Master Servicer determines that the
modification is permitted under the terms of the Servicing Agreement and that
any conditions to such modification set forth in the Servicing Agreement have
been satisfied. Furthermore, if the Servicing Agreement requires the oversight
and monitoring of loss mitigation measures with respect to the related Mortgage
Loans, the Master Servicer will monitor any loss mitigation procedure or
recovery action related to a defaulted Mortgage Loan (to the extent it receives
notice of such from the related Servicer) and confirm that such loss mitigation
procedure or recovery action is initiated, conducted and concluded in accordance
with any timeframes and any other requirements set forth in the Servicing
Agreement, and the Master Servicer shall notify the Depositor in any case in
which the Master Servicer believes that the related Servicer is not complying
with such timeframes and/or other requirements.
The
Trustee shall furnish the Servicers and the Master Servicer, upon written
request from a servicing officer, with any powers of attorney and other
documents in form as provided to it necessary or appropriate to enable the
Servicers and the Master Servicer to service and administer the related Mortgage
Loans and REO Property.
The
Trustee or the Custodian on its behalf or the related Servicer shall provide
access to the records and documentation in the possession of the Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Certificateholders, the FDIC, and the supervisory agents and examiners
of
the FDIC, such access being afforded only upon reasonable prior written request
and during normal business hours at the office of the Custodian or the related
Servicer; provided, however, that, unless otherwise required by law, the
Trustee, the Custodian, or the related Servicer, shall not be required to
provide access to such records and documentation if the provision thereof would
violate the legal right to privacy of any Mortgagor. The Trustee or the
Custodian, as its agent, or the related Servicer, shall allow representatives
of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee’s,
Custodian’s or the related Servicer’s actual costs.
The
Trustee shall execute upon the related Servicer’s written instruction (which
includes the documents to be signed) and deliver to the related Servicer and
the
Master Servicer, any court pleadings, requests for trustee’s sale or other
appropriate documents necessary or desirable to (i) the foreclosure or trustee’s
sale with respect to a Mortgaged Property; (ii) any legal action brought to
obtain judgment against any Mortgagor on the Mortgage Note or Security
Instrument; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or Security
Instrument or otherwise available at law or equity.
Section
3.02 REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee and the Securities Administrator
shall act in accordance herewith to assure continuing treatment of such REMIC
as
a REMIC, and the Trustee and the Securities Administrator shall comply with
any
directions of the Depositor, the related Servicer or the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a)
sell
or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account (except as otherwise expressly permitted
by
this Agreement) unless such sale is as a result of a repurchase of the Mortgage
Loans pursuant to this Agreement or the Trustee has received a REMIC Opinion
addressed to the Trustee prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion addressed to the Trustee .
Section
3.03 Monitoring
of Servicers.
(a) The
Master Servicer shall be responsible for reporting to the Trustee and the
Depositor the compliance by each Servicer with its duties under the related
Servicing Agreement. In the review of each Servicer’s activities, the Master
Servicer may rely upon an officer’s certificate of the Servicer (or similar
document signed by an officer of the Servicer) with regard to such Servicer’s
compliance with the terms of its Servicing Agreement. In the event that the
Master Servicer, in its judgment, determines that a Servicer (other than ▇▇▇▇▇
Fargo) should be terminated in accordance with its Servicing Agreement, or
that
a notice should be sent pursuant to such Servicing Agreement with respect to
the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer (or the Trustee in the case that ▇▇▇▇▇ Fargo
is
the Servicer to be terminated) shall issue such notice or take such other action
as it deems appropriate. In the event that the Master Servicer, in its judgment,
determines that ▇▇▇▇▇ Fargo should be terminated in accordance with the ▇▇▇▇▇
Fargo Servicing Agreement, or that a notice should be sent pursuant to the
▇▇▇▇▇
Fargo Servicing Agreement with respect to the occurrence of an event that,
unless cured, would constitute grounds for such termination, the Master Servicer
shall notify the Sponsor and the Trustee thereof in writing. Pursuant to its
receipt of such written notification from the Master Servicer, the Trustee
shall
issue such notice of termination to ▇▇▇▇▇ Fargo or take such other action as
it
deems appropriate.
The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of each Servicer under the related Servicing
Agreement, and shall, in the event that the related Servicer (other than ▇▇▇▇▇
Fargo) fails to perform its obligations in accordance with the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Servicer thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter into a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however,
it
is understood and acknowledged by the parties hereto that there shall be a
period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to such successor Servicer. In the event
that
▇▇▇▇▇ Fargo fails to perform its obligations in accordance with the ▇▇▇▇▇ Fargo
Servicing Agreement, subject to the preceding paragraph, the Master Servicer
shall notify the Trustee in writing of such failure. Pursuant to its receipt
of
such notification from the Master Servicer, the Trustee shall terminate the
rights and obligations of ▇▇▇▇▇ Fargo under the ▇▇▇▇▇ Fargo Servicing Agreement
and enter into a new servicing agreement with a successor servicer selected
by
the Trustee or, in the case where it cannot find a successor servicer, it shall
become the successor servicer; provided, however, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor servicer. In either event, such enforcement,
including, without limitation, the legal prosecution of claims, termination
of
the related Servicing Agreement and the pursuit of other appropriate remedies,
shall be in such form and carried out to such an extent and at such time as
the
Master Servicer (or in the case ▇▇▇▇▇ Fargo is terminated as the Servicer,
the
Successor Servicer or the Trustee, as applicable), in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense,
subject to its right of reimbursement pursuant to the provisions of this
Agreement or the related Servicing Agreement, provided that the Master Servicer
shall not be required to prosecute or defend any legal action except to the
extent that the Master Servicer shall have received reasonable indemnity for
its
costs and expenses in pursuing such action. In the event that ▇▇▇▇▇ Fargo is
terminated as the Servicer, the Trustee shall pay the costs of such enforcement
at its own expense, subject to its right to be reimbursed for such costs from
the Distribution Account pursuant to Section 4.03(c); provided that the Trustee
shall not be required to prosecute or defend any legal action except to the
extent that the Trustee shall have received reasonable indemnity for its costs
and expenses in pursuing such action. Nothing herein shall impose any obligation
on the part of the Trustee to assume or succeed to the duties or obligations
of
▇▇▇▇▇ Fargo as Servicer or the Master Servicer unless the Trustee has not been
able to find a successor servicer or a successor master servicer.
(b) To
the
extent that the costs and expenses of the Master Servicer or the Trustee, as
applicable, related to any termination of a Servicer, or the enforcement or
prosecution or related claims, rights or remedies or the appointment of a
successor servicer or the transfer and assumption of servicing by the Master
Servicer or the Trustee, as applicable, with respect to any Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of a Servicer as a result of an event of default by such Servicer
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor servicer to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not
fully
and timely reimbursed by the terminated Servicer, the Master Servicer or the
Trustee, as applicable, shall be entitled to reimbursement of such costs and
expenses from the Distribution Account, pursuant to Section 4.05.
(c) The
Master Servicer shall require each Servicer to comply with the remittance
requirements and other obligations set forth in the related Servicing
Agreements.
(d) If
the
Master Servicer acts as Servicer, it will not assume liability for the
representations and warranties of the Servicer, if any, that it
replaces.
Section
3.04 Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with
respect to all directors, officers, employees and other Persons acting on such
Master Servicer’s behalf, and covering errors and omissions in the performance
of the Master Servicer’s obligations hereunder. The errors and omissions
insurance policy and the fidelity bond shall be in such form and amount
generally acceptable for entities serving as master servicers or
trustees.
Section
3.05 Power
to
Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Article X hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 3.03, shall
not permit any Servicer to) knowingly or intentionally take any action, or
fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, may cause any
REMIC
to fail to qualify as a REMIC or result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transactions
as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer
has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action would not cause any REMIC to fail
to
qualify as a REMIC or result in the imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation,
or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Agreement, and the Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer
or
any Servicer). If the Master Servicer or the Trustee has been advised that
it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the “doing business” or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee
in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action
in
the name of the Trust, be deemed to be the agent of the Trust.
Section
3.06 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent provided in the applicable Servicing Agreement, to the extent Mortgage
Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause
the Servicers to enforce such clauses in accordance with the applicable
Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan
is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
Section
3.07 Release
of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
any Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the
next
Distribution Date, the Servicer will, if required under the applicable Servicing
Agreement (or if the Servicer does not, the Master Servicer may), promptly
furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit D (or as otherwise provided
in the Custodial Agreement) hereto signed by a Servicing Officer or in a
mutually agreeable electronic format which will, in lieu of a signature on
its
face, originate from a Servicing Officer (which certification shall include
a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained
by
the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and
shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon
any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan,
an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument
of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan
and in accordance with the applicable Servicing Agreement, upon written
instruction from such Servicer or the Master Servicer, the Trustee shall execute
such documents as shall be prepared and furnished to the Trustee by a Servicer
or the Master Servicer (in form reasonably acceptable to the Trustee) and as
are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of a Servicer or the Master Servicer,
and delivery to the Custodian, on behalf of the Trustee, of two copies of a
request for release signed by a Servicing Officer substantially in the form
of
Exhibit D (or in a mutually agreeable electronic format which will, in lieu
of a
signature on its face, originate from a Servicing Officer), release the related
Mortgage File held in its possession or control to the Servicer or the Master
Servicer, as applicable. Such trust receipt shall obligate the Servicer or
the
Master Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt
of a certificate of a Servicing Officer similar to that hereinabove specified,
the Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to the Servicer or the Master Servicer.
Section
3.08 Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
(a) The
Master Servicer and each Servicer (to the extent required by the related
Servicing Agreement) shall transmit to the Trustee or Custodian such documents
and instruments coming into the possession of the Master Servicer or such
Servicer from time to time as are required by the terms hereof, or in the case
of the Servicers, the applicable Servicing Agreement, to be delivered to the
Trustee or Custodian. Any funds received by the Master Servicer or by a Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer or by a Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan shall be held for the benefit of the Trustee and
the Certificateholders subject to the Master Servicer’s right to retain or
withdraw from the Distribution Account the Master Servicing Compensation and
other amounts provided in this Agreement, and to the right of each Servicer
to
retain its Servicing Fee and other amounts as provided in the applicable
Servicing Agreement. The Master Servicer and each Servicer shall provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling
such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee
and the Certificateholders and shall be and remain the sole and exclusive
property of the Trustee; provided, however, that the Master Servicer and each
Servicer shall be entitled to setoff against, and deduct from, any such funds
any amounts that are properly due and payable to the Master Servicer or such
Servicer under this Agreement or the applicable Servicing
Agreement.
Section
3.09 Standard
Hazard Insurance and Flood Insurance Policies.
(a) For
each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicers
under the related Servicing Agreements to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance,
all
in accordance with the provisions of the related Servicing Agreements. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in the applicable Servicing Agreement and
that no earthquake or other additional insurance is to be required of any
Mortgagor or to be maintained on property acquired in respect of a defaulted
loan, other than pursuant to such applicable laws and regulations as shall
at
any time be in force and as shall require such additional
insurance.
(b) Pursuant
to Section 4.01 and 4.04, any amounts collected by the Servicers or the Master
Servicer, or by any Servicer, under any insurance policies (other than amounts
to be applied to the restoration or repair of the property subject to the
related Mortgage or released to the Mortgagor in accordance with the applicable
Servicing Agreement) shall be deposited into the Distribution Account, subject
to withdrawal pursuant to Section 4.04 and 4.05. Any cost incurred by the Master
Servicer or any Servicer in maintaining any such insurance if the Mortgagor
defaults in its obligation to do so shall be added to the amount owing under
the
Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders and shall
be
recoverable by the Master Servicer or such Servicer pursuant to Section 4.04
and
4.05.
Section
3.10 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies
and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured’s claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Distribution Account
upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to
the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section
3.11 Maintenance
of the Primary Mortgage Insurance Policies.
(a) The
Master Servicer shall not take, or authorize any Servicer (to the extent such
action is prohibited under the applicable Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Master Servicer
or such Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to cause each Servicer (to the extent required
under the related Servicing Agreement) to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not authorize
any Servicer (to the extent required under the related Servicing Agreement)
to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is
in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The
Master Servicer agrees to present, or to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Trustee and the Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and
4.04,
any amounts collected by the Master Servicer or any Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Distribution Account,
subject to withdrawal pursuant to Sections 4.04 and 4.05.
Section
3.12 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee (or the Custodian, as directed by the Trustee), shall retain possession
and custody of the originals (to the extent available) of any Primary Mortgage
Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect
of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession
and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that
come
into the possession of the Master Servicer from time to time.
Section
3.13 Realization
Upon Defaulted Mortgage Loans.
The
Master Servicer shall cause each Servicer (to the extent required under the
related Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments,
all
in accordance with the applicable Servicing Agreement.
Section
3.14 Compensation
for the Master Servicer.
The
Master Servicer will be entitled to all income and gain realized from any
investment of funds in the Distribution Account for a period not to exceed
five
Business Days preceding the Distribution Date pursuant to Article IV, for the
performance of its activities hereunder. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.
Section
3.15 REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
related Mortgage Loan, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the related Certificateholders. The
Master Servicer shall, to the extent provided in the applicable Servicing
Agreement, cause the applicable Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner
and
to the extent required by the applicable Servicing Agreement, in accordance
with
the REMIC Provisions and in a manner that does not result in a tax on “net
income from foreclosure property” or cause such REO Property to fail to qualify
as “foreclosure property” within the meaning of Section 860G(a)(8) of the
Code.
(b) The
Master Servicer shall, to the extent required by the related Servicing
Agreement, cause the applicable Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Protected
Account.
(c) The
Master Servicer and the applicable Servicer, upon the final disposition of
any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Monthly Advances and other unreimbursed advances as well as any unpaid Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided, that any such unreimbursed Monthly Advances
as
well as any unpaid Servicing Fees may be reimbursed or paid, as the case may
be,
prior to final disposition, out of any net rental income or other net amounts
derived from such REO Property.
(d) To
the
extent provided in the related Servicing Agreement, the Liquidation Proceeds
from the final disposition of the REO Property, net of any payment to the Master
Servicer and the applicable Servicer as provided above shall be deposited in
the
Protected Account on or prior to the Determination Date in the month following
receipt thereof and be remitted by wire transfer in immediately available funds
to the Master Servicer for deposit into the Distribution Account on the next
succeeding Servicer Remittance Date.
Section
3.16 Annual
Statement as to Compliance.
(a) The
Master Servicer and the Securities Administrator shall deliver (or otherwise
make available) to the Depositor and the Securities Administrator not later
than
March 15th of each calendar year beginning in 2007, an Officer’s Certificate (an
“Annual Statement of Compliance”) stating, as to each signatory thereof, that
(i) a review of the activities of each such party during the preceding calendar
year and of its performance under this Agreement or other applicable servicing
agreement has been made under such officer’s supervision and (ii) to the best of
such officer’s knowledge, based on such review, such party has fulfilled all of
its obligations under this Agreement or other applicable 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 of the cure provisions
thereof. Such Annual Statement of Compliance shall contain no restrictions
or
limitations on its use. The Master Servicer shall enforce the obligations of
each Servicer, to the extent set forth in the related Servicing Agreement,
to
deliver a similar Annual Statement of Compliance by that Servicer to the
Depositor and the Securities Administrator as described above as and when
required with respect to the Master Servicer. In the event that certain
servicing responsibilities with respect to any Mortgage Loan have been delegated
by the Master Servicer, the Securities Administrator or a Servicer to a
subservicer or subcontractor, each such entity shall cause such subservicer
or
subcontractor (and with respect to each Servicer, the Master Servicer shall
enforce the obligation of such Servicer to the extent required under the related
Servicing Agreement) to deliver a similar Annual Statement of Compliance by
such
subservicer or subcontractor to the Depositor and the Securities Administrator
as described above as and when required with respect to the Master Servicer
or
the related Servicer (as the case may be).
(b) Failure
of the Master Servicer to comply with this Section 3.16 (including with respect
to the timeframes required herein) shall be deemed an Event of Default, and
at
the written direction of the Depositor the Trustee shall, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Master Servicer for the same. Failure of the Securities
Administrator to comply with this Section 3.16 (including with respect to the
timeframes required in this Section) which failure results in a failure to
timely file the related Form 10-K, shall be deemed a default and the Trustee
at
the written direction of the Depositor shall, in addition to whatever rights
the
Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately
terminate all of the rights and obligations of the Securities Administrator
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Securities Administrator for the same. This paragraph
shall supersede any other provision in this Agreement or any other agreement
to
the contrary.
Section
3.17 Assessments
of Compliance and Attestation Reports.
Pursuant
to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB,
each of the Master Servicer, the Securities Administrator and the Custodian
(to
the extent set forth in this Section) (each, an “Attesting Party”) shall deliver
(or otherwise make available) to the Master Servicer, the Securities
Administrator and the Depositor on or before March 15th of each calendar year
beginning in 2007, a report regarding such Attesting Party’s assessment of
compliance (an “Assessment of Compliance”) with the Servicing Criteria during
the preceding calendar year. The Assessment of Compliance, as set forth in
Regulation AB, must contain the following:
(a) A
statement by an authorized officer of such Attesting Party of its authority
and
responsibility for assessing compliance with the Servicing Criteria applicable
to the related Attesting Party;
(b) A
statement by an authorized officer that such Attesting Party used the Servicing
Criteria attached as Exhibit M hereto, and which will also be attached to the
Assessment of Compliance, to assess compliance with the Servicing Criteria
applicable to the related Attesting Party;
(c) An
assessment by such officer of the related Attesting Party’s compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on
the
activities such Attesting Party performs with respect to asset-backed securities
transactions taken as a whole involving the related Attesting Party, that are
backed by the same asset type as the Mortgage Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the related Attesting Party’s Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the related Attesting Party, which statement shall be based on the activities
such Attesting Party performs with respect to asset-backed securities
transactions taken as a whole involving such Attesting Party, that are backed
by
the same asset type as the Mortgage Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit M hereto which are indicated as applicable to the related Attesting
Party.
On
or
before March 15th of each calendar year beginning in 2007, each Attesting Party
shall furnish to the Master Servicer, the Depositor and the Securities
Administrator a report (an “Attestation Report”) by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
made by the related Attesting Party, as required by Rules 13a-18 and 15d-18
of
the Exchange Act and Item 1122(b) of Regulation AB, which Attestation Report
must be made in accordance with standards for attestation reports issued or
adopted by the Public Company Accounting Oversight Board.
The
Master Servicer shall enforce the obligation of each Servicer to deliver to
the
Securities Administrator, the Master Servicer and the Depositor an Assessment
of
Compliance and Attestation Report as and when provided in the related Servicing
Agreement. Each of the Master Servicer and the Securities Administrator shall
cause, and the Master Servicer shall enforce the obligation (as and when
provided in the related Servicing Agreement) of each Servicer to cause, any
subservicer and each subcontractor (to the extent such subcontractor is
determined by the Master Servicer or the Securities Administrator, as
applicable, to be “participating in the servicing function” within the meaning
of Item 1122 of Regulation AB) that is engaged by such Servicer, the Master
Servicer or the Securities Administrator, as applicable, to deliver to the
Securities Administrator, the Master Servicer and the Depositor an Assessment
of
Compliance and Attestation Report as and when provided above. Such Assessment
of
Compliance, as to any subservicer or subcontractor, shall at a minimum address
the applicable Servicing Criteria specified on Exhibit M hereto which are
indicated as applicable to any “primary servicer” to the extent such subservicer
or subcontractor is performing any servicing function for the party who engages
it and to the extent such party is not itself addressing the Servicing Criteria
related to such servicing function in its own Assessment of Compliance. The
Securities Administrator shall confirm that each of the Assessments of
Compliance delivered to it, taken as a whole, address all of the Servicing
Criteria and taken individually address the Servicing Criteria for each party
as
set forth in Exhibit M and notify the Depositor of any exceptions.
Notwithstanding the foregoing, as to any subcontractor, an Assessment of
Compliance is not required to be delivered unless it is required as part of
a
Form 10-K with respect to the Trust Fund.
The
Custodian shall deliver to the Master Servicer, the Securities Administrator
and
the Depositor an Assessment of Compliance and Attestation Report, as and when
provided above, which shall at a minimum address each of the Servicing Criteria
specified on Exhibit M hereto which are indicated as applicable to a
“custodian”. Notwithstanding the foregoing, an Assessment of Compliance or
Attestation Report is not required to be delivered by any Custodian unless
it is
required as part of a Form 10-K with respect to the Trust Fund.
Failure
of the Master Servicer to comply with this Section 3.17 (including with respect
to the timeframes required herein) shall, upon written notice from the Trustee
at the written direction of the Depositor, constitute an Event of Default,
and
at the written direction of the Depositor the Trustee shall, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Master Servicer for the same (but subject to the Master
Servicer’s rights to payment of any Master Servicing compensation and
reimbursement of all amounts for which it is entitled to be reimbursed prior
to
the date of termination). Failure of the Securities Administrator to comply
with
this Section 3.17 (including with respect to the timeframes required in this
Section) which failure results in a failure to timely file the related Form
10-K, shall, upon written notice from the Trustee at the written direction
of
the Depositor, constitute a default and the Trustee shall, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the
same
(but subject to the Securities Administrator’s right to reimbursement of all
amounts for which it is entitled to be reimbursed prior to the date of
termination). This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
Section
3.18 Reports
Filed with Securities and Exchange Commission.
(a) (i)
(A)
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, prepare and file with the Commission
via
the Electronic Data Gathering and Retrieval System (“▇▇▇▇▇”), a Distribution
Report on Form 10-D, signed by the Master Servicer, with a copy of the Monthly
Statement to be furnished by the Securities Administrator to the
Certificateholders for such Distribution Date; provided that, the Securities
Administrator shall have received no later than five (5) calendar days after
the
related Distribution Date, all information required to be provided to the
Securities Administrator as described in clause (a)(iv) below. Any disclosure
that is in addition to the Monthly Statement and that is required to be included
on Form 10-D (“Additional Form 10-D Disclosure”) shall be, pursuant to the
paragraph immediately below, reported by the parties set forth on Exhibit N
to
the Securities Administrator and the Depositor and approved for inclusion by
the
Depositor, and the Securities Administrator will have no duty or liability
for
any failure hereunder to determine or prepare any Additional Form 10-D
Disclosure absent such reporting (other than in the case where the Securities
Administrator is the reporting party as set forth in Exhibit N) and
approval.
(B)
Within five (5) calendar days after the related Distribution Date, (i) the
parties set forth in Exhibit N shall be required to provide, and the Master
Servicer shall enforce the obligations of each Servicer (to the extent provided
in the related Servicing Agreement) to provide, pursuant to Section 3.18(a)(iv)
below, to the Securities Administrator and the Depositor, to the extent known
by
a responsible officer thereof, in ▇▇▇▇▇-compatible format, or in such other
form
as otherwise agreed upon by the Securities Administrator and the Depositor
and
such party, the form and substance of any Additional Form 10-D Disclosure,
if
applicable, and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form 10-D. The Depositor shall be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this Section.
(C)
After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a copy of the Form 10-D to the Depositor (in the case of any
Additional 10-D Disclosure and otherwise if requested by the Depositor) and
the
Master Servicer for review. Within two Business Days after receipt of such
copy,
but no later than the 12th calendar day after the Distribution Date (provided
that, the Securities Administrator forwards a copy of the Form 10-D no later
than the 10th calendar after the Distribution Date), the Depositor shall notify
the Securities Administrator in writing (which may be furnished electronically)
of any changes to or approval of such Form 10-D. In the absence of receipt
of
any written changes or approval, 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. No later than the
13th calendar day after the related Distribution Date, a duly authorized officer
of the Master Servicer shall sign the Form 10-D and, in the case where the
Master Servicer and the Securities Administrator are not affiliated, return
an
electronic or fax copy of such signed Form 10-D (with an original executed
hard
copy to follow by overnight mail) to the Securities Administrator. If a Form
10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator shall follow the procedures set forth
in
Section 3.18(a)(v)(B). Promptly (but no later than one (1) Business Day) after
filing with the Commission, the Securities Administrator shall make available
on
its internet website identified in Section 6.04 a final executed copy of each
Form 10-D filed by the Securities Administrator. The signing party at the Master
Servicer can be contacted as set forth in Section 12.07. Form 10-D requires
the
registrant to indicate (by checking “yes” or “no”) that it (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than the fifth calendar day after the related
Distribution Date with respect to the filing of a report on Form 10-D, if the
answer to the questions should be “no”. The Securities Administrator shall be
entitled to rely on the representations in Section 2.06(vii) and in any such
notice in preparing, executing and/or filing any such report. The parties to
this Agreement acknowledge that the performance by the Master Servicer and
the
Securities Administrator of their respective duties under Sections 3.18(a)(i)
and (v) 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 such Sections. 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-D, where such failure results from
a
party’s failure to deliver, on a timely basis, any information from such party
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct.
(ii)
(A)
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, at the direction of the Depositor, 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 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, pursuant to the paragraph immediately
below, reported by the parties set forth on Exhibit N to the Securities
Administrator and the Depositor and approved for inclusion by the Depositor,
and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information absent
such reporting (other than in the case where the Securities Administrator is
the
reporting party as set forth in Exhibit N) and approval.
(B)
For
so long as the Trust is subject to the Exchange Act reporting requirements,
no
later than the close of business on the 2nd Business Day after the occurrence
of
a Reportable Event (i) the parties set forth in Exhibit N shall be required
pursuant to Section 3.18(a)(iv) below to provide, and the Master Servicer will
enforce the obligations of each Servicer (to the extent provided in the related
Servicing Agreement) to provide, to the Securities Administrator and the
Depositor, to the extent known by a responsible officer thereof, in
▇▇▇▇▇-compatible format, or in such other form as otherwise agreed upon by
the
Securities Administrator and the Depositor and such party, the form and
substance of any Form 8-K Disclosure Information, if applicable, and (ii) the
Depositor shall approve, as to form and substance, or disapprove, as the case
may be, the inclusion of the Form 8-K Disclosure Information on Form 8-K. The
Depositor shall be responsible for any reasonable fees and expenses assessed
or
incurred by the Securities Administrator in connection with including any Form
8-K Disclosure Information on Form 8-K pursuant to this Section.
(C)
After
preparing the Form 8-K, the Securities Administrator shall forward
electronically a copy of the Form 8-K to the Depositor and the Master Servicer
for review. No later than the close of business New York City time on the 3rd
Business Day after the Reportable Event, or in the case where the Master
Servicer and Securities Administrator are affiliated, no later than noon New
York City time on the 4th Business Day after the Reportable Event, a duly
authorized officer of the Master Servicer shall sign the Form 8-K and, in the
case where the Master Servicer and the Securities Administrator are not
affiliated, 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. Promptly, but no later than the close of business on the 3rd
Business Day after the Reportable Event (provided that, the Securities
Administrator forwards a copy of the Form 8-K no later than noon New York time
on the third Business Day after the Reportable Event), the Depositor shall
notify the Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 8-K. In the absence
of receipt of any written changes or approval, 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. 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 shall follow the procedures
set forth in Section 3.18(a)(v)(B). Promptly (but no later than one (1) Business
Day) after filing with the Commission, the Securities Administrator shall,
make
available on its internet website a final executed copy of each Form 8-K filed
by the Securities Administrator. The signing party at the Master Servicer can
be
contacted as set forth in Section 12.07. The parties to this Agreement
acknowledge that the performance by Master Servicer and the Securities
Administrator of their respective duties under this Section 3.18(a)(ii) 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 3.18(a)(ii). Neither the Master Servicer nor
the
Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from a party’s
failure to deliver on a timely basis, any information from such party hereto
needed to prepare, arrange for execution or file such Form 8-K, not resulting
from its own negligence, bad faith or willful misconduct.
(iii)
(A)
Within 90 days 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”) (it
being understood that the fiscal year for the Trust ends on December 31st of
each year), commencing in March 2007, 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, (I) an annual
compliance statement for each Servicer, the Master Servicer, the Securities
Administrator and any subservicer or subcontractor, as applicable, as described
under Section 3.16, (II)(A) the annual reports on assessment of compliance
with
Servicing Criteria for the Master Servicer, each subservicer and subcontractor
participating in the servicing function, the Securities Administrator and the
Custodian, as described under Section 3.17, and (B) if any such report on
assessment of compliance with Servicing Criteria described under Section 3.17
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any such report on assessment of compliance
with Servicing Criteria described under Section 3.17 is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and
an
explanation why such report is not included, (III)(A) the registered public
accounting firm attestation report for the Master Servicer, each Servicer,
the
Securities Administrator, each subservicer, each subcontractor, as applicable,
and the Custodian, as described under Section 3.17, and (B) if any registered
public accounting firm attestation report described under Section 3.17
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 3.18
(a)(iii)(D) below (provided, however, that the Securities Administrator, at
its
discretion, may omit from the Form 10-K any annual compliance statement,
assessment of compliance or attestation report that is not required to be filed
with such Form 10-K pursuant to Regulation AB). 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, pursuant to the paragraph
immediately below, reported by the parties set forth on Exhibit N to the
Securities Administrator and the Depositor and approved for inclusion by the
Depositor, and the Securities Administrator will have no duty or liability
for
any failure hereunder to determine or prepare any Additional Form 10-K
Disclosure absent such reporting (other than in the case where the Securities
Administrator is the reporting party as set forth in Exhibit N) and
approval.
(B)
No
later than March 15th of each year that the Trust is subject to the Exchange
Act
reporting requirements, commencing in 2007, (i) the parties set forth in Exhibit
N shall be required to provide, and the Master Servicer shall enforce the
obligations of each Servicer (to the extent provided in the related Servicing
Agreement) to provide, pursuant to Section 3.18(a)(iv) below to the Securities
Administrator and the Depositor, to the extent known by a responsible officer
thereof, in ▇▇▇▇▇-compatible format, or in such other form as otherwise agreed
upon by the Securities Administrator and the Depositor and such party, the
form
and substance of any Additional Form 10-K Disclosure, if applicable, and (ii)
the Depositor will approve, as to form and substance, or disapprove, as the
case
may be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K.
The
Depositor shall be responsible for any reasonable fees and expenses assessed
or
incurred by the Securities Administrator in connection with including any
Additional Form 10-K Disclosure on Form 10-K pursuant to this
Section.
(C)
After
preparing the Form 10-K, the Securities Administrator shall forward
electronically a copy of the Form 10-K to the Depositor (only in the case where
such Form 10-K includes Additional Form 10-K Disclosure and otherwise if
requested by the Depositor) and the Master Servicer for review. Within three
Business Days after receipt of such copy, but no later than March 25th (provided
that, the Securities Administrator forwards a copy of the Form 10-K no later
than the third Business Day prior to March 25th), the Depositor shall notify
the
Securities Administrator in writing (which may be furnished electronically)
of
any changes to or approval of such Form 10-K. In the absence of receipt of
any
written changes or approval, 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. No later than the close
of business Eastern Standard time on the 4th Business Day prior to the 10-K
Filing Deadline, an officer of the Master Servicer in charge of the master
servicing function shall sign the Form 10-K and, in the case where the Master
Servicer and the Securities Administrator are unaffiliated, return an electronic
or fax copy of such signed Form 10-K (with an original executed hard copy to
follow by overnight mail) to the Securities Administrator. If a Form 10-K cannot
be filed on time or if a previously filed Form 10-K needs to be amended, the
Securities Administrator will follow the procedures set forth in Section
3.18(a)(v)(B). Promptly (but no later than one (1) Business Day) after filing
with the Commission, the Securities Administrator shall make available on its
internet website a final executed copy of each Form 10-K filed by the Securities
Administrator. The signing party at the Master Servicer can be contacted as
set
forth in Section 12.07. Form 10-K requires the registrant to indicate (by
checking “yes” or “no”) that it (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
The
Depositor shall notify the Securities Administrator in writing, no later than
March 15th
of each
year in which the Trust is subject to the requirements of the Exchange Act
with
respect to the filing of a report on Form 10-K, if the answer to the questions
should be “no”. The Securities Administrator shall be entitled to rely on the
representations in Section 2.06(vii) and in any such notice in preparing,
executing and/or filing any such report. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities
Administrator of their respective duties under Sections 3.18(a)(iv) and (v)
related to the timely preparation, execution and filing of Form 10-K is
contingent upon such parties strictly observing all applicable deadlines in
the
performance of their duties under such Sections and Sections 3.16 and Section
3.17. 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 receive, on a timely basis, any
information from any other party hereto needed to prepare, arrange for execution
or file such Form 10-K, not resulting from its own negligence, bad faith or
willful misconduct.
(D)
Each
Form 10-K shall include a certification (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification”)
required to be included therewith pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act which
shall
be signed by the Certifying Person and delivered to the Securities Administrator
no later than March 15th of each year in which the Trust is subject to the
reporting requirements of the Exchange Act. The Master Servicer shall cause
any
Servicer, and any subservicer or subcontractor engaged by it to provide to
the
Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the “Certifying Person”), by
March 10th of each year in which the Trust is subject to the reporting
requirements of the Exchange Act (or such other date specified in the related
Servicing Agreement) and otherwise within a reasonable period of time upon
request, a certification (each, a “Back-Up Certification”), in the form attached
hereto as Exhibit L, upon which the Certifying Person, the entity for which
the
Certifying Person acts as an officer, and such entity’s officers, directors and
Affiliates (collectively with the Certifying Person, “Certification Parties”)
can reasonably rely. In addition, in the case where the Master Servicer and
Securities Administrator are not affiliated, the Securities Administrator shall
sign a Back-Up Certification substantially in the form of Exhibit L; provided,
however, that the Securities Administrator shall not be required to undertake
an
analysis of any accountant’s report attached as an exhibit to the Form 10-K. An
officer of the Master Servicer in charge of the master servicing function shall
serve as the Certifying Person on behalf of the Trust. Such officer of the
Certifying Person can be contacted as set forth in Section 12.07.
(iv)
With
respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure
or any Form 8-K Disclosure Information (collectively, the “Additional
Disclosure”) relating to the Trust Fund, the Securities Administrator’s
obligation to include such Additional Information in the applicable Exchange
Act
report is subject to receipt from the entity that is indicated in Exhibit N
as
the responsible party for providing that information, if other than the
Securities Administrator, as and when required as described in Section
3.18(a)(i) through (iii) above. Such Additional Disclosure shall be accompanied
by a notice substantially in the form of Exhibit O. Each of the Master Servicer,
the Seller, the Securities Administrator and the Depositor hereby agrees to
notify and provide, and the Master Servicer agrees to enforce the obligations
(to the extent provided in the related Servicing Agreement) of each Servicer
to
notify and provide, to the extent known to the Master Servicer, the Seller,
the
Securities Administrator and the Depositor all Additional Disclosure relating
to
the Trust Fund, with respect to which such party is indicated in Exhibit N
as
the responsible party for providing that information. The Depositor shall be
responsible for any reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Disclosure
information pursuant to this Section.
So
long
as the Depositor is subject to the filing requirements of the Exchange Act
with
respect to the Trust Fund, the Trustee shall notify the Securities Administrator
and the Depositor of any bankruptcy or receivership with respect to the Trustee
or of any proceedings of the type described under Item 1117 of Regulation AB
that have occurred as of the related Due Period, together with a description
thereof, no later than the date on which such information is required of other
parties hereto as set forth under this Section 3.18. In addition, the Trustee
shall notify the Securities Administrator and the Depositor of any affiliations
or relationships that develop after the Closing Date between the Trustee and
the
Depositor, the Seller, the Securities Administrator, the Master Servicer or
the
Custodian of the type described under Item 1119 of Regulation AB, together
with
a description thereof, no later than March 15 of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007. Should
the identification of any of the Depositor, the Seller, the Securities
Administrator, the Master Servicer or the Custodian change, the Depositor shall
promptly notify the Trustee in writing.
(v)
(A)
On or prior to January 30th of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust under the Exchange Act.
(B)
In
the event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator shall
promptly notify the Depositor and the Master Servicer. In the case of Form
10-D
and 10-K, the Depositor, the Master Servicer and the Securities Administrator
shall cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Securities Administrator will, upon receipt of all required Form 8-K
Disclosure Information and upon the approval and direction of the Depositor,
include such disclosure information on the next Form 10-D. In the event that
any
previously filed Form 8-K, 10-D or 10-K needs to be amended, and such amendment
relates to any Additional Disclosure, the Securities Administrator shall notify
the Depositor and the parties affected thereby and such parties will cooperate
to prepare any necessary Form 8-K, 10-DA or 10-KA. Any Form 15, Form 12b-25
or
any amendment to Form 8-K, 10-D or 10-K shall be signed by an appropriate
officer of the Master Servicer. The parties hereto acknowledge that the
performance by the Master Servicer and the Securities Administrator of their
respective duties under this Section 3.18(a)(v) related to the timely
preparation, execution and filing of Form 15, a Form 12b-25 or any amendment
to
Form 8-K, 10-D or 10-K is contingent upon the Master Servicer and the Depositor
timely performing their duties under this Section. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage or claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to Form 8-K, 10-D or 10-K, where such failure results from a party’s
failure to deliver on a timely basis, any information from such party needed
to
prepare, arrange for execution or file such Form 15, Form 12b-25 or any
amendments to Form 8-K, 10-D or 10-K, not resulting from its own negligence,
bad
faith or willful misconduct.
The
Depositor agrees to promptly furnish to the Securities Administrator, from
time
to time upon request, such further information, reports and financial statements
within its control related to this Agreement, the Mortgage Loans as the
Securities Administrator reasonably deems appropriate to prepare and file all
necessary reports with the Commission. The Securities Administrator shall have
no responsibility to file any items other than those specified in this Section
3.18; provided, however, the Securities Administrator shall cooperate with
the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Exchange Act. Fees and expenses
incurred by the Securities Administrator in connection with this Section 3.18
shall not be reimbursable from the Trust Fund.
(b) The
Securities Administrator shall indemnify and hold harmless the Depositor and
the
Master Servicer and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Securities Administrator’s
obligations under Sections 3.16, 3.17 and 3.18 or the Securities Administrator’s
negligence, bad faith or willful misconduct in connection therewith. In
addition, the Securities Administrator shall indemnify and hold harmless the
Depositor and the Master Servicer and each of their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Back-Up Certification, any Annual Statement of Compliance, any Assessment of
Compliance or any Additional Disclosure provided by the Securities Administrator
on its behalf or on behalf of any subservicer or subcontractor engaged by the
Securities Administrator pursuant to Section 3.16, 3.17 or 3.18 (the “Securities
Administrator Information”), or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances in which they were made,
not
misleading; provided, by way of clarification, that this paragraph shall be
construed solely by reference to the Securities Administrator Information and
not to any other information communicated in connection with the Certificates,
without regard to whether the Securities Administrator Information or any
portion thereof is presented together with or separately from such other
information.
The
Depositor shall indemnify and hold harmless the Securities Administrator and
the
Master Servicer and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the obligations of the Depositor under
Sections 3.16, 3.17 and 3.18 or the Depositor’s negligence, bad faith or willful
misconduct in connection therewith. In addition, the Depositor shall indemnify
and hold harmless the Master Servicer, the Securities Administrator and each
of
their respective officers, directors and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Additional Disclosure provided by the Depositor that is
required to be filed pursuant to this Section 3.18 (the “Depositor
Information”), or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
provided, by way of clarification, that this paragraph shall be construed solely
by reference to the Depositor Information that is required to be filed and
not
to any other information communicated in connection with the Certificates,
without regard to whether the Depositor Information or any portion thereof
is
presented together with or separately from such other information.
The
Master Servicer shall indemnify and hold harmless the Securities Administrator
and the Depositor and each of its respective officers, directors and affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the obligations of the Master
Servicer under Sections 3.16, 3.17 and 3.18 or the Master Servicer’s negligence,
bad faith or willful misconduct in connection therewith. In addition, the Master
Servicer shall indemnify and hold harmless the Depositor and each of its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon
(i)
any untrue statement or alleged untrue statement of any material fact contained
in any Annual Statement of Compliance, any Assessment of Compliance or any
Additional Disclosure provided by the Master Servicer on its behalf or on behalf
of any subservicer or subcontractor engaged by the Master Servicer pursuant
to
Section 3.16, 3.17 or 3.18 (the “Master Servicer Information”), or (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, by way of
clarification, that this paragraph shall be construed solely by reference to
the
Master Servicer Information and not to any other information communicated in
connection with the Certificates, without regard to whether the Master Servicer
Information or any portion thereof is presented together with or separately
from
such other information.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, the Securities Administrator or the Master Servicer,
as
applicable, then the defaulting party, in connection with any conduct for which
it is providing indemnification under this Section 3.18(c), agrees that it
shall
contribute to the amount paid or payable by the other parties as a result of
the
losses, claims, damages or liabilities of the other party in such proportion
as
is appropriate to reflect the relative fault and the relative benefit of the
respective parties.
The
indemnification provisions set forth in this Section 3.18(c) shall survive
the
termination of this Agreement or the termination of any party to this
Agreement.
(c) Failure
of the Master Servicer to comply with this Section 3.18 (including with respect
to the timeframes required herein) shall, upon written notice from the Trustee
at the written direction of the Depositor, constitute an Event of Default,
and
the Trustee shall, in addition to whatever rights the Trustee may have under
this Agreement and at law or equity or to damages, including injunctive relief
and specific performance, upon notice immediately terminate all of the rights
and obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same (but subject to the Master Servicer’s rights to payment of any
Master Servicing compensation and reimbursement of all amounts for which it
is
entitled to be reimbursed prior to the date of termination). Failure of the
Securities Administrator to comply with this Section 3.18 (including with
respect to the timeframes required in this Section) which failure results in
a
failure to timely file the related Form 10-K, shall, upon written notice from
the Trustee at the written direction of the Depositor, constitute a default
and
the Trustee at the written direction of the Depositor shall, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the
same
(but subject to the Securities Administrator’s right to reimbursement of all
amounts for which it is entitled to be reimbursed prior to the date of
termination). This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary. In connection with the
termination of the Master Servicer or the Securities Administrator pursuant
to
this Section 3.18(d), the Trustee shall be entitled to reimbursement of all
costs and expenses associated with such termination to the extent set forth
in
Section 9.05. Notwithstanding anything to the contrary in this Agreement, no
Event of Default by the Master Servicer or default by the Securities
Administrator shall have occurred with respect to any failure to properly
prepare, execute and/or timely file any report on Form 8-K, Form 10-D or Form
10-K, any Form 15 or Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K,
where such failure results from the Master Servicer’s or the Securities
Administrator’s inability or failure to receive, on a timely basis, any
information from any other party hereto needed to prepare, arrange for execution
or file any such report, Form or amendment, and does not result from its own
negligence, bad faith or willful misconduct.
(e) Notwithstanding
the provisions of Section 12.02, this Section 3.18 may be amended without the
consent of the Certificateholders.
(f) Any
report, notice or notification to be delivered by the Master Servicer or the
Securities Administrator to the Depositor pursuant to this Section 3.18, may
be
delivered via email to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇ or, in the case of a
notification, telephonically by calling Reg AB Compliance Manager at
▇▇▇-▇▇▇-▇▇▇▇.
Section
3.19 UCC.
The
Depositor shall inform the Trustee in writing of any Uniform Commercial Code
financing statements that were filed on the Closing Date in
connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the
Depositor. The Trustee agrees to monitor and notify the Depositor if
any continuation statements for such Uniform Commercial Code financing
statements need to be filed. If directed by the Depositor in writing, the
Trustee will file any such continuation statements solely at the expense of
the
Depositor. The Depositor shall file any financing statements or amendments
thereto required by any change in the Uniform Commercial Code.
Section
3.20 Optional
Purchase of Defaulted Mortgage Loans.
(a) With
respect to any Mortgage Loan which as of the first day of a Fiscal Quarter
is
delinquent in payment by 90 days or more or is an REO Property, the Seller
shall
have the right to purchase such Mortgage Loan from the Trust at a price equal
to
the Purchase Price; provided however (i) that such Mortgage Loan is still 90
days or more delinquent or is an REO Property as of the date of such purchase
and (ii) this purchase option, if not theretofore exercised, shall terminate
on
the date prior to the last day of the related Fiscal Quarter. This purchase
option, if not exercised, shall not be thereafter reinstated unless the
delinquency is cured and the Mortgage Loan thereafter again becomes 90 days
or
more delinquent or becomes an REO Property, in which case the option shall
again
become exercisable as of the first day of the related Fiscal
Quarter.
(b) If
at any
time EMC remits to the Master Servicer a payment for deposit in the Distribution
Account covering the amount of the Repurchase Price for such a Mortgage Loan,
and EMC provides to the Trustee a certification signed by a Servicing Officer
stating that the amount of such payment has been deposited in the Distribution
Account, then the Trustee shall execute the assignment of such Mortgage Loan
prepared and delivered to the Trustee, at the request of EMC, without recourse,
representation or warranty, to EMC which shall succeed to all of the Trustee’s
right, title and interest in and to such Mortgage Loan, and all security and
documents relative thereto. Such assignment shall be an assignment outright
and
not for security. EMC will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
Section
3.21 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.16, 3.17
and
3.18 of this Agreement is to facilitate compliance by the Seller, the Depositor
and the Master Servicer with the provisions of Regulation AB. Therefore, each
of
the parties agrees that (a) the obligations of the parties hereunder shall
be
interpreted in such a manner as to accomplish that purpose, (b) the parties’
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation
AB,
(c) the parties shall comply with reasonable requests made by the Seller, the
Depositor, the Master Servicer or the Securities Administrator for delivery
of
additional or different information as the Seller, the Depositor, the Master
Servicer or the Securities Administrator may determine in good faith is
necessary to comply with the provisions of Regulation AB, and (d) no amendment
of this Agreement shall be required to effect any such changes in the
obligations of the parties to this transaction as are necessary to accommodate
evolving interpretations of the provisions of Regulation AB.
ARTICLE
IV
ACCOUNTS
Section
4.01 Protected
Accounts.
(a) The
Master Servicer shall enforce the obligation of each Servicer to establish
and
maintain a Protected Account in accordance with the applicable Servicing
Agreement, with records to be kept with respect thereto on a Mortgage Loan
by
Mortgage Loan basis, into which accounts shall be deposited within 48 hours
(or
as of such other time specified in the related Servicing Agreement) of receipt,
all collections of principal and interest on any Mortgage Loan and any REO
Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Servicer’s own funds
(less servicing compensation as permitted by the applicable Servicing Agreement
in the case of any Servicer) and all other amounts to be deposited in the
Protected Account. The Servicer is hereby authorized to make withdrawals from
and deposits to the related Protected Account for purposes required or permitted
by this Agreement. To the extent provided in the related Servicing Agreement,
the Protected Account shall be held by a Designated Depository Institution
and
segregated on the books of such institution in the name of the Trustee for
the
benefit of Certificateholders.
(b) To
the
extent provided in the related Servicing Agreement, amounts on deposit in a
Protected Account may be invested in Permitted Investments in the name of the
Trustee for the benefit of Certificateholders and, except as provided in the
preceding paragraph, not commingled with any other funds. Such Permitted
Investments shall mature, or shall be subject to redemption or withdrawal,
no
later than the date on which such funds are required to be withdrawn for deposit
in the Distribution Account, and shall be held until required for such deposit.
The income earned from Permitted Investments made pursuant to this Section
4.01
shall be paid to the related Servicer under the applicable Servicing Agreement,
and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be
the
risk of the related Servicer. The related Servicer (to the extent provided
in
the Servicing Agreement) shall deposit the amount of any such loss in the
Protected Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders.
(c) To
the
extent provided in the related Servicing Agreement and subject to this Article
IV, on or before each Servicer Remittance Date, the related Servicer shall
withdraw or shall cause to be withdrawn from its Protected Accounts and shall
immediately deposit or cause to be deposited in the Distribution Account amounts
representing the following collections and payments (other than with respect
to
principal of or interest on the Mortgage Loans due on or before the Cut-off
Date) with respect to each Loan Group:
(i) Scheduled
Payments on the Mortgage Loans received or any related portion thereof advanced
by such Servicer pursuant to its Servicing Agreement which were due on or before
the related Due Date, net of the amount thereof comprising its Servicing Fee
or
any fees with respect to any lender-paid primary mortgage insurance
policy;
(ii) Full
Principal Prepayments and any Liquidation Proceeds received by such Servicer
with respect to the Mortgage Loans in the related Prepayment Period, with
interest to the date of prepayment or liquidation, net of the amount thereof
comprising its Servicing Fee;
(iii) Partial
Principal Prepayments received by such Servicer for the Mortgage Loans in the
related Prepayment Period; and
(iv) Any
amount to be used as a Monthly Advance.
(d) Withdrawals
may be made from an Account only to make remittances as provided in Section
4.01(c), 4.04 and 4.05; to reimburse the Master Servicer or a Servicer for
Monthly Advances which have been recovered by subsequent collections from the
related Mortgagor; to remove amounts deposited in error; to remove fees, charges
or other such amounts deposited on a temporary basis; or to clear and terminate
the account at the termination of this Agreement in accordance with Section
10.01. As provided in Sections 4.01(a) and 4.04 certain amounts otherwise due
to
the Servicers may be retained by them and need not be deposited in the
Distribution Account.
(e) In
the
event that the Master Servicer and Securities Administrator are no longer
affiliated, the Master Servicer shall establish and maintain an account separate
from the Distribution Account into which any funds remitted by the Servicers
will be deposited. No later than noon. New York time on the Business Day prior
to each Distribution Date, the Master Servicer shall remit any such funds to
the
Paying Agent for deposit in the Distribution Account. The Master Servicer shall
make the following permitted withdrawals and transfers from such
account:
(i) The
Master Servicer will, from time to time on demand of a Servicer or the
Securities Administrator, make or cause to be made such withdrawals or transfers
from the account as the Master Servicer has designated for such transfer or
withdrawal pursuant to this Agreement and the related Servicing Agreement.
The
Master Servicer may clear and terminate the account pursuant to Section 10.01
and remove amounts from time to time deposited in error.
(ii) On
an
ongoing basis, the Master Servicer shall withdraw from the account (i) any
expenses, costs and liabilities recoverable by the Trustee, the Master Servicer
or the Securities Administrator or the Custodian pursuant to Sections 3.03,
7.04
and 9.05 and (ii) any amounts payable to the Master Servicer as set forth in
Section 3.14; provided, however, that the Master Servicer shall be obligated
to
pay from its own funds any amounts which it is required to pay under Section
7.03(a).
(iii) In
addition, on or before each Business Day prior to each Distribution Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(iv) No
later
than noon. New York time on each Business Day prior to each Distribution Date,
the Master Servicer will transfer all Available Funds on deposit in the account
with respect to the related Distribution Date to the Paying Agent for deposit
in
the Distribution Account.
Section
4.02 [Reserved].
Section
4.03 [Reserved].
Section
4.04 Distribution
Account.
(a) The
Paying Agent shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Distribution Account as a segregated
trust account or accounts. The Distribution Account shall be an Eligible
Account. The Master Servicer or Servicers, as the case may be, will remit to
the
Securities Administrator for deposit in the Distribution Account, the following
amounts:
(i) Any
amounts withdrawn from a Protected Account;
(ii) Any
Monthly Advance and any Compensating Interest Payments;
(iii) Any
Insurance Proceeds or Net Liquidation Proceeds received by or on behalf of
the
Master Servicer or which were not deposited in a Protected Account;
(iv) The
Repurchase Price with respect to any Mortgage Loans purchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03
hereof, any amounts which are to be treated pursuant to Section 2.04 of this
Agreement as the payment of a Repurchase Price in connection with the tender
of
a Substitute Mortgage Loan by the Seller, the Repurchase Price with respect
to
any Mortgage Loans purchased by EMC pursuant to Section 3.20, and all proceeds
of any Mortgage Loans or property acquired with respect thereto repurchased
by
the Depositor or its designee pursuant to Section 10.01;
(v) Any
amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(vi) Any
other
amounts received by or on behalf of the Master Servicer and required to be
deposited in the Distribution Account pursuant to this Agreement.
(b) All
amounts deposited to the Distribution Account shall be held by the Securities
Administrator in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of (i) prepayment or late payment
charges or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Subsections 4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii),
(ix) and (x), need not be credited by the Master Servicer or the related
Servicer to the Distribution Account. In the event that the Master Servicer
shall deposit or cause to be deposited to the Distribution Account any amount
not required to be credited thereto, the Trustee, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer, any provision herein
to
the contrary notwithstanding.
(c) The
Distribution Account shall constitute a trust account of the Trust Fund
segregated on the books of the Paying Agent and held by the Paying Agent in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Paying
Agent or the Master Servicer (whether made directly, or indirectly through
a
liquidator or receiver of the Paying Agent or the Master Servicer). The
Distribution Account shall be an Eligible Account. The amount at any time
credited to the Distribution Account shall be (i) held in cash and fully insured
by the FDIC to the maximum coverage provided thereby or (ii) invested in the
name of the Paying Agent, in such Permitted Investments as may be selected
by
the Master Servicer or deposited in demand deposits with such depository
institutions as may be selected by the Master Servicer, provided that time
deposits of such depository institutions would be a Permitted Investment. All
Permitted Investments shall mature or be subject to redemption or withdrawal
on
or before, and shall be held until, the next succeeding Distribution Date if
the
obligor for such Permitted Investment is the Paying Agent or, if such obligor
is
any other Person, the Business Day preceding such Distribution Date. All
investment earnings on amounts on deposit in the Distribution Account or benefit
from funds uninvested therein from time to time shall be for the account of
the
Master Servicer. The Master Servicer shall be permitted to receive distribution
of all investment earnings from the Distribution Account earned on funds on
deposit in the Distribution Account for a period not to exceed five Business
Days prior to each Distribution Date and the Depositor or its designee shall
be
entitled to any investment earnings from the Distribution Account for any
remaining days and shall instruct the Securities Administrator where to remit
such investment earnings from the Distribution Account. If there is any loss
on
a Permitted Investment or demand deposit, the Master Servicer shall remit the
amount of the related loss to the Paying Agent who shall deposit such amount
in
the Distribution Account. With respect to the Distribution Account and the
funds
deposited therein, the Master Servicer shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against
the
estate of the Paying Agent) as provided by 12 U.S.C. § 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
Section
4.05 Permitted
Withdrawals and Transfers from the Distribution Account.
(a) The
Paying Agent will, from time to time on demand of the Master Servicer or the
Securities Administrator, make or cause to be made such withdrawals or transfers
from the Distribution Account as the Master Servicer has designated for such
transfer or withdrawal pursuant to this Agreement and the Servicing Agreements
or as the Securities Administrator has instructed hereunder for the following
purposes (limited in the case of amounts due the Master Servicer to those not
withdrawn from the Distribution Account in accordance with the terms of this
Agreement):
(i) to
reimburse the Master Servicer or any Servicer for any Monthly Advance of its
own
funds, the right of the Master Servicer or a Servicer to reimbursement pursuant
to this subclause (i) being limited to amounts received on a particular Mortgage
Loan (including, for this purpose, the Repurchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late payments or recoveries
of the principal of or interest on such Mortgage Loan respecting which such
Monthly Advance was made;
(ii) to
reimburse the Master Servicer (i) any expenses, costs and liabilities
recoverable by the Trustee, the Master Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth in Section 3.14; provided, however,
that the Master Servicer shall be obligated to pay from its own funds any
amounts which it is required to pay under Section 7.03(a);
(iii) to
reimburse the Master Servicer or any Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended
by the Master Servicer or such Servicer in good faith in connection with the
restoration of the related Mortgaged Property which was damaged by an Uninsured
Cause or in connection with the liquidation of such Mortgage Loan;
(iv) to
reimburse the Master Servicer or any Servicer from Insurance Proceeds relating
to a particular Mortgage Loan for insured expenses incurred with respect to
such
Mortgage Loan and to reimburse the Master Servicer or such Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master Servicer
shall not be entitled to reimbursement for Liquidation Expenses with respect
to
a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage
Loan were paid as Excess Liquidation Proceeds pursuant to clause (viii) of
this
Subsection 4.05 (a) to the Master Servicer; and (ii) such Liquidation Expenses
were not included in the computation of such Excess Liquidation
Proceeds;
(v) to
reimburse the Master Servicer or any Servicer for advances of funds (other
than
Monthly Advances) made with respect to the Mortgage Loans, and the right to
reimbursement pursuant to this subclause being limited to amounts received
on
the related Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(vi) to
reimburse the Master Servicer or any Servicer for any Monthly Advance or
advance, after a Realized Loss has been allocated with respect to the related
Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant
to clauses (i) and (iv);
(vii) to
pay
the Master Servicer as set forth in Section 3.14;
(viii) to
reimburse the Master Servicer for expenses, costs and liabilities incurred
by
and reimbursable to it pursuant to Sections 3.03 and 7.04(c) and
(d);
(ix) to
pay to
the Master Servicer, as additional servicing compensation, any Excess
Liquidation Proceeds to the extent not retained by the related
Servicer;
(x) to
reimburse or pay any Servicer any such amounts as are due thereto under the
applicable Servicing Agreement and have not been retained by or paid to the
Servicer, to the extent provided in the related Servicing
Agreement;
(xi) to
reimburse the Trustee, the Securities Administrator or the Custodian for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to
this Agreement;
(xii) to
remove
amounts deposited in error;
(xiii) to
pay
the Depositor all investment earnings to which it is entitled as set forth
in
Section 4.04(c); and
(xiv) to
clear
and terminate the Distribution Account pursuant to Section 10.01.
(b) The
Securities Administrator shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(iv), inclusive, and (vi) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the
Securities Administrator without being deposited in the Distribution Account
under Section 4.02(b).
(c) On
each
Distribution Date, the Paying Agent shall distribute the Available Funds to
the
extent on deposit in the Distribution Account for each Loan Group to the Holders
of the Certificates in accordance with distribution instructions provided to
it
by the Securities Administrator no later than two Business Days prior to such
Distribution Date and determined by the Securities Administrator in accordance
with Section 6.01.
ARTICLE
V
CERTIFICATES
Section
5.01 Certificates.
(a) The
Depository and the Issuing Entity have entered into a Depository Agreement
dated
as of the Closing Date (the “Depository Agreement”). Except for the Residual
Certificates, the Private Certificates and the Individual Certificates and
as
provided in Subsection 5.01(b), the Certificates shall at all times remain
registered in the name of the Depository or its nominee and at all times: (i)
registration of such Certificates may not be transferred by the Certificate
Registrar except to a successor to the Depository; (ii) ownership and transfers
of registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iii) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (iv) the Certificate Registrar shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Certificate Registrar
may
rely and shall be fully protected in relying upon information furnished by
the
Depository with respect to its Depository Participants.
The
Residual Certificates and the Private Certificates are initially Physical
Certificates. If at any time the Holders of all of the Certificates of one
or
more such Classes request that the Certificate Registrar cause such Class to
become Global Certificates, the Certificate Registrar and the Depositor will
take such action as may be reasonably required to cause the Depository to accept
such Class or Classes for trading if it may legally be so traded.
All
transfers by Certificate Owners of such respective Classes of Book-Entry
Certificates and any Global Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository’s
normal procedures.
(b) If
(i)(A)
the Depositor advises the Certificate Registrar in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Certificate Registrar or the Depositor is unable to
locate a qualified successor within 30 days or (ii) the Depositor at its option
advises the Certificate Registrar in writing that it elects to terminate the
book-entry system through the Depository, the Certificate Registrar, as agent
of
the Depositor, shall request that the Depository notify all Certificate Owners
of the occurrence of any such event and of the availability of definitive,
fully
registered Certificates to Certificate Owners requesting the same. Upon
surrender to the Certificate Registrar, as agent of the Depositor, of the
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Certificate Registrar shall issue the
definitive Certificates. Neither the Depositor nor the Certificate Registrar
shall be liable for any delay in delivery of any instructions required under
this section and may conclusively rely on, and shall be protected in relying
on,
such instructions.
In
addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner’s Fractional
Undivided Interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures
of
the Depository, provide the Depository or the related Depository Participant
with directions for the Certificate Registrar to exchange or cause the exchange
of the Certificate Owner’s interest in such Class of Certificates for an
equivalent Fractional Undivided Interest in fully registered definitive form.
Upon receipt by the Certificate Registrar of instructions from the Depository
directing the Certificate Registrar to effect such exchange (such instructions
to contain information regarding the Class of Certificates and the Current
Principal Amount being exchanged, the Depository Participant account to be
debited with the decrease, the registered holder of and delivery instructions
for the definitive Certificate, and any other information reasonably required
by
the Certificate Registrar), (i) the Certificate Registrar shall instruct the
Depository to reduce the related Depository Participant’s account by the
aggregate Current Principal Amount of the definitive Certificate, (ii) the
Certificate Registrar shall execute, authenticate and deliver, in accordance
with the registration and delivery instructions provided by the Depository,
a
definitive Certificate evidencing such Certificate Owner’s Fractional Undivided
Interest in such Class of Certificates and (iii) the Certificate Registrar
shall
execute and authenticate a new Book-Entry Certificate reflecting the reduction
in the Current Principal Amount of such Class of Certificates by the amount
of
the definitive Certificates.
(c) (i) REMIC
I
will be evidenced by (x) the REMIC I Regular Interests, which will be
uncertificated and non-transferable and are hereby designated as the “regular
interests” in REMIC I and have the initial principal amounts and (other than
REMIC I Regular Interest R-II/R-III) accrue interest at the Pass-Through Rates
equal to those set forth in this Section 5.01(c)(i) and (y) the Class R-I
Certificates, which are hereby designated as representing the sole class of
“residual interests” in REMIC I.
The
REMIC
I Regular Interests and the Class R-I Certificate will have the following
designations, initial principal amounts and Pass-Through Rates:
|
REMIC
I Interest
|
Initial
Principal Amount
|
Pass-Through
Rate
|
Related
Loan Group
|
|||||||
|
I-Sub
|
$
|
257.47
|
(1)
|
|
Loan
Group I
|
|||||
|
I-Grp
|
$
|
5,719.47
|
(2)
|
|
Loan
Group I
|
|||||
|
II-Sub
|
$
|
2,751.77
|
(1)
|
|
Loan
Group II
|
|||||
|
II-Grp
|
$
|
61,149.97
|
(3)
|
|
Loan
Group II
|
|||||
|
III-Sub
|
$
|
975.05
|
(1)
|
|
Loan
Group III
|
|||||
|
III-Grp
|
$
|
21,665.85
|
(4)
|
|
Loan
Group III
|
|||||
|
IV-Sub
|
$
|
1,357.09
|
(1)
|
|
Loan
Group IV
|
|||||
|
IV-Grp
|
$
|
30,157.39
|
(5)
|
|
Loan
Group IV
|
|||||
|
R-II/R-III
|
$
|
100.00
|
0.00%
|
|
N/A
|
|||||
|
ZZZ
|
$
|
1,186,802,901.66
|
(1)
|
|
Loan
Group I through Loan Group IV
|
|||||
|
Class
R-I
|
$
|
50.00
|
0.00%
|
|
N/A
|
|||||
(1) The
weighted average of the Net Rates of the Mortgage Loans, weighted on the basis
of the respective Scheduled Principal Balances of each such Mortgage Loan as
of
the beginning of the Due Period immediately preceding the related Distribution
Date.
(2) The
weighted average of the Net Rates of the Group I Mortgage Loans, weighted on
the
basis of the respective Scheduled Principal Balances of each such Mortgage
Loan
as of the beginning of the Due Period immediately preceding the related
Distribution Date.
(3) The
weighted average of the Net Rates of the Group II Mortgage Loans, weighted
on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date.
(4) The
weighted average of the Net Rates of the Group III Mortgage Loans, weighted
on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date.
(5) The
weighted average of the Net Rates of the Group IV Mortgage Loans, weighted
on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date.
Interest
shall be payable to the REMIC I Regular Interests at the applicable Pass-Through
Rates on the related Uncertificated Principal Balances. On the Distribution
Date
in June 2006, REMIC I Regular Interest R-II/R-III will be paid $100 in reduction
of its Uncertificated Principal Balance from the Class R-II Deposit and the
Class R-III Deposit held in the Distribution Account. Distributions of principal
shall be deemed to be made from amounts received on the Mortgage Loans to the
REMIC I Regular Interests (other than REMIC I Regular Interest R-II/R-III),
first, so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation “Grp” equal to 0.01% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Loan
Group; second, to each REMIC I Regular Interest ending with the designation
“Sub,” so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group over (y)
the
aggregate Current Principal Amount of the Senior Certificates in the related
Certificate Group (except that if any such excess is a larger number than in
the
preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular Interests such that the REMIC I Subordinated
Balance Ratio is maintained); and third, any remaining principal to REMIC I
Regular Interest ZZZ. Realized Losses on the Mortgage Loans shall be applied
after all distributions have been made on each Distribution Date, first, so
as
to keep the Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation “Grp” equal to 0.01% of the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group; second,
to
each REMIC I Regular Interest ending with the designation “Sub,” so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance of
the
Mortgage Loans in the related Loan Group over (y) the Current Principal Amount
of the Senior Certificates in the related Certificate Group (except that if
any
such excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained);
and
third, any remaining Realized Losses on the Mortgage Loans shall be allocated
to
REMIC I Regular Interest ZZZ.
The
aggregate amount of any Net Interest Shortfalls and interest portion of Realized
Losses for any Distribution Date shall be allocated to accrued interest payable
to the REMIC I Regular Interests (other than REMIC I Regular Interest
R-II/R-III), pro
rata,
based
on, and to the extent of, one month’s interest at the then applicable respective
Pass-Through Rates on the respective Uncertificated Principal Balances of each
such REMIC I Regular Interest.
(ii) REMIC
II
will be evidenced by (x) the REMIC II Regular Interests, which will be
uncertificated and non-transferable and are hereby designated as the “regular
interests” in REMIC II and have the initial principal amounts and (other than
REMIC II Regular Interest R-III) accrue interest at the Pass-Through Rates
equal
to those set forth in this Section 5.01(c)(ii) and (y) the Class R-II
Certificates, which are hereby designated as representing the sole class of
“residual interests” in REMIC II.
The
REMIC
II Regular Interests and the Class R-II Certificate will have the following
designations, initial principal amounts and Pass Through Rates:
|
Designation
|
Initial
Principal Amount
|
Pass-Through
Rate
|
|||||
|
I-A-1
|
$
|
52,046,000.00
|
(1)
|
|
|||
|
I-A-2
|
$
|
2,574,000.00
|
(1)
|
|
|||
|
II-A-1
|
$
|
556,464,000.00
|
(2)
|
|
|||
|
II-A-2
|
$
|
27,518,000.00
|
(2)
|
|
|||
|
III-A-1
|
$
|
75,000,000.00
|
(3)
|
|
|||
|
III-A-2
|
$
|
122,158,000.00
|
(3)
|
|
|||
|
III-A-3
|
$
|
9,750,000.00
|
(3)
|
|
|||
|
IV-A-1
|
$
|
274,432,000.00
|
(4)
|
|
|||
|
IV-A-2
|
$
|
13,571,000.00
|
(4)
|
|
|||
|
Class
R-II
|
$
|
50.00
|
0.00%
|
|
|||
|
R-III
|
$
|
50.00
|
0.00%
|
|
|||
|
B-1
|
$
|
30,266,000.00
|
(5)
|
|
|||
|
B-2
|
$
|
8,309,000.00
|
(5)
|
|
|||
|
B-3
|
$
|
5,341,000.00
|
(5)
|
|
|||
|
B-4
|
$
|
3,561,000.00
|
(5)
|
|
|||
|
B-5
|
$
|
2,967,000.00
|
(5)
|
|
|||
|
B-6
|
$
|
2,969,935.75
|
(5)
|
|
|||
(1) A
variable Pass-Through Rate equal to the weighted average of the Pass-Through
Rate on REMIC I Regular Interest I-Grp, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date.
(2) A
variable Pass-Through Rate equal to the weighted average of the Pass-Through
Rate on REMIC I Regular Interest II-Grp, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date.
(3) A
variable Pass-Through Rate equal to the weighted average of the Pass-Through
Rate on REMIC I Regular Interest III-Grp, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date.
(4) A
variable Pass-Through Rate equal to the weighted average of the Pass-Through
Rate on REMIC I Regular Interest IV-Grp, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date.
(5) A
variable Pass-Through Rate equal to the weighted average of the Pass-Through
Rates on REMIC I Regular Interests I-Sub, II-Sub, III-Sub and IV-Sub, weighted
on the basis of the Uncertificated Principal Balances of each such REMIC I
Regular Interest immediately preceding the related Distribution Date, provided
that for purposes of calculating such weighted average, the Pass-Through Rate
of
each such REMIC I Regular Interest shall be subject to a cap and a floor equal
to the Pass-Through Rate of the REMIC I Regular Interest from the related Loan
Group ending with the designation “Grp”.
Principal
shall be payable to, and shortfalls, losses and prepayments are allocable to,
the REMIC II Regular Interests as such amounts are payable and allocable to
the
Corresponding Certificates; provided that, solely for purposes of the foregoing,
any shortfalls or losses allocable to the Class II-X Certificates and the Class
III-X Certificates shall be deemed to be allocated entirely to the Class II-A-1
Certificates and the Class III-A-2 Certificates, respectively. Interest shall
be
payable to the REMIC II Regular Interests at the Pass-Through Rate for each
such
REMIC II Regular Interest on each such REMIC II Regular Interest’s
Uncertificated Principal Balance.
(iii) The
Classes of the Certificates shall have the following designations, initial
principal amounts and Pass-Through Rates:
|
Designation
|
Initial
Principal Amount
|
Pass-Through
Rate
|
|||||
|
I-A-1
|
$
|
52,046,000.00
|
(1)
|
|
|||
|
I-A-2
|
$
|
2,574,000.00
|
(1)
|
|
|||
|
II-A-1
|
$
|
556,464,000.00
|
(2)
|
|
|||
|
II-X
|
(3
|
)
|
(4)
|
|
|||
|
II-A-2
|
$
|
27,518,000.00
|
(5)
|
|
|||
|
III-A-1
|
$
|
75,000,000.00
|
(6)
|
|
|||
|
III-A-2
|
$
|
122,158,000.00
|
(7)
|
|
|||
|
III-X
|
(3
|
)
|
(8)
|
|
|||
|
III-A-3
|
$
|
9,750,000.00
|
(6)
|
|
|||
|
IV-A-1
|
$
|
274,432,000.00
|
(9)
|
|
|||
|
IV-A-2
|
$
|
13,571,000.00
|
(9)
|
|
|||
|
R-I
|
$
|
50.00
|
(10)
|
|
|||
|
R-II
|
$
|
50.00
|
(10)
|
|
|||
|
R-III
|
$
|
50.00
|
(10)
|
|
|||
|
B-1
|
$
|
30,266,000.00
|
(11)
|
|
|||
|
B-2
|
$
|
8,309,000.00
|
(11)
|
|
|||
|
B-3
|
$
|
5,341,000.00
|
(11)
|
|
|||
|
B-4
|
$
|
3,561,000.00
|
(11)
|
|
|||
|
B-5
|
$
|
2,967,000.00
|
(11)
|
|
|||
|
B-6
|
$
|
2,969,935.75
|
(11)
|
|
|||
(1) The
Class
I-A-1 Certificates and Class I-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
I
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class I-A-1 Certificates and Class I-A-2 Certificates
will bear interest at a rate equivalent to the foregoing, expressed as the
weighted average of the Pass-Through Rates on REMIC II Regular Interests I-A-1
and I-A-2, weighted on the basis of the Uncertificated Principal Balances of
each such REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate for the Class I-A-1 Certificates and
Class I-A-2 Certificates with respect to the first Interest Accrual Period
is
6.026% per annum.
(2) On
or
prior to the Distribution Date in March 2011, the Class II-A-1 Certificates
will
bear interest at a fixed pass-through rate equal to approximately 5.650% per
annum, subject to an interest rate cap equal to the weighted average of the
Net
Rates of the Group II Mortgage Loans. After the Distribution Date in March
2011,
the Class II-A-1 Certificates will bear interest at a variable Pass-Through
Rate
equal to the weighted average of the Net Rates of the Group II Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
the related Distribution Date; provided that, for federal income tax purposes
the Class II-A-1 Certificates will bear interest at a rate equivalent to the
foregoing, calculated using the weighted average of the Pass-Through Rate on
REMIC II Regular Interest II-A-1, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date, in place of the weighted average of the Net Rates
of
the Group II Mortgage Loans. The Pass-Through Rate for the Class II-A-1
Certificates with respect to the first Interest Accrual Period is 5.650% per
annum.
(3) As
described in the definition of Notional Amount herein.
(4) On
or
prior to the Distribution Date in March 2011, the Class II-X Certificates will
bear interest at a variable Pass-Through Rate equal to the excess, if any,
of
(a) the weighted average of the Net Rates of the Group II Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
the related Distribution Date, over (b) the Pass-Through Rate of the Class
II-A-1 Certificates. After the Distribution Date in March 2011, the Class II-X
Certificates will not bear any interest. For federal income tax purposes, the
Class II-X Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the excess, if any, of (i) the weighted average of
the
Pass-Through Rate on REMIC II Regular Interest II-A-1, weighted on the basis
of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date, over (ii) the weighted
average of the Pass-Through Rate on the Class II-A-1 Certificates, weighted
on
the basis of the Current Principal Amount of such Certificates immediately
preceding the related Distribution Date. The Pass-Through Rate for the Class
II-X Certificates with respect to the first Interest Accrual Period is 0.242%
per annum.
(5) The
Class
II-A-2 Certificates will bear interest at a variable Pass-Through Rate equal
to
the weighted average of the Net Rates of the Group II Mortgage Loans, weighted
on the basis of the respective Scheduled Principal Balances of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date; provided that, for federal income tax purposes the
Class II-A-2 Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rate on REMIC
II Regular Interest II-A-2, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is 5.892% per annum.
(6) The
Class
III-A-1 Certificates and Class III-A-3 Certificates will bear interest at a
variable Pass-Through Rate equal to the weighted average of the Net Rates of
the
Group III Mortgage Loans, weighted on the basis of the respective Scheduled
Principal Balances of each such Mortgage Loan as of the beginning of the Due
Period immediately preceding the related Distribution Date; provided that,
for
federal income tax purposes the Class III-A-1 Certificates and Class III-A-2
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC Regular Interests
III-A-1 and III-A-3, weighted on the basis of the Uncertificated Principal
Balances of each such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is 6.060% per annum.
(7) On
or
prior to the Distribution Date in April 2013, the Class III-A-2 Certificates
will bear interest at a fixed pass-through rate equal to approximately 5.750%
per annum, subject to an interest rate cap equal to the weighted average of
the
Net Rates of the Group III Mortgage Loans. After the Distribution Date in April
2013, the Class III-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
III Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class III-A-2 Certificates will bear interest at a
rate
equivalent to the foregoing, calculated using the weighted average of the
Pass-Through Rate on REMIC II Regular Interest III-A-2, weighted on the basis
of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date, in place of the weighted
average of the Net Rates of the Group III Mortgage Loans. The Pass-Through
Rate
for the Class III-A-2 Certificates with respect to the first Interest Accrual
Period is 5.750% per annum.
(8) On
or
prior to the Distribution Date in April 2013, the Class III-X Certificates
will
bear interest at a variable Pass-Through Rate equal to the excess, if any,
of
(a) the weighted average of the Net Rates of the Group III Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
the related Distribution Date, over (b) the Pass-Through Rate of the Class
III-A-2 Certificates. After the Distribution Date in April 2013, the Class
III-X
Certificates will not bear any interest. For federal income tax purposes, the
Class III-X Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the excess, if any, of (i) the weighted average of
the
Pass-Through Rate on REMIC II Regular Interest III-A-2, weighted on the basis
of
the Uncertificated Principal Balance of such REMIC III Regular Interest
immediately preceding the related Distribution Date, over (ii) the weighted
average of the Pass-Through Rate on the Class III-A-2 Certificates, weighted
on
the basis of the Current Principal Amount of such Certificates immediately
preceding the related Distribution Date. The Pass-Through Rate with respect
to
the first Interest Accrual Period is 0.310% per annum.
(9) The
Class
IV-A-1 Certificates and Class IV-A-2 Certificates will bear interest at a
variable Pass-Through Rate equal to the weighted average of the Net Rates of
the
Group IV Mortgage Loans, weighted on the basis of the respective Scheduled
Principal Balances of each such Mortgage Loan as of the beginning of the Due
Period immediately preceding the related Distribution Date; provided that,
for
federal income tax purposes the Class IV-A-1 Certificates and Class IV-A-2
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interests
IV-A-1 and IV-A-2, weighted on the basis of the Uncertificated Principal
Balances of each such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is 6.056% per annum.
(10) The
Class
R-I, Class R-II and Class R-III Certificates will not bear
interest.
(11) The
Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates
will
each bear interest at a variable Pass-Through Rate equal to the weighted average
of the weighted average of the Net Rates of the Mortgage Loans in each Loan
Group, weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of the Mortgage Loans of each Loan Group, the
aggregate Current Principal Amount of the related Class or Classes of Senior
Certificates; provided that, for federal income tax purposes such Certificates
will bear interest at a rate equivalent to the foregoing, expressed as the
weighted average of the Pass-Through Rates on REMIC II Regular Interests ▇-▇,
▇-▇, ▇-▇, ▇-▇, B-5 and B-6, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC II Regular Interest immediately preceding
the related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is 5.970% per annum.
(d) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution Date immediately following the maturity date for the Mortgage
Loan
with the latest maturity date in the Trust Fund has been designated as the
“latest possible maturity date” for the REMIC I Regular Interests, the REMIC II
Regular Interests and the Certificates (other than the Class R
Certificates).
(e) With
respect to each Distribution Date, each Class of Certificates shall accrue
interest during the related Interest Accrual Period. With respect to each
Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount (or Notional Amount in the
case
of the Interest Only Certificates) of such Class applicable to such Distribution
Date.
(f) The
Certificates shall be substantially in the forms set forth in Exhibits ▇-▇,
▇-▇
and A-3. On original issuance, the Certificate Registrar shall sign, countersign
and shall deliver them at the direction of the Depositor. Pending the
preparation of definitive Certificates of any Class, the Certificate Registrar
may sign and countersign temporary Certificates that are printed, lithographed
or typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which
they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. 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 of the Certificate Registrar, without charge to
the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Certificate Registrar shall sign and countersign and deliver
in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each
Class of Book-Entry Certificates will be registered as a single Certificate
of
such Class held by a nominee of the Depository or the DTC Custodian, and
beneficial interests will be held by investors through the book-entry facilities
of the Depository in minimum denominations of, in the case of the Offered
Certificates (other than the Residual Certificates), $100,000 and in each case
increments of $1.00 in excess thereof, except that one Certificate of each
such
Class may be issued in a different amount so that the sum of the denominations
of all outstanding Certificates of such Class shall equal the Current Principal
Amount of such Class on the Closing Date. On the Closing Date, the Certificate
Registrar shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Current Principal Amount of
such
Class on the Closing Date. The Private Certificates shall be issued in
certificated fully-registered form in minimum dollar denominations of $100,000
and integral multiples of $1.00 in excess thereof, except that one Private
Certificate of each Class may be issued in a different amount so that the sum
of
the denominations of all outstanding Private Certificates of such Class shall
equal the Current Principal Amount of such Class on the Closing Date. The
Residual Certificates shall each be issued in certificated fully-registered
form, each, in the denomination of $50. Each Class of Global Certificates,
if
any, shall be issued in fully registered form in minimum dollar denominations
of
$100,000 and integral multiples of $1.00 in excess thereof, except that one
Certificate of each Class may be in a different denomination so that the sum
of
the denominations of all outstanding Certificates of such Class shall equal
the
Current Principal Amount of such Class on the Closing Date. On the Closing
Date,
the Certificate Registrar shall execute and countersign (i) in the case of
each
Class of Offered Certificates, the Certificate in the entire Current Principal
Amount of the respective Class and (ii) in the case of each Class of Private
Certificates, Individual Certificates all in an aggregate principal amount
that
shall equal the Current Principal Amount of each such respective Class on the
Closing Date. The Certificates referred to in clause (i) and if at any time
there are to be Global Certificates, the Global Certificates shall be delivered
by the Depositor to the Depository or pursuant to the Depository’s instructions,
shall be delivered by the Depositor on behalf of the Depository to and deposited
with the DTC Custodian. The Certificate Registrar shall sign the Certificates
by
facsimile or manual signature and countersign them by manual signature on behalf
of the Trustee by one or more authorized signatories, each of whom shall be
Responsible Officers of the Certificate Registrar or its agent. A Certificate
bearing the manual and facsimile signatures of individuals who were the
authorized signatories of the Certificate Registrar or its agent at the time
of
issuance shall bind the Certificate Registrar, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the manually executed
countersignature of the Certificate Registrar or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the
only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date.
All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The
Closing Date is hereby designated as the “startup” day of each REMIC within the
meaning of Section 860G(a)(9) of the Code.
(j) For
federal income tax purposes, each REMIC shall have a tax year that is a calendar
year and shall report income on an accrual basis.
(k) The
Trustee on behalf of the Trust shall cause each REMIC to timely elect to be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of any Trust established
hereby shall be resolved in a manner that preserves the validity of such
elections.
(l) The
following legend shall be placed on the Residual Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class
in
exchange therefor or upon transfer thereof:
THIS
CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR WITH AN OPINION OF COUNSEL
ADDRESSED TO THE DEPOSITOR, TRUSTEE, CERTIFICATE REGISTRAR, MASTER SERVICER
AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO
THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON
WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS
PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, CERTIFICATE REGISTRAR OR THE TRUSTEE.
The
following legend shall be placed upon the Private Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class
in
exchange therefor or upon transfer thereof:
THIS
CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE
CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED
TO, PROHIBITED TRANSACTION EXEMPTION (“PTE”) 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇
95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS
ON
THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE CERTIFICATE
REGISTRAR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED
BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE
OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
Section
5.02 Registration
of Transfer and Exchange of Certificates.
(a) The
Certificate Registrar shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Certificate Registrar shall provide for the registration of Certificates
and
of transfers and exchanges of Certificates as herein provided.
(b) Subject
to Subsection 5.01(a) and, in the case of any Global Certificate or Physical
Certificate upon the satisfaction of the conditions set forth below, upon
surrender for registration of transfer of any Certificate at any office or
agency of the Certificate Registrar maintained for such purpose, the Certificate
Registrar shall sign, countersign and shall deliver, in the name of the
designated transferee or transferees, a new Certificate of a like Class and
aggregate Fractional Undivided Interest, but bearing a different
number.
(c) By
acceptance of an Individual 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 in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in
the
form of an Individual Certificate:
(i) The
Certificate Registrar shall register the transfer of an Individual Certificate
if the requested transfer is being made to a transferee who has provided the
Certificate Registrar with a Rule 144A Certificate or comparable evidence as
to
its QIB status.
(ii) The
Certificate Registrar shall register the transfer of any Individual Certificate
if (x) the transferor has advised the Certificate Registrar in writing that
the
Certificate is being transferred to an Institutional Accredited Investor; and
(y) prior to the transfer the transferee furnishes to the Certificate Registrar
an Investment Letter (and the Certificate Registrar shall be fully protected
in
so doing), provided that, if based upon an Opinion of Counsel addressed to
the
Certificate Registrar to the effect that the delivery of (x) and (y) above
are
not sufficient to confirm that the proposed transfer is being made pursuant
to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable laws, the Certificate
Registrar shall as a condition of the registration of any such transfer require
the transferor to furnish such other certifications, legal opinions or other
information prior to registering the transfer of an Individual Certificate
as
shall be set forth in such Opinion of Counsel.
(d) Subject
to Subsection 5.02(h), so long as a Global Certificate of such Class is
outstanding and is held by or on behalf of the Depository, transfers of
beneficial interests in such Global Certificate, or transfers by holders of
Individual Certificates of such Class to transferees that take delivery in
the
form of beneficial interests in the Global Certificate, may be made only in
accordance with this Subsection 5.02(d) and in accordance with the rules of
the
Depository:
(i) In
the
case of a beneficial interest in the Global Certificate being transferred to
an
Institutional Accredited Investor, such transferee shall be required to take
delivery in the form of an Individual Certificate or Certificates and the
Certificate Registrar shall register such transfer only upon compliance with
the
provisions of Subsection 5.02(c)(ii).
(ii) In
the
case of a beneficial interest in a Class of Global Certificates being
transferred to a transferee that takes delivery in the form of an Individual
Certificate or Certificates of such Class, except as set forth in clause (i)
above, the Certificate Registrar shall register such transfer only upon
compliance with the provisions of Subsection 5.02(c)(i).
(iii) In
the
case of an Individual Certificate of a Class being transferred to a transferee
that takes delivery in the form of a beneficial interest in a Global Certificate
of such Class, the Certificate Registrar shall register such transfer if the
transferee has provided the Certificate Registrar with a Rule 144A Certificate
or comparable evidence as to its QIB status.
(iv) No
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in the Global Certificate of a Class to a
transferee that takes delivery in the form of a beneficial interest in the
Global Certificate of such Class; provided that each such transferee shall
be
deemed to have made such representations and warranties contained in the Rule
144A Certificate as are sufficient to establish that it is a QIB.
(e) Subject
to Subsection 5.02(h), an exchange of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate or Certificates of such
Class, an exchange of an Individual Certificate or Certificates of a Class
for a
beneficial interest in the Global Certificate of such Class and an exchange
of
an Individual Certificate or Certificates of a Class for another Individual
Certificate or Certificates of such Class (in each case, whether or not such
exchange is made in anticipation of subsequent transfer, and, in the case of
the
Global Certificate of such Class, so long as such Certificate is outstanding
and
is held by or on behalf of the Depository) may be made only in accordance with
this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A
holder
of a beneficial interest in a Global Certificate of a Class may at any time
exchange such beneficial interest for an Individual Certificate or Certificates
of such Class.
(ii) A
holder
of an Individual Certificate or Certificates of a Class may exchange such
Certificate or Certificates for a beneficial interest in the Global Certificate
of such Class if such holder furnishes to the Certificate Registrar a Rule
144A
Certificate or comparable evidence as to its QIB status.
(iii) A
holder
of an Individual Certificate of a Class may exchange such Certificate for an
equal aggregate principal amount of Individual Certificates of such Class in
different authorized denominations without any certification.
(f) (i)Upon
acceptance for exchange or transfer of an Individual Certificate of a Class
for
a beneficial interest in a Global Certificate of such Class as provided herein,
the Trustee shall cancel such Individual Certificate and shall (or shall request
the Depository to) endorse on the schedule affixed to the applicable Global
Certificate (or on a continuation of such schedule affixed to the Global
Certificate and made a part thereof) or otherwise make in its books and records
an appropriate notation evidencing the date of such exchange or transfer and
an
increase in the certificate balance of the Global Certificate equal to the
certificate balance of such Individual Certificate exchanged or transferred
therefor.
(ii) Upon
acceptance for exchange or transfer of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate of such Class as provided
herein, the Certificate Registrar shall (or shall request the Depository to)
endorse on the schedule affixed to such Global Certificate (or on a continuation
of such schedule affixed to such Global Certificate and made a part thereof)
or
otherwise make in its books and records an appropriate notation evidencing
the
date of such exchange or transfer and a decrease in the certificate balance
of
such Global Certificate equal to the certificate balance of such Individual
Certificate issued in exchange therefor or upon transfer thereof.
(g) The
Securities Legend shall be placed on any Individual Certificate issued in
exchange for or upon transfer of another Individual Certificate or of a
beneficial interest in a Global Certificate.
(h) Subject
to the restrictions on transfer and exchange set forth in this Section 5.02,
the
holder of any Individual Certificate may transfer or exchange the same in whole
or in part (in an initial certificate balance equal to the minimum authorized
denomination set forth in Section 5.01(g) above or any integral multiple of
$1.00 in excess thereof) by surrendering such Certificate at the Certificate
Registrar Office, or at the office of any transfer agent, together with an
executed instrument of assignment and transfer satisfactory in form and
substance to the Certificate Registrar in the case of transfer and a written
request for exchange in the case of exchange. The holder of a beneficial
interest in a Global Certificate may, subject to the rules and procedures of
the
Depository, cause the Depository (or its nominee) to notify the Certificate
Registrar in writing of a request for transfer or exchange of such beneficial
interest for an Individual Certificate or Certificates. Following a proper
request for transfer or exchange, the Certificate Registrar shall, within five
Business Days of such request made at the Corporate Trust Office, sign,
countersign and deliver at the Corporate Trust Office, to the transferee (in
the
case of transfer) or holder (in the case of exchange) or send by first class
mail at the risk of the transferee (in the case of transfer) or holder (in
the
case of exchange) to such address as the transferee or holder, as applicable,
may request, an Individual Certificate or Certificates, as the case may require,
for a like aggregate Fractional Undivided Interest and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at
the
Corporate Trust Office by the registered holder in person, or by a duly
authorized attorney-in-fact.
(i) At
the
option of the Certificateholders, Certificates may be exchanged for other
Certificates of authorized denominations of a like Class and aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office; provided, however, that no Certificate
may be exchanged for new Certificates unless the original Fractional Undivided
Interest represented by each such new Certificate (i) is at least equal to
the
minimum authorized denomination or (ii) is acceptable to the Depositor as
indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Certificate Registrar shall sign and countersign
and the Certificate Registrar shall deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) If
the
Certificate Registrar so requires, every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer, with a signature guarantee, in form satisfactory
to the Certificate Registrar, duly executed by the holder thereof or his or
her
attorney duly authorized in writing.
(k) No
service charge shall be made for any transfer or 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 transfer
or exchange of Certificates.
(l) The
Certificate Registrar shall cancel all Certificates surrendered for transfer
or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section
5.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
(a) If
(i)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Certificate
Registrar such security or indemnity as it may require to save it harmless,
and
(iii) the Certificate Registrar has not received notice that such Certificate
has been acquired by a third Person, the Certificate Registrar shall sign,
countersign and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
Fractional Undivided Interest but in each case bearing a different number.
The
mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled
of
record by the Certificate Registrar and shall be of no further effect and
evidence no rights.
(b) Upon
the
issuance of any new Certificate under this Section 5.03, 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 Certificate Registrar)
connected therewith. Any duplicate Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section
5.04 Persons
Deemed Owners.
Prior
to
due presentation of a Certificate for registration of transfer, the Depositor,
the Paying Agent, the Certificate Registrar, the Trustee and any agent of the
Depositor, the Paying Agent, the Certificate Registrar or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section
6.01
and for all other purposes whatsoever. Neither the Depositor, the Paying Agent,
the Certificate Registrar, the Trustee nor any agent of the Depositor, the
Paying Agent, the Certificate Registrar, or the Trustee shall be affected by
notice to the contrary. No Certificate shall be deemed duly presented for a
transfer effective on any Record Date unless the Certificate to be transferred
is presented no later than the close of business on the third Business Day
preceding such Record Date.
Section
5.05 Transfer
Restrictions on Residual Certificates.
(a) Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Depositor. As a
prerequisite to such consent, (1) the proposed transferee must provide the
Tax
Matters Person, the Depositor, the Certificate Registrar and the Trustee with
an
affidavit that the proposed transferee is a Permitted Transferee (and an
affidavit that it is a United States Person), and (2) the proposed transferor
must provide the Tax Matters Person, the Depositor, the Certificate Registrar
and the Trustee with a certificate to the effect that it has no knowledge that
the statements made by the proposed transferee in any such affidavit are false,
each as provided in Subsection 5.05(b).
(b) No
transfer, sale or other disposition of a Residual Certificate (including a
beneficial interest therein) may be made unless, prior to the transfer, sale
or
other disposition of a Residual Certificate, (1) the proposed transferee
(including the initial purchasers thereof) delivers to the Tax Matters Person,
the Trustee, the Certificate Registrar and the Depositor an affidavit in the
form attached hereto as Exhibit E stating, among other things, that as of the
date of such transfer (i) such transferee is a Permitted Transferee and that
(ii) such transferee is not acquiring such Residual Certificate for the account
of any Person who is not a Permitted Transferee, and (2) the proposed transferor
delivers to the Tax Matters Person, the Trustee, the Certificate Registrar
and
the Depositor a certificate to the effect that it has no knowledge that the
statements made by
the
proposed transferee in
any
such affidavit are false. The Tax Matters Person shall not consent to a transfer
of a Residual Certificate if it has actual knowledge that any statement made
in
the affidavit issued pursuant to the preceding sentence is not true.
Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer,
sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate
was
not in fact permitted by this Subsection 5.05(b), be restored to all rights
as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Certificate Registrar, the Tax Matters Person or the Depositor
shall be under any liability to any Person for any registration or transfer
of a
Residual Certificate that is not permitted by this Subsection 5.05(b) or for
making payments due on such Residual Certificate to the purported Holder thereof
or taking any other action with respect to such purported Holder under the
provisions of this Agreement so long as the written affidavit referred to above
was received with respect to such transfer, and the Tax Matters Person, the
Trustee, the Certificate Registrar and the Depositor, as applicable, had no
knowledge that it was untrue. The prior Holder shall be entitled to recover
from
any purported Holder of a Residual Certificate that was in fact not a permitted
transferee under this Subsection 5.05(b) at the time it became a Holder all
payments made on such Residual Certificate. Each Holder of a Residual
Certificate, by acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this Subsection 5.05(b) and to any amendment
of
this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Depositor to ensure
that
the Residual Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Residual Certificates will
not cause the imposition of a tax upon the Trust or cause any REMIC to fail
to
qualify as a REMIC.
(c) The
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any Person who is not a United States
Person.
(d) By
accepting a Residual Certificate, the purchaser thereof agrees to be a Tax
Matters Person, and appoints the Securities Administrator to act as its agent
with respect to all matters concerning the tax obligations of the
Trust.
Section
5.06 Restrictions
on Transferability of Certificates.
(a) No
offer,
sale, transfer or other disposition (including pledge) of any Certificate shall
be made by any Holder thereof unless registered under the Securities Act, or
an
exemption from the registration requirements of the Securities Act and any
applicable state securities or “Blue Sky” laws is available and the prospective
transferee (other than the Depositor) of such Certificate signs and delivers
to
the Certificate
Registrar
an
Investment Letter, if the transferee is an Institutional Accredited Investor,
in
the form set forth as Exhibit F-l hereto, or a Rule 144A Certificate, if the
transferee is a QIB, in the form set forth as Exhibit F-2 hereto.
Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that
it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Certificate Registrar may require an Opinion of Counsel
addressed to the Certificate Registrar that such transaction is exempt from
the
registration requirements of the Securities Act. The cost of such opinion shall
not be an expense of the Trustee or the Trust Fund.
(b) The
Private Certificates shall each bear a Securities Legend.
Section
5.07 ERISA
Restrictions.
(a) Subject
to the provisions of subsection (b), no Residual Certificates or Private
Certificates may be acquired directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA or Section 4975 of the Code, unless the proposed transferee provides
either (i) the Trustee or the Securities Administrator, with an Opinion of
Counsel addressed to the Depositor, the Trustee, the Certificate Registrar,
the
Master Servicer and the Securities Administrator (upon which they may rely)
which is satisfactory to the Trustee or the Securities Administrator, which
opinion will not be at the expense of the Depositor, the Trustee, the
Certificate Registrar, the Master Servicer or the Securities Administrator,
that
the purchase of such Certificates by or on behalf of such Plan is permissible
under applicable law, will not constitute or result in a nonexempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Certificate Registrar, the Securities
Administrator or the Trustee to any obligation in addition to those undertaken
in the Agreement or (ii) in the case of the Private Certificates, a
representation or certification to the Certificate Registrar (upon which the
Trustee and the Certificate Registrar are authorized to rely) to the effect
that
the proposed transfer and holding of such a Certificate and the servicing,
management and operation of the Trust: (I) will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code which is
not
covered under an individual or class prohibited transaction exemption including
but not limited to Department of Labor Prohibited Transaction Exemption (“PTE”)
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Depositor, the Securities Administrator, the Master Servicer or
the
Trustee to any obligation in addition to those undertaken in the
Agreement.
(b) Any
Person acquiring an interest in a Global Certificate which is a Private
Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that either: (i) it is not acquiring an interest
in
such Certificate directly or indirectly by, or on behalf of, an employee benefit
plan or other retirement arrangement which is subject to Title I of ERISA or
Section 4975 of the Code, or (ii) the transfer and holding of an interest in
such Certificate to that Person and the subsequent servicing, management and
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇,
▇▇▇
▇▇-▇, ▇▇▇ 95-60 or PTE 96-23 and (II) will not subject the Depositor, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.
(c) Each
beneficial owner of a Class B-1, Class B-2 or Class B-3 Certificate or any
interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that certificate or interest therein, that either
(i)
it is not a Plan or investing with “Plan Assets”, (ii) it has acquired and is
holding such certificate in reliance on Prohibited Transaction Exemption 90-30,
as amended from time to time (the “Exemption”), and that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
“BBB-” (or its equivalent) by S&P or Fitch, and the certificate is so rated
or (iii) (1) it is an insurance company, (2) the source of funds used to acquire
or hold the certificate or interest therein is an “insurance company general
account,” as such term is defined in Prohibited Transaction Class Exemption
(“PTCE”) 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
(d) Neither
the Trustee, the Certificate Registrar, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation
of
such provisions, shall indemnify and hold harmless the Trustee, the Certificate
Registrar, the Securities Administrator and the Master Servicer from and against
any and all liabilities, claims, costs or expenses incurred by the Trustee,
the
Certificate Registrar, the Securities Administrator or the Master Servicer
as a
result of such attempted or purported transfer. Neither the Trustee, nor the
Certificate Registrar shall be liable for transfer of any such Global
Certificates in or through book-entry facilities of any Depository or between
or
among Depository Participants or Certificate Owners made in violation of the
transfer restrictions set forth herein.
Section
5.08 Rule
144A
Information.
For
so
long as any Certificates are outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) of the Securities Act, (1) the Depositor will
provide or cause to be provided to any holder of such Certificates and any
prospective purchaser thereof designated by such a holder, upon the request
of
such holder or prospective purchaser, the information required to be provided
to
such holder or prospective purchaser by Rule 144A(d)(4) under the Securities
Act; and (2) the Depositor shall update such information from time to time
in
order to prevent such information from becoming false and misleading and will
take such other actions as are necessary to ensure that the safe harbor
exemption from the registration requirements of the Securities Act under Rule
144A is and will be available for resales of such Certificates conducted in
accordance with Rule 144A.
Section
5.09 Appointment
of Paying Agent and Certificate Registrar.
▇▇▇▇▇
Fargo Bank, National Association, as Securities Administrator, shall act as
the
initial Paying Agent and Certificate Registrar for so long as it is also the
Master Servicer. Each of the Paying Agent and the Certificate Registrar may
resign upon thirty (30) days’ prior written notice to the Trustee; provided
hereto that no such resignation shall be effective until the appointment of
a
successor paying agent or certificate registrar. In the event the Paying Agent
and/or the Certificate Registrar resigns or is removed by the Trustee for cause,
the Trustee may appoint a successor paying agent or certificate registrar,
as
applicable. The Trustee shall cause such successor paying agent, if other than
the Trustee or the Master Servicer or 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 Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums have been paid to the
Certificateholders.
ARTICLE
VI
PAYMENTS
TO CERTIFICATEHOLDERS
Section
6.01 Distributions
on the Certificates.
(a) Interest
and principal (as applicable) on the Certificates (other than the Residual
Certificates) will be distributed monthly on each Distribution Date, commencing
in June 2006, in an amount equal to the Available Funds on deposit in the
Distribution Account for such Distribution Date. In addition, on the
Distribution Date occurring in June 2006, the Class R-1 Deposit will be
distributed to the Holders of the Class R-I Certificates, the Class R-2 Deposit
will be distributed to the Holders of the Class R-II Certificates and the Class
R-3 Deposit will be distributed to the Holders of the Class R-III Certificates.
On each Distribution Date, the Available Funds on deposit in the Distribution
Account shall be distributed as follows:
(i) on
each
Distribution Date, the Group I Available Funds will be distributed to the Group
I Senior Certificates as follows:
first,
to the
Class I-A-1 Certificates and Class I-A-2 Certificates, on a pro rata basis,
the
Accrued Certificate Interest on such Classes for such Distribution Date. As
described below, accrued interest on the Class I-A-1 Certificates and Class
I-A-2 Certificates is subject to reduction in the event of certain Net Interest
Shortfalls allocable thereto;
second,
to the
Class I-A-1 Certificates and Class I-A-2 Certificates, on a pro rata basis,
any
Accrued Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group I Available Funds;
and
third,
to the
Class I-A-1 Certificates and Class 1-A-2 Certificates, on a pro rata basis,
in
reduction of the Current Principal Amount thereof, the Group I Senior Optimal
Principal Amount for such Distribution Date to the extent of remaining Group
I
Available Funds, until the Current Principal Amounts of such Classes have been
reduced to zero.
(ii) on
each
Distribution Date, the Group II Available Funds will be distributed to the
Group
II Senior Certificates as follows:
first,
to the
Class II-A-1, Class II-A-2 and Class II-X Certificates, on a pro rata basis,
the
Accrued Certificate Interest on such Class for such Distribution Date. As
described below, accrued interest on the Class II-A-1, Class II-A-2 and Class
II-X Certificates is subject to reduction in the event of certain Net Interest
Shortfalls allocable thereto;
second,
to the
Class II-A-1, Class II-A-2 and Class II-X Certificates, on a pro rata basis,
any
Accrued Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group II Available Funds;
and
third,
to the
Class II-A-1 Certificates and Class II-A-2 Certificates, on a pro rata basis,
in
reduction of the Current Principal Amounts thereof, the Group II Senior Optimal
Principal Amount for such Distribution Date to the extent of remaining Group
II
Available Funds, until the Current Principal Amounts of such Classes have been
reduced to zero.
(iii) on
each
Distribution Date, the Group III Available Funds will be distributed to the
Group III Senior Certificates as follows:
first,
to the
Class III-A-1, Class III-A-2, Class III-A-3 and Class III-X Certificates, on
a
pro rata basis, the Accrued Certificate Interest on such Class for such
Distribution Date. As described below, accrued interest on the Class III-A-1,
Class III-A-2, Class III-A-3 and Class III-X Certificates is subject to
reduction in the event of certain Net Interest Shortfalls allocable
thereto;
second,
to the
Class III-A-1, Class III-A-2, Class III-A-3 and Class III-X Certificates, on
a
pro rata basis, any Accrued Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of remaining Group III Available
Funds; and
third,
to the
Class III-A-1, Class III-A-2 and Class III-A-3 Certificates, on a pro rata
basis, in reduction of the Current Principal Amount thereof, the Group III
Senior Optimal Principal Amount for such Distribution Date to the extent of
remaining Group III Available Funds, until the Current Principal Amounts of
such
Classes have been reduced to zero.
(iv) on
each
Distribution Date, the Group IV Available Funds will be distributed to the
Group
IV Senior Certificates as follows:
first,
to the
Class IV-A-1 Certificates and Class IV-A-2 Certificates, on a pro rata basis,
the Accrued Certificate Interest on such Class for such Distribution Date.
As
described below, accrued interest on the Class IV-A-1 Certificates is subject
to
reduction in the event of certain Net Interest Shortfalls allocable
thereto;
second,
to the
Class IV-A-1 Certificates and Class IV-A-2 Certificates, on a pro rata basis,
any Accrued Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group IV Available Funds;
and
third,
to the
Class IV-A-1 Certificates and Class IV-A-2 Certificates, on a pro rata basis,
in
reduction of the Current Principal Amount thereof, the Group IV Senior Optimal
Principal Amount for such Distribution Date to the extent of remaining Group
IV
Available Funds, until the Current Principal Amounts of such Classes have been
reduced to zero.
(v) Except
as
provided in clauses (vi) and (vii) below, on each Distribution Date on or prior
to the Cross-Over Date, an amount equal to the sum of any remaining Group I,
Group II, Group III and Group IV Available Funds after the distributions in
clauses (i), (ii), (iii) and (iv) above will be distributed sequentially, in
the
following order, to the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates, in each case up to an amount equal to and in the
following order: (A) the Accrued Certificate Interest thereon for such
Distribution Date, (B) any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (C) such Class’s Allocable
Share for such Distribution Date, in each case, to the extent of remaining
Group
I, Group II, Group III and Group IV Available Funds.
(vi) On
each
Distribution Date prior to the Cross-Over Date but after the reduction of the
Current Principal Amount of all of the Senior Certificates of a Certificate
Group to zero, the remaining Class or Classes of Senior Certificates in the
remaining Certificate Groups will be entitled to receive in reduction of their
Current Principal Amounts, pro rata based upon their Current Principal Amounts
immediately prior to such Distribution Date, in addition to any Principal
Prepayments related to such remaining Senior Certificates’ respective Loan Group
allocated to such Senior Certificates, 100% of the Principal Prepayments on
any
Mortgage Loan in the Loan Group relating to the Class or Classes of Senior
Certificates of the fully repaid Certificate Group; provided, however, that
if
(A) the weighted average of the Subordinate Percentages on such Distribution
Date equals or exceeds two times the initial weighted average of the Subordinate
Percentages and (B) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and bankruptcy and Mortgage Loans with respect to which
the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount
of
the Subordinate Certificates does not exceed 50%, then the additional allocation
of Principal Prepayments to the Senior Certificates in accordance with this
clause (vi) will not be made and 100% of the Principal Prepayments on any
Mortgage Loan in the Loan Group relating to the fully repaid Class or Classes
of
Senior Certificates will be allocated to the Subordinate
Certificates.
(vii) If
on any
Distribution Date on which the aggregate Current Principal Amount of the Group
I, Group II, Group III or Group IV Senior Certificates would be greater than
the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Loan
Group and any Subordinate Certificates are still outstanding, in each case
after
giving effect to distributions to be made on such Distribution Date, (A) 100%
of
amounts otherwise allocable to the Subordinate Certificates in respect of
principal will be distributed to the Group I, Group II, Group III or Group
IV
Senior Certificates in reduction of the Current Principal Amounts thereof,
until
the aggregate Current Principal Amount of such Class or Classes of Senior
Certificates is an amount equal to the aggregate Scheduled Principal Balance
of
the Mortgage Loans in the related Loan Group, and (B) the Accrued Certificate
Interest otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and distributed to such Class
or Classes of Senior Certificates in an amount equal to the Accrued Certificate
Interest for such Distribution Date on the excess of (x) the aggregate Current
Principal Amount of such Class or Classes of Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Loan
Group. Any such reduction in the Accrued Certificate Interest on the Subordinate
Certificates will be allocated in reverse order of the Subordinate Certificates
numerical designations, commencing with the Class B-6 Certificates.
(b) If,
after
distributions have been made pursuant to priorities first
and
second
of
clauses (a)(i), (ii), (iii) and (iv) above on any Distribution Date, the
remaining Group I, Group II, Group III or Group IV Available Funds are less
than
the Group I, Group II, Group III and Group IV Senior Optimal Principal Amounts,
respectively, the Senior Optimal Principal Amount for such Loan Group shall
be
reduced, and such remaining Available Funds will be distributed on the related
Senior Certificates, on a pro rata basis, on the basis of such reduced
amount.
(c) On
each
Distribution Date, any Available Funds remaining after payment of interest
and
principal to the Classes of Certificates entitled thereto, as described above,
will be distributed to the Class R-III Certificates; provided that if on any
Distribution Date there are any Group I, Group II, Group III and Group IV
Available Funds remaining after payment of interest and principal to a Class
or
Classes of Certificates entitled thereto, such amounts will be distributed
to
the other Classes of Senior Certificates, pro rata, based upon their Current
Principal Amounts, until all amounts due to all Classes of Senior Certificates
have been paid in full, before any amounts are distributed to the Class R-III
Certificates.
(d) For
any
Distribution Date, “pro rata” distributions among Classes of Certificates in
respect of Accrued Certificate Interest or unpaid Accrued Certificate Interest
will be made in proportion to the amount of Accrued Certificate Interest or
unpaid Accrued Certificate Interest, respectively, due on such Classes for
such
Distribution Date. For any Distribution Date, “pro rata” distributions among
Classes of Certificates in respect of principal will be made in proportion
to
the Current Principal Amount of such Classes immediately prior to such
Distribution Date.
(e) No
Accrued Certificate Interest will be payable with respect to any Class of
Certificates after the Distribution Date on which the Current Principal Amount
of such Certificate has been reduced to zero.
(f) If
on any
Distribution Date the Available Funds for the Senior Certificates in any
Certificate Group is less than the Accrued Certificate Interest on the related
Senior Certificates for such Distribution Date prior to reduction for Net
Interest Shortfalls and the interest portion of Realized Losses, the shortfall
will be allocated among the holders of each Class of Senior Certificates in
such
Certificate Group in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfalls and/or Realized Losses for such Distribution Date. In
addition, the amount of any interest shortfalls will constitute unpaid Accrued
Certificate Interest and will be distributable to holders of the Certificates
of
the related Classes entitled to such amounts on subsequent Distribution Dates,
to the extent of the applicable Available Funds after current interest
distributions as required herein. Any such amounts so carried forward will
not
bear interest. Shortfalls in interest payments will not be offset by a reduction
in the servicing compensation of the Master Servicer or otherwise, except to
the
extent of applicable Compensating Interest Payments.
(g) The
expenses and fees of the Trust shall be paid by each of the REMICs, to the
extent that such expenses relate to the assets of each of such respective
REMICs, and all other expenses and fees of the Trust shall be paid pro rata
by
each of the REMICs.
Section
6.02 Allocation
of Losses.
(a) On
or
prior to each Determination Date, the Master Servicer shall determine the amount
of any Realized Loss in respect of each Mortgage Loan that occurred during
the
immediately preceding calendar month, based on information provided by the
related Servicer.
(b) With
respect to any Certificates on any Distribution Date, the principal portion
of
each Realized Loss on a Mortgage Loan shall be allocated as
follows:
first,
to the
Class B-6 Certificates until the Current Principal Amount thereof has been
reduced to zero;
second,
to the
Class B-5 Certificates until the Current Principal Amount thereof has been
reduced to zero;
third,
to the
Class B-4 Certificates until the Current Principal Amount thereof has been
reduced to zero;
fourth,
to the
Class B-3 Certificates until the Current Principal Amount thereof has been
reduced to zero;
fifth,
to the
Class B-2 Certificates until the Current Principal Amount thereof has been
reduced to zero;
sixth,
to
the
Class B-1 Certificates until the Current Principal Amount thereof has been
reduced to zero;
seventh,
if such
loss is on (v) a Group I Mortgage Loan, to the Class I-A-1 Certificates and
Class I-A-2 Certificates until the Current Principal Amount thereof has been
reduced to zero; provided, however, any such Realized Losses otherwise allocable
to the Class I-A-1 Certificates will be allocated to the Class I-A-2
Certificates, until the Current Principal Amount of the Class I-A-2 Certificates
has been reduced to zero, and then to the Class I-A-1 Certificates; (w) a Group
II Mortgage Loan, to
the
Class II-A-1 Certificates and Class II-A-2 Certificates, until
the
Current Principal Amount thereof has been reduced to zero; provided, however,
any such Realized Losses otherwise allocable to the Class II-A-1 Certificates
will be allocated to the Class II-A-2 Certificates, until the Current Principal
Amount of the Class II-A-2 Certificates has been reduced to zero, and then
to
the Class II-A-1 Certificates; (x) a Group III Mortgage Loan, to the Class
III-A-1, Class III-A-2 and Class III-A-3 Certificates until the Current
Principal Amount thereof has been reduced to zero; provided, however, any such
Realized Losses otherwise allocable to the Class III-A-1 Certificates and Class
III-A-2 Certificates will be allocated to the Class III-A-3 Certificates, until
the Current Principal Amount of the Class III-A-3 Certificates has been reduced
to zero, and then to the Class III-A-1 Certificates and Class III-A-2
Certificates, on a pro rata basis; or (y) a Group IV Mortgage Loan, to the
Class
IV-A-1 Certificates and Class IV-A-2 Certificates until the Current Principal
Amount thereof has been reduced to zero; provided, however, any such Realized
Losses otherwise allocable to the Class IV-A-1 Certificates will be allocated
to
the Class IV-A-2 Certificates, until the Current Principal Amount of the Class
IV-A-2 Certificates has been reduced to zero, and then to the Class IV-A-1
Certificates; and
eighth,
to the
Senior Certificates on a pro rata basis; provided, however, any such Realized
Losses otherwise allocable to the Class I-A-1 Certificates will be allocated
to
the Class I-A-2 Certificates, until the Current Principal Amount of the Class
I-A-2 Certificates has been reduced to zero, and then to the Class I-A-1
Certificates, any such Realized Losses otherwise allocable to the Class II-A-1
Certificates will be allocated to the Class II-A-2 Certificates, until the
Current Principal Amount of the Class II-A-2 Certificates has been reduced
to
zero, and then to the Class II-A-1 Certificates, any such Realized Losses
otherwise allocable to the Class III-A-1 Certificates will be allocated to
the
Class III-A-2 Certificates, until the Current Principal Amount of the Class
III-A-2 Certificates has been reduced to zero, and then to the Class III-A-1
Certificates, any such Realized Losses otherwise allocable and to the Class
IV-A-1 Certificates will be allocated to the Class IV-A-2 Certificates, until
the Current Principal Amount of the Class IV-A-2 Certificates has been reduced
to zero, and then to the Class IV-A-1 Certificates.
(c) Notwithstanding
the foregoing clause (b), no such allocation of any Realized Loss shall be
made
on a Distribution Date to any Class of Certificates to the extent that such
allocation would result in the reduction of the aggregate Current Principal
Amount of all the Certificates (other than the Class R Certificates) as of
such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage
Loans
as of the first day of the month of such Distribution Date (such limitation,
the
“Loss Allocation Limitation”).
(d) Any
Realized Losses allocated to a Class of Certificates shall be allocated among
the Certificates of such Class in proportion to their respective Current
Principal Amounts. Any allocation of Realized Losses shall be accomplished
by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date.
(e) Realized
Losses shall be allocated on the Distribution Date in the month following the
month in which such loss was incurred and, in the case of the principal portion
thereof, after giving effect to distributions made on such Distribution
Date.
(f) On
each
Distribution Date, the Securities Administrator shall determine and notify
the
Paying Agent of the Subordinate Certificate Writedown Amount. Any Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of (i) if prior to the Cross-Over Date, the Current
Principal Amounts of the Subordinate Certificates, in the reverse order of
their
numerical Class designations and (ii) from and after the Cross-Over Date, the
Senior Certificates, in accordance with priorities set forth in clause (b)
above, which reduction shall occur on such Distribution Date after giving effect
to distributions made on such Distribution Date.
(g) Any
Net
Interest Shortfall will be allocated among the Classes of Certificates (other
than the Residual Certificates) in proportion to the respective amounts of
Accrued Certificate Interest that would have been allocated thereto in the
absence of such Net Interest Shortfall for such Distribution Date. The interest
portion of any Realized Losses with respect to the Mortgage Loans occurring
on
or prior to the Cross-Over Date will not be allocated among any Certificates,
but will reduce the amount of Available Funds on the related Distribution Date.
As a result of the subordination of the Subordinate Certificates in right of
distribution, such Realized Losses on the Mortgage Loans will be borne by the
Subordinate Certificates, in inverse order of their numerical Class
designations. Following the Cross-Over Date, the interest portion of Realized
Losses on the Mortgage Loans will be allocated to the Senior Certificates in
the
manner described in the first sentence of this clause (g).
(h) In
addition, in the event that the Master Servicer receives any Subsequent
Recoveries from a Servicer, the Master Servicer shall deposit such funds into
the Distribution Account pursuant to Section 4.04. If, after taking into account
such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount
of such Subsequent Recoveries will be applied to increase the Current Principal
Amount of the Class of Subordinate Certificates with the highest payment
priority to which Realized Losses have been allocated, but not by more than
the
amount of Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 6.02. The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Current
Principal Amount of the Subordinate Certificates, beginning with the Class
of
Subordinate Certificates with the next highest payment priority, up to the
amount of such Realized Losses previously allocated to such Class of
Certificates pursuant to this Section 6.02. Holders of such Certificates will
not be entitled to any payment in respect of current interest on the amount
of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Current Principal Amount of each Subordinate Certificate of such Class in
accordance with its respective Fractional Undivided Interest.
Section
6.03 Payments.
(a) On
each
Distribution Date, other than the final Distribution Date, the Paying Agent
shall distribute to each Certificateholder of record as of the immediately
preceding Record Date the Certificateholder’s pro rata share of its Class (based
on the aggregate Fractional Undivided Interest represented by such Holder’s
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based on information provided to the Paying Agent by the
Securities Administrator. The Securities Administrator shall calculate the
amount to be distributed to each Class and, based on such amounts, the
Securities Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator’s calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. Neither the Securities Administrator
nor
the Paying Agent shall be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such
information.
(b) Payment
of the above amounts to each Certificateholder shall be made (i) by check mailed
to each Certificateholder entitled thereto at the address appearing in the
Certificate Register or (ii) upon receipt by the Paying Agent on or before
the
fifth Business Day preceding the Record Date of written instructions from a
Certificateholder by wire transfer to a United States dollar account maintained
by the payee at any United States depository institution with appropriate
facilities for receiving such a wire transfer; provided, however, that the
final
payment in respect of each Class of Certificates will be made only upon
presentation and surrender of such respective Certificates at the office or
agency of the Paying Agent specified in the notice to Certificateholders of
such
final payment.
Section
6.04 Statements
to Certificateholders.
(a) Concurrently
with each distribution to Certificateholders, the Securities Administrator
shall
make available to the parties hereto and each Certificateholder via the
Securities Administrator’s internet website as set forth below, the following
information, expressed with respect to clauses (i) through (vii) in the
aggregate and as a Fractional Undivided Interest representing an initial Current
Principal Amount of $1,000, or in the case of the Residual Certificates, an
initial Current Principal Amount of $50:
(i) the
Current Principal Amount of each Class of Certificates immediately prior to
such
Distribution Date;
(ii) the
amount of the distribution allocable to principal on each applicable Class
of
Certificates;
(iii) the
aggregate amount of interest accrued at the related Pass-Through Rate with
respect to each Class during the related Interest Accrual Period;
(iv) the
Net
Interest Shortfall and any other adjustments to interest at the related
Pass-Through Rate necessary to account for any difference between interest
accrued and aggregate interest distributed with respect to each Class of
Certificates;
(v) the
amount of the distribution allocable to interest on each Class of
Certificates;
(vi) the
Pass-Through Rates for each Class of Certificates with respect to such
Distribution Date;
(vii) the
Current Principal Amount of each Class of Certificates after such Distribution
Date;
(viii) the
amount of any Monthly Advances, Compensating Interest Payments and outstanding
unreimbursed advances by the Master Servicer or the Servicer included in such
distribution separately stated for each Loan Group;
(ix) the
aggregate amount of any Realized Losses (listed separately for each category
of
Realized Loss and for each Loan Group) during the related Prepayment Period
and
cumulatively since the Cut-off Date and the amount and source (separately
identified) of any distribution in respect thereof included in such
distribution;
(x) with
respect to each Mortgage Loan which incurred a Realized Loss during the related
Prepayment Period, (i) the loan number, (ii) the Scheduled Principal Balance
of
such Mortgage Loan as of the Cut-off Date, (ii) the Scheduled Principal Balance
of such Mortgage Loan as of the beginning of the related Due Period, (iii)
the
Net Liquidation Proceeds with respect to such Mortgage Loan and (iv) the amount
of the Realized Loss with respect to such Mortgage Loan;
(xi) with
respect to each Loan Group, the amount of Scheduled Principal and Principal
Prepayments, (including but separately identifying the principal amount of
Principal Prepayments, Insurance Proceeds, the purchase price in connection
with
the purchase of Mortgage Loans, cash deposits in connection with substitutions
of Mortgage Loans and Net Liquidation Proceeds) and the number and principal
balance of Mortgage Loans purchased or substituted for during the relevant
period and cumulatively since the Cut-off Date;
(xii) the
number of Mortgage Loans (excluding REO Property) in each Loan Group remaining
in the Trust Fund as of the end of the related Prepayment Period;
(xiii) information
for each Loan Group and in the aggregate regarding any Mortgage Loan
delinquencies as of the end of the related Prepayment Period, including the
aggregate number and aggregate Outstanding Principal Balance of Mortgage Loans
using the MBA method of calculation (a) Delinquent 30 to 59 days on a
contractual basis, (b) Delinquent 60 to 89 days on a contractual basis, and
(c)
Delinquent 90 or more days on a contractual basis, in each case as of the close
of business on the last Business Day of the immediately preceding
month;
(xiv) for
each
Loan Group, the number of Mortgage Loans in the foreclosure process as of the
end of the related Due Period and the aggregate Outstanding Principal Balance
of
such Mortgage Loans;
(xv) for
each
Loan Group, the number and aggregate Outstanding Principal Balance of all
Mortgage Loans as to which the Mortgaged Property was REO Property as of the
end
of the related Due Period;
(xvi) the
book
value (the sum of (A) the Outstanding Principal Balance of the Mortgage Loan,
(B) accrued interest through the date of foreclosure and (C) foreclosure
expenses) of any REO Property in each Loan Group; provided that, in the event
that such information is not available to the Securities Administrator on the
Distribution Date, such information shall be furnished promptly after it becomes
available;
(xvii) the
amount of Realized Losses allocated to each Class of Certificates since the
prior Distribution Date and in the aggregate for all prior Distribution Dates;
and
(xviii) the
Average Loss Severity Percentage for each Loan Group; and
(xix) the
then
applicable Group I, Group II, Group III and Group IV Senior Percentage, Group
I,
Group II, Group III and Group IV Senior Prepayment Percentage, Group I, Group
II, Group III and Group IV Subordinate Percentage and Group I, Group II, Group
III and Group IV Subordinate Prepayment Percentage.
The
information set forth above shall be calculated or reported, as the case may
be,
by the Securities Administrator, based solely on, and to the extent of,
information provided to the Securities Administrator by the Master Servicer.
The
Securities Administrator may conclusively rely on such information and shall
not
be required to confirm, verify or recalculate any such information.
The
Securities Administrator may make available each month, to any interested party,
the monthly statement to Certificateholders via the Securities Administrator’s
website initially located at “▇▇▇.▇▇▇▇▇▇▇.▇▇▇.” Assistance in using the website
can be obtained by calling the Securities Administrator’s customer service desk
at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above distribution option
are entitled to have a paper copy mailed to them via first class mail by calling
the Securities Administrator’s customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such reports
are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Securities Administrator shall provide timely
and adequate notification to all parties regarding any such change.
(b) By
April
30 of each year beginning in 2007, the Securities Administrator will furnish
such report to each Holder of the Certificates of record at any time during
the
prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine to be
necessary and/or to be required by the Internal Revenue Service or by a federal
or state law or rules or regulations to enable such Holders to prepare their
tax
returns for such calendar year. Such obligations shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Securities Administrator or the Trustee pursuant to the
requirements of the Code.
Section
6.05 Monthly
Advances.
The
Master Servicer shall cause the related Servicer to remit any Advance required
pursuant to the terms of the related Servicing Agreement. The related Servicer
shall be obligated to make any such Advance only to the extent that such advance
would not be a Nonrecoverable Advance. If the related Servicer shall have
determined that it has made a Nonrecoverable Advance or that a proposed Advance
or a lesser portion of such Advance would constitute a Nonrecoverable Advance,
the related Servicer shall deliver (i) to the Securities Administrator for
the
benefit of the Certificateholders funds constituting the remaining portion
of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer,
each Rating Agency and the Trustee an Officer’s Certificate setting forth the
basis for such determination. Subject
to the Master Servicer’s recoverability determination, in the event that a
Servicer (other than ▇▇▇▇▇ Fargo) fails to make a required Advance, the Master
Servicer, as successor servicer, shall be required to remit the amount of such
Advance to the Distribution Account. Subject to the Securities Administrator’s
recoverability determination, in the event that the Master Servicer fails to
make a required Advance, the Securities Administrator shall be required to
remit
the amount of such Advance to the Distribution Account. If
▇▇▇▇▇
Fargo, as a Servicer, the Master Servicer or the Securities Administrator was
required to make an Advance but failed to do so, the Trustee upon receiving
notice or becoming aware of such failure, and pursuant to the applicable terms
of this Agreement, shall appoint a successor servicer who will make such
Advance, or the Trustee as successor master servicer shall be
required to remit the amount of such Advance to the Distribution Account,
unless
the Trustee shall have determined that such Advance is a Nonrecoverable Advance.
If the Trustee cannot find a successor servicer to replace ▇▇▇▇▇ Fargo as
Servicer the Trustee shall become the successor servicer and shall be required
to remit the amount of such Advance to the Distribution Account, unless the
Trustee shall have determined that such Advance is a Nonrecoverable
Advance.
Section
6.06 Compensating
Interest Payments.
The
Master Servicer shall remit to the Securities Administrator for deposit in
the
Distribution Account not later than each Business Day preceding the related
Distribution Date an amount equal to the lesser of (i) the sum of the aggregate
amounts required to be paid by the Servicers under the Servicing Agreements
with
respect to subclauses (a) and (b) of the definition of Interest Shortfall with
respect to the Mortgage Loans for the related Distribution Date, and not so
paid
by the related Servicers and (ii) the Master Servicer Compensation for such
Distribution Date (such amount, the “Compensating Interest Payment”). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment.
ARTICLE
VII
THE
MASTER SERVICER
Section
7.01 Liabilities
of the Master Servicer.
The
Master Servicer shall be liable in accordance herewith only to the extent of
the
obligations specifically imposed upon and undertaken by it herein.
Section
7.02 Merger
or
Consolidation of the Master Servicer.
(a) The
Master Servicer will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation,
and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any
Person into which the Master Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or further act on the part of
any
of the parties hereto, anything herein to the contrary
notwithstanding.
Section
7.03 Indemnification
of the Trustee, the Master Servicer and the Securities
Administrator.
(a) The
Master Servicer agrees to indemnify the Indemnified Persons for, and to hold
them harmless against, any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or relating to, any claim or
legal
action (including any pending or threatened claim or legal action) relating
to
this Agreement, the Servicing Agreements, the Assignment Agreements or the
Certificates or the powers of attorney delivered by the Trustee hereunder (i)
related to the Master Servicer’s failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason
of
the Master Servicer’s willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties hereunder, provided, in each case, that with respect
to
any such claim or legal action (or pending or threatened claim or legal action),
the Trustee shall have given the Master Servicer and the Depositor written
notice thereof promptly after a responsible officer the Trustee shall have
with
respect to such claim or legal action actual knowledge thereof. The Master
Servicer’s failure to receive any such notice shall not affect the Trustee’s
right to indemnification hereunder, except to the extent the Master Servicer
is
materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or
the
Securities Administrator and the termination of this Agreement.
(b) The
Depositor will indemnify any Indemnified Person for any loss, liability or
expense of any Indemnified Person not otherwise covered by the Master Servicer’s
indemnification pursuant to Subsection (a) above.
Section
7.04 Limitations
on Liability of the Master Servicer and Others.
Subject
to the obligation of the Master Servicer to indemnify the Indemnified Persons
pursuant to Section 7.03:
(a) Neither
the Master Servicer nor any of the directors, officers, employees or agents
of
the Master Servicer shall be under any liability to the Indemnified Persons,
the
Depositor, the Trust Fund or the Certificateholders for taking any action or
for
refraining from taking any action in good faith pursuant to this Agreement,
or
for errors in judgment; provided, however, that this provision shall not protect
the Master Servicer or any such Person against any breach of warranties or
representations made herein or any liability which would otherwise be imposed
by
reason of such Person’s willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and
duties hereunder.
(b) The
Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising
hereunder.
(c) The
Master Servicer, the Custodian and any director, officer, employee or agent
of
the Master Servicer or the Custodian, shall be indemnified by the 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 Certificates or any Servicing Agreement (except to the
extent that the Master Servicer or the Trustee, as the case may be, is
indemnified by the Servicer thereunder), other than (i) any such loss, liability
or expense related to the Master Servicer's failure to perform its duties in
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason
of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or
gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations
and
duties hereunder or under the Custodial Agreement, as applicable.
(d) The
Master Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties under this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, the Master Servicer may in its discretion, with the consent
of the Trustee (which consent shall not be unreasonably withheld), undertake
any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests
of
the Certificateholders hereunder. In such event, the legal expenses and costs
of
such action and any liability resulting therefrom shall be expenses, costs
and
liabilities of the Trust Fund, and the Master Servicer shall be entitled to
be
reimbursed therefor out of the Distribution Account as provided by Section
4.05.
Nothing in this Subsection 7.04(d) shall affect the Master Servicer’s obligation
to supervise, or to take such actions as are necessary to ensure, the servicing
and administration of the Mortgage Loans pursuant to Subsection
3.01(a).
(e) In
taking
or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Master Servicer
shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course
of
action by reason of the condition of the Mortgaged Properties but shall give
notice to the Trustee if it has notice of such potential
liabilities.
(f) The
Master Servicer shall not be liable for any acts or omissions of any Servicers,
except as otherwise expressly provided herein.
Section
7.05 Master
Servicer Not to Resign.
Except
as
provided in Section 7.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except upon a determination that
any
such duties hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective
until
EMC or the Trustee or a successor to the Master Servicer reasonably satisfactory
to the Trustee shall have assumed the responsibilities and obligations of the
Master Servicer in accordance with Section 8.02 hereof. The Trustee shall notify
the Rating Agencies of the resignation of the Master Servicer.
Section
7.06 Successor
Master Servicer.
In
connection with the appointment of any successor master servicer or the
assumption of the duties of the Master Servicer, EMC or the Trustee may make
such arrangements for the compensation of such successor master servicer out
of
payments on the Mortgage Loans as EMC or the Trustee and such successor master
servicer shall agree. If the successor master servicer does not agree that
such
market value is a fair price, such successor master servicer shall obtain two
quotations of market value from third parties actively engaged in the servicing
of single-family mortgage loans. Notwithstanding the foregoing, the compensation
payable to a successor master servicer may not exceed the compensation which
the
Master Servicer would have been entitled to retain if the Master Servicer had
continued to act as Master Servicer hereunder.
Section
7.07 Sale
and
Assignment of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement and EMC
may
terminate the Master Servicer without cause and select a new Master Servicer;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net
worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of
the
due and punctual performance and observance of each covenant and condition
to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
each Rating Agency shall be given prior written notice of the identity of the
proposed successor to the Master Servicer and each Rating Agency’s rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Trustee; (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer’s Certificate and
an Opinion of Independent Counsel addressed to the Trustee, each stating that
all conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this Agreement;
and (iv) in the event the Master Servicer is terminated without cause by EMC,
EMC shall pay the terminated Master Servicer a termination fee equal to 0.25%
of
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time
the
master servicing of the Mortgage Loans is transferred to the successor Master
Servicer. No such assignment or delegation shall affect any liability of the
Master Servicer arising prior to the effective date thereof.
ARTICLE
VIII
DEFAULT
Section
8.01 Events
of
Default.
“Event
of
Default,” wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and only with respect to the defaulting
Master Servicer:
(i) any
failure by the Master Servicer to remit to the Securities Administrator any
amounts received or collected by the Master Servicer in respect of the Mortgage
Loans and required to be remitted by it (other than any Monthly Advance)
pursuant to this Agreement, which failure shall continue unremedied for one
Business Day after the date on which written notice of such failure shall have
been given to the Master Servicer by the Trustee or the Depositor, or to the
Trustee and the Master Servicer by the Holders of Certificates evidencing not
less than 25% of the Voting Rights evidenced by the Certificates;
or
(ii) The
Master Servicer fails to observe or perform in any material respect any other
material covenants and agreements set forth in this Agreement to be performed
by
it, which covenants and agreements materially affect the rights of
Certificateholders, and such failure continues unremedied for a period of 60
days after the date on which written notice of such failure, properly requiring
the same to be remedied, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and the Trustee by the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of
the
Trust Fund; or
(iii) There
is
entered against the Master Servicer a decree or order by a court or agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the winding
up or liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or an
involuntary case is commenced against the Master Servicer under any applicable
insolvency or reorganization statute and the petition is not dismissed within
60
days after the commencement of the case; or
(iv) The
Master Servicer consents to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or
substantially all of its property; or the Master Servicer admits in writing
its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes
an
assignment for the benefit of its creditors, or voluntarily suspends payment
of
its obligations;
(v) The
Master Servicer assigns or delegates its duties or rights under this Agreement
in contravention of the provisions permitting such assignment or delegation
under Sections 7.05 or 7.07; or
(vi) The
Master Servicer fails to deposit, or cause to be deposited, in the Distribution
Account any Monthly Advance required to be made by the Master Servicer (other
than a Nonrecoverable Advance) by the close of business on the Business Day
prior to the related Distribution Date.
In
each
and every such case, so long as such Event of Default with respect to the Master
Servicer shall not have been remedied, either the Trustee or the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than
51% of the principal of the Trust Fund, by notice in writing to the Master
Servicer (and to the Trustee if given by such Certificateholders), with a copy
to the Rating Agencies, and with the consent of EMC, may terminate all of the
rights and obligations (but not the liabilities) of the Master Servicer under
this Agreement and in and to the Mortgage Loans and/or the REO Property serviced
by the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates, the Mortgage
Loans, REO Property or under any other related agreements (but only to the
extent that such other agreements relate to the Mortgage Loans or related REO
Property) shall, subject to Section 8.02, automatically and without further
action pass to and be vested in the Trustee pursuant to this Section 8.01;
and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, whether to complete the transfer and endorsement or assignment
of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer’s rights and obligations hereunder, including, without limitation, the
transfer to the Trustee of (i) the property and amounts which are then or should
be part of the Trust or which thereafter become part of the Trust; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer’s duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled
to
receive, out of any amount received on account of a Mortgage Loan or related
REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall
not
affect any obligations incurred by the Master Servicer prior to such
termination. The Securities Administrator shall promptly notify the Trustee
in
writing of the occurrence of an Event of Default under clauses (i) or (vii)
above.
Notwithstanding
the foregoing, if an Event of Default described in clause (vi) of this Section
8.01 shall occur and the Securities Administrator fails to make such Advance
described in clause (vi) of Section 8.01, the Trustee upon receiving notice
or
becoming aware of such failure, and pursuant to the applicable terms of this
Agreement, shall, by notice in writing to the Master Servicer, which may be
delivered by telecopy, immediately terminate all of the rights and obligations
of the Master Servicer thereafter arising under this Agreement, but without
prejudice to any rights it may have as a Certificateholder or to reimbursement
of Monthly Advances and other advances of its own funds, and the Trustee shall
act as provided in Section 8.02 to carry out the duties of the Master Servicer,
including the obligation to make any Monthly Advance the nonpayment of which
was
an Event of Default described in clause (vi) of this Section 8.01. Any such
action taken by the Trustee must be prior to the distribution on the relevant
Distribution Date.
Section
8.02 Trustee
to Act; Appointment of Successor.
(a) Upon
the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties
to a
Person which is legally able to act, the Trustee shall automatically become
the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter have all of the rights and powers of, and be subject to all the
responsibilities, duties, liabilities and limitations on liabilities relating
thereto placed on the Master Servicer by the terms and provisions hereof;
provided, however, that the Trustee shall have no obligation whatsoever with
respect to any liability (other than advances deemed recoverable and not
previously made) incurred by the Master Servicer at or prior to the time of
termination. As compensation therefor, but subject to Section 7.06, the Trustee
shall be entitled to compensation which the Master Servicer would have been
entitled to retain if the Master Servicer had continued to act hereunder, except
for those amounts due the Master Servicer as reimbursement permitted under
this
Agreement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to
act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a ▇▇▇▇▇▇ ▇▇▇- or ▇▇▇▇▇▇▇ Mac-approved servicer, and with
respect to a successor to the Master Servicer only, having a net worth of not
less than $10,000,000, as the successor to the Master Servicer hereunder in
the
assumption of all or any part of the responsibilities, duties or liabilities
of
the Master Servicer hereunder; provided, that the Trustee shall obtain a letter
from each Rating Agency that the ratings, if any, on each of the Certificates
will not be lowered as a result of the selection of the successor to the Master
Servicer. Pending appointment of a successor to the Master Servicer hereunder,
the Trustee shall act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements
for
the compensation of such successor out of payments on the Mortgage Loans as
it
and such successor shall agree; provided, however, that the provisions of
Section 7.06 shall apply, the compensation shall not be in excess of that which
the Master Servicer would have been entitled to if the Master Servicer had
continued to act hereunder, and that such successor shall undertake and assume
the obligations of the Trustee to pay compensation to any third Person acting
as
an agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate
any
such succession.
(b) If
the
Trustee shall succeed to any duties of the Master Servicer respecting the
Mortgage Loans as provided herein, it shall do so in a separate capacity and
not
in its capacity as Trustee and, accordingly, the provisions of Article IX shall
be inapplicable to the Trustee in its duties as the successor to the Master
Servicer in the servicing of the Mortgage Loans (although such provisions shall
continue to apply to the Trustee in its capacity as Trustee); the provisions
of
Article VII, however, shall apply to it in its capacity as successor master
servicer.
Section
8.03 Notification
to Certificateholders.
Upon
any
termination or appointment of a successor to the Master Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to the Rating
Agencies.
Section
8.04 Waiver
of
Defaults.
The
Trustee shall transmit by mail to all Certificateholders, within 60 days after
the occurrence of any Event of Default actually known to a Responsible Officer
of the Trustee, unless such Event of Default shall have been cured, notice
of
each such Event of Default. The Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund may, on
behalf of all Certificateholders, waive any default by the Master Servicer
in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made any required
distribution on the Certificates, which default may only be waived by Holders
of
Certificates evidencing Fractional Undivided Interests aggregating 100% of
the
Trust Fund. Upon any such waiver of a past default, such default shall be deemed
to cease to exist, and any Event of Default arising therefrom shall be deemed
to
have been timely remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived. The Trustee shall give notice
of any such waiver to the Rating Agencies.
Section
8.05 List
of
Certificateholders.
Upon
written request of three or more Certificateholders of record, for purposes
of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.
ARTICLE
IX
CONCERNING
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section
9.01 Duties
of
Trustee.
(a) The
Trustee, prior to the occurrence of an Event of Default and after the curing
or
waiver of all Events of Default which may have occurred, and the Securities
Administrator each undertake to perform such duties and only such duties as
are
specifically set forth in this Agreement as duties of the Trustee and the
Securities Administrator, respectively. If an Event of Default has occurred
and
has not been cured or waived, the Trustee shall exercise such of the rights
and
powers vested in it by this Agreement, and subject to Section 8.02(b) use the
same degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of his own affairs.
(b) Upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments which are specifically required to be
furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor
the
Securities Administrator shall be responsible for the accuracy or content of
any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished hereunder; provided, further, that neither the Trustee
nor
the Securities Administrator shall be responsible for the accuracy or
verification of any calculation provided to it pursuant to this
Agreement.
(c) On
each
Distribution Date, the Paying Agent shall make monthly distributions and the
final distribution to the Certificateholders from funds in the Distribution
Account as provided in Sections 6.01 and 10.01 herein based solely on the report
of the Securities Administrator.
(d) No
provision of this Agreement shall be construed to relieve the Trustee or the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior
to
the occurrence of an Event of Default, and after the curing or waiver of all
such Events of Default which may have occurred, the duties and obligations
of
the Trustee and the Securities Administrator shall be determined solely by
the
express provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable except for the performance of their respective
duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against
the
Trustee or the Securities Administrator and, in the absence of bad faith on
the
part of the Trustee or the Securities Administrator, respectively, the Trustee
or the Securities Administrator, respectively, may conclusively rely, as to
the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, and conforming to the requirements of this
Agreement;
(ii) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity for an error of judgment made in good faith by a Responsible Officer
or
Responsible Officers of the Trustee or an officer of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or
the
Securities Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither
the Trustee nor the Securities Administrator shall be liable with respect to
any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the directions of the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund, if such
action or non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power conferred
upon the Trustee or the Securities Administrator, respectively, under this
Agreement;
(iv) The
Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any default or Event of Default unless a Responsible Officer of
the
Trustee’s Corporate Trust Office shall have actual knowledge thereof. In the
absence of such notice, the Trustee may conclusively assume there is no such
default or Event of Default;
(v) The
Trustee shall not in any way be liable by reason of any insufficiency in any
Account held by or in the name of Trustee unless it is determined by a court
of
competent jurisdiction that the Trustee’s gross negligence or willful misconduct
was the primary cause of such insufficiency (except to the extent that the
Trustee is obligor and has defaulted thereon);
(vi) Anything
in this Agreement to the contrary notwithstanding, in no event shall the Trustee
or the Securities Administrator be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator, respectively,
has
been advised of the likelihood of such loss or damage and regardless of the
form
of action;
(vii) None
of
the Securities Administrator, the Depositor or the Trustee shall be responsible
for the acts or omissions of the other, it being understood that this Agreement
shall not be construed to render them partners, joint venturers or agents of
one
another and
(viii) Neither
the Trustee nor the Securities Administrator shall be required to expend or
risk
its own funds or otherwise incur financial liability in the performance of
any
of its duties hereunder, or in the exercise of any of its rights or powers,
if
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer under the Servicing Agreements, except during such time, if
any,
as the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Master Servicer in accordance with the terms
of
this Agreement.
(e) All
funds
received by the Master Servicer and the Trustee and required to be deposited
in
the Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Trustee.
(f) Except
for those actions that the Trustee or the Securities Administrator is required
to take hereunder, neither the Trustee nor the Securities Administrator shall
have any obligation or liability to take any action or to refrain from taking
any action hereunder in the absence of written direction as provided
hereunder.
Section
9.02 Certain
Matters Affecting the Trustee and the Securities Administrator.
Except
as
otherwise provided in Section 9.01:
(i) The
Trustee and the Securities Administrator may rely and shall be protected in
acting or refraining from acting in reliance on any resolution, certificate
of
the Depositor, the Master Servicer or a Servicer, certificate of auditors or
any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The
Trustee and the Securities Administrator may consult with counsel and any advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel:
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement, other
than
its obligation to give notices pursuant to this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby. Nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence
of an
Event of Default of which a Responsible Officer of the Trustee has actual
knowledge (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of care
and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs;
(iv) Prior
to
the occurrence of an Event of Default hereunder and after the curing or waiver
of all Events of Default which may have occurred, neither the Trustee nor the
Securities Administrator shall be liable in its individual capacity for any
action taken, suffered or omitted by it in good faith and believed by it to
be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(v) Neither
the Trustee nor the Securities Administrator shall be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do
so
by Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust Fund and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as applicable,
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, reasonably assured to the Trustee or the
Securities Administrator, as applicable, by the security afforded to it by
the
terms of this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall be
paid
by the Certificateholders requesting the investigation;
(vi) The
Trustee and the Securities Administrator may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through Affiliates,
agents or attorneys; provided, however, that the Trustee may not appoint any
agent to perform its custodial functions with respect to the Mortgage Files
or
Trustee functions under this Agreement without the express written consent
of
the Master Servicer, which consent will not be unreasonably withheld. Neither
the Trustee nor the Securities Administrator shall be liable or responsible
for
the misconduct or negligence of any of the Trustee’s or the Securities
Administrator’s agents or attorneys or a custodian or Trustee appointed
hereunder by the Trustee or the Securities Administrator with due care and,
when
required, with the consent of the Master Servicer;
(vii) Should
the Trustee or the Securities Administrator deem the nature of any action
required on its part, other than a payment or transfer under Subsection 4.01(b)
or Section 4.02, to be unclear, the Trustee or the Securities Administrator,
respectively, may require prior to such action that it be provided by the
Depositor with reasonable further instructions;
(viii) The
right
of the Trustee or the Securities Administrator to perform any discretionary
act
enumerated in this Agreement shall not be construed as a duty, and neither
the
Trustee nor the Securities Administrator shall be accountable for other than
its
negligence or willful misconduct in the performance of any such
act;
(ix) Neither
the Trustee nor the Securities Administrator shall be required to give any
bond
or surety with respect to the execution of the trust created hereby or the
powers granted hereunder, except as provided in Subsection 9.07;
and
(x) Neither
the Trustee nor the Securities Administrator shall have any duty to conduct
any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by the Seller pursuant to this Agreement or
the
Mortgage Loan Purchase Agreement, as applicable, or the eligibility of any
Mortgage Loan for purposes of this Agreement.
Section
9.03 Trustee
and Securities Administrator Not Liable for Certificates or Mortgage
Loans.
The
recitals contained herein and in the Certificates (other than the signature
and
countersignature of the Certificate Registrar on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee, or the
Custodian on its behalf, nor the Securities Administrator shall have any
responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of
the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee, or the Custodian on its behalf, of the obligation
to review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee’s
signature and countersignature (or countersignature of its agent) on the
Certificates shall be solely in its capacity as Trustee and shall not constitute
the Certificates an obligation of the Trustee in any other capacity. Neither
the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds
of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document
or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or
the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability
to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have
any
responsibility for filing any financing statement or continuation statement
in
any public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.
Section
9.04 Trustee
and Securities Administrator May Own Certificates.
The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of
any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section
9.05 Trustee’s
and Securities Administrator’s Fees and Expenses.
The
fees
and expenses of the Trustee and the Securities Administrator shall be paid
in
accordance with a side letter agreement between the Trustee and the Master
Servicer. In addition, the Trustee and the Securities Administrator will be
entitled to recover from the Distribution Account pursuant to Section
4.05(a)(ii) all reasonable out-of-pocket expenses, disbursements and advances
and the expenses of the Trustee and the Securities Administrator, respectively,
in connection with any Event of Default, any breach of this Agreement or any
claim or legal action (including any pending or threatened claim or legal
action) or incurred or made by the Trustee or the Securities Administrator,
respectively, in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except
any
such expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the Certificateholders.
If funds in the Distribution Account are insufficient therefor, the Trustee
and
the Securities Administrator shall recover such expenses from the Depositor
and
the Depositor hereby agrees to pay such expenses, disbursements or advances
upon
demand. Such compensation and reimbursement obligation shall not be limited
by
any provision of law in regard to the compensation of a trustee of an express
trust.
Section
9.06 Eligibility
Requirements for Trustee, Paying Agent and Securities
Administrator.
The
Trustee and any successor Trustee, Paying Agent and any successor Paying Agent
and the Securities Administrator and any successor Securities Administrator
shall during the entire duration of this Agreement be a state bank or trust
company or a national banking association organized and doing business under
the
laws of such state or the United States of America, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus and
undivided profits of at least $40,000,000 or, in the case of a successor
Trustee, $50,000,000, subject to supervision or examination by federal or state
authority and, in the case of the Trustee, rated “BBB” or higher by S&P with
respect to their long-term rating and rated “BBB” or higher by S&P and
“Baa2” or higher by ▇▇▇▇▇’▇ with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee, successor Paying
Agent or successor Securities Administrator other than pursuant to Section
9.10,
rated in one of the two highest long-term debt categories of, or otherwise
acceptable to, each of the Rating Agencies. If the Trustee publishes reports
of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee, the Paying Agent or the Securities Administrator shall cease to
be
eligible in accordance with the provisions of this Section 9.06, the Trustee
or
the Securities Administrator shall resign immediately in the manner and with
the
effect specified in Section 9.08.
Section
9.07 Insurance.
The
Trustee, Paying Agent and the Securities Administrator, at their own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a “Financial Institution Bond” and/or a
“Bankers’ Blanket Bond”). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee,
the
Paying Agent or the Securities Administrator as to the Trustee’s, Paying Agent’s
or the Securities Administrator’s, respectively, compliance with this Section
9.07 shall be furnished to any Certificateholder upon reasonable written
request.
Section
9.08 Resignation
and Removal of the Trustee and Securities Administrator.
(a) The
Trustee and the Securities Administrator may at any time resign and be
discharged from the Trust hereby created by giving written notice thereof to
the
Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint
a
successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the successor Trustee or Securities Administrator, as applicable.
If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice
of
resignation, the resigning Trustee or Securities Administrator may petition
any
court of competent jurisdiction for the appointment of a successor Trustee
or
Securities Administrator.
(b) If
at any
time the Trustee, the Paying Agent or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall
fail
to resign after written request therefor by the Depositor or if at any time
the
Trustee, the Paying Agent or the Securities Administrator shall become incapable
of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee, the Paying Agent or the Securities Administrator, as applicable, or
of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee, the Paying Agent or the Securities Administrator, as
applicable, or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor shall promptly remove the
Trustee, or shall be entitled to remove the Paying Agent or the Securities
Administrator, as applicable, and appoint a successor Trustee, Paying Agent
or
Securities Administrator, as applicable, by written instrument, in triplicate,
one copy of which instrument shall be delivered to each of the Trustee, the
Paying Agent or Securities Administrator, as applicable, so removed, the
successor Trustee or Securities Administrator, as applicable.
(c) The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may at any time remove the Trustee, the
Paying Agent or the Securities Administrator and appoint a successor Trustee,
the Paying Agent or Securities Administrator by written instrument or
instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
the
Depositor, the Paying Agent, the Master Servicer, the Securities Administrator
(if the Trustee is removed), the Trustee (if the Securities Administrator or
Paying Agent is removed), and the Trustee, the Paying Agent or Securities
Administrator so removed and the successor so appointed. In the event that
the
Trustee, the Paying Agent or Securities Administrator is removed by the Holders
of Certificates in accordance with this Section 9.08(c), the Holders of such
Certificates shall be responsible for paying any compensation payable to a
successor Trustee, successor Paying Agent or successor Securities Administrator,
in excess of the amount paid to the predecessor Trustee, predecessor Paying
Agent or predecessor Securities Administrator, as applicable.
(d) No
resignation or removal of the Trustee, the Paying Agent or the Securities
Administrator and appointment of a successor Trustee, the Paying Agent or
Securities Administrator pursuant to any of the provisions of this Section
9.08
shall become effective except upon appointment of and acceptance of such
appointment by the successor Trustee, Paying Agent or Securities Administrator
as provided in Section 9.09.
Section
9.09 Successor
Trustee, Successor Paying Agent and Successor Securities
Administrator.
(a) Any
successor Trustee, Paying Agent or Securities Administrator appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Depositor
and to its predecessor Trustee, Paying Agent or Securities Administrator an
instrument accepting such appointment hereunder. The resignation or removal
of
the predecessor Trustee, Paying Agent or Securities Administrator shall then
become effective and such successor Trustee, Paying Agent or Securities
Administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee, Paying Agent
or
Securities Administrator herein. The predecessor Trustee, Paying Agent or
Securities Administrator shall after payment of its outstanding fees and
expenses promptly deliver to the successor Trustee, Paying Agent or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee, Paying Agent or
Securities Administrator, as applicable, shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee, Paying
Agent or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No
successor Trustee, Paying Agent or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee, Paying Agent or Securities Administrator
shall be eligible under the provisions of Section 9.06.
(c) Upon
acceptance of appointment by a successor trustee, paying agent or securities
administrator as provided in this Section 9.09, the successor trustee, paying
agent or securities administrator shall mail notice of the succession of such
trustee, paying agent or securities administrator hereunder to all
Certificateholders at their addresses as shown in the Certificate Register
and
to the Rating Agencies. The Depositor shall cause such notice to be mailed
at
the expense of the Trust Fund.
Section
9.10 Merger
or
Consolidation of Trustee, Paying Agent or Securities Administrator.
Any
state
bank or trust company or national banking association into which the Trustee,
Paying Agent or the Securities Administrator may be merged or converted or
with
which it may be consolidated or any state bank or trust company or national
banking association resulting from any merger, conversion or consolidation
to
which the Trustee or the Securities Administrator, respectively, shall be a
party, or any state bank or trust company or national banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee, Paying Agent or the Securities Administrator, respectively, shall
be
the successor of the Trustee, Paying Agent or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06.
Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section
9.11 Appointment
of Co-Trustee or Separate Trustee.
(a) Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust or property
constituting the same may at the time be located, the Depositor and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee and the
Depositor to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and
to
vest in such Person or Persons, in such capacity, such title to the Trust,
or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Depositor and the
Trustee may consider necessary or desirable.
(b) If
the
Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a written request so to do, the Trustee shall have the power
to
make such appointment without the Depositor.
(c) No
co-trustee or separate trustee hereunder shall be required to meet the terms
of
eligibility as a successor Trustee under Section 9.06 hereunder and no notice
to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 9.08 hereof.
(d) In
the
case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee and required to be conferred on such co-trustee shall be
conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly, except to the extent that under any
law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts,
in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust or any portion thereof in any such jurisdiction) shall
be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
(e) Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this Article
IX.
Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as
may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To
the
extent not prohibited by law, any separate trustee or co-trustee may, at any
time, request the Trustee, its agent or attorney-in-fact, with full power and
authority, to do any lawful act under or with respect to this Agreement on
its
behalf and in its name. If any separate trustee or co-trustee shall die, become
incapable of acting, resign or be removed, all of its estates, properties
rights, remedies and trusts shall vest in and be exercised by the Trustee,
to
the extent permitted by law, without the appointment of a new or successor
Trustee.
(g) No
trustee under this Agreement shall be personally liable by reason of any act
or
omission of another trustee under this Agreement. The Depositor and the Trustee
acting jointly may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Section
9.12 Federal
Information Returns and Reports to Certificateholders; REMIC
Administration.
(a) For
federal income tax purposes, the taxable year of each REMIC shall be a calendar
year, and the Securities Administrator shall maintain or cause the maintenance
of the books of each such REMIC on the accrual method of
accounting.
(b) The
Securities Administrator shall prepare and file or cause to be filed with the
Internal Revenue Service, and the Trustee shall sign, federal tax information
returns or elections required to be made hereunder with respect to each REMIC,
the Trust Fund, if applicable, and the Certificates containing such information
and at the times and in the manner as may be required by the Code or applicable
Treasury regulations, and shall furnish to each Holder of Certificates at any
time during the calendar year for which such returns or reports are made such
statements or information at the times and in the manner as may be required
thereby, including, without limitation, reports relating to interest, original
issue discount and market discount or premium (using a constant prepayment
assumption of 25% CPR). The Securities Administrator will apply for an Employee
Identification Number from the Internal Revenue Service under Form SS-4 or
any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, Internal Revenue Service Form 8811, which shall provide the name
and
address of the person who can be contacted to obtain information required to
be
reported to the holders of regular interests in each REMIC (the “REMIC Reporting
Agent”). The Trustee shall make elections to treat each REMIC as a REMIC (which
elections shall apply to the taxable period ending December 31, 2006 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator.
The
Trustee shall sign all tax information returns filed pursuant to this Section
and any other returns as may be required by the Code. The Holder of the Class
R-I Certificate is hereby designated as the “Tax Matters Person” (within the
meaning of Treasury Regulation Section 1.860F-4(d)) for REMIC I, the Holder
of
the Class R-II Certificate is hereby designated as the “Tax Matters Person” for
REMIC II, and the Holder of the Class R-III Certificate is hereby designated
as
the “Tax Matters Person” for REMIC III . The Securities Administrator is hereby
designated and appointed as the agent of each such Tax Matters Person. Any
Holder of a Residual Certificate will by acceptance thereof appoint the
Securities Administrator as agent and attorney-in-fact for the purpose of acting
as Tax Matters Person for each REMIC during such time as the Securities
Administrator does not own any such Residual Certificate. In the event that
the
Code or applicable Treasury regulations prohibit the Trustee from signing tax
or
information returns or other statements, or the Securities Administrator from
acting as agent for the Tax Matters Person, the Trustee and the Securities
Administrator shall take whatever action that in its sole good faith judgment
is
necessary for the proper filing of such information returns or for the provision
of a Tax Matters Person, including designation of the Holder of a Residual
Certificate to sign such returns or act as Tax Matters Person. Each Holder
of a
Residual Certificate shall be bound by this Section.
(c) The
Securities Administrator shall provide upon request and receipt of reasonable
compensation, such information as required in Section 860D(a)(6)(B) of the
Code
to the Internal Revenue Service, to any Person purporting to transfer a Residual
Certificate to a Person other than a transferee permitted by Section 5.05(b),
and to any regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate, organization described in Section 1381
of the Code, or nominee holding an interest in a pass-through entity described
in Section 860E(e)(6) of the Code, any record holder of which is not a
transferee permitted by Section 5.05(b) (or which is deemed by statute to be
an
entity with a disqualified member).
(d) The
Securities Administrator shall prepare and file or cause to be filed, and the
Trustee shall sign, any state income tax returns required under Applicable
State
Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding
any other provision of this Agreement, the Trustee and the Securities
Administrator shall comply with all federal withholding requirements respecting
payments to Certificateholders of, or in respect of, interest or original issue
discount on the Mortgage Loans that the Trustee or the Securities Administrator
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event
the
Trustee or the Securities Administrator withholds any amount from payments
of,
or in respect of, interest or original issue discount or advances thereof to
any
Certificateholder pursuant to federal withholding requirements, the Trustee
or
the Securities Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(f) The
Trustee and the Securities Administrator agree to indemnify the Trust Fund
and
the Depositor for any taxes and costs including, without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee’s
covenants and the Securities Administrator’s covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several, and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this
Agreement.
ARTICLE
X
TERMINATION
Section
10.01 Termination
Upon Repurchase by the Depositor or its Designee or Liquidation of the Mortgage
Loans.
(a) Subject
to Section 10.02, the respective obligations and responsibilities of the
Depositor, the Trustee, the Paying Agent, the Master Servicer and the Securities
Administrator created hereby, other than the obligation of the Paying Agent
to
make payments to Certificateholders as hereinafter set forth shall terminate
upon:
(i) the
repurchase by or at the direction of the Depositor or its designee of all of
the
Mortgage Loans and all related REO Property remaining in the Trust at a price
(in each case, the “Termination Purchase Price”) equal to the sum of (a) 100% of
the Outstanding Principal Balance of each Mortgage Loan (other than a Mortgage
Loan related to REO Property) as of the date of repurchase, net of the principal
portion of any unreimbursed Monthly Advances made by the purchaser, together
with interest at the applicable Mortgage Interest Rate accrued but unpaid to,
but not including, the first day of the month of repurchase, (b) the appraised
value of any related REO Property, less the good faith estimate of the Depositor
of liquidation expenses to be incurred in connection with its disposal thereof
(but not more than the Outstanding Principal Balance of the related Mortgage
Loan, together with interest at the applicable Mortgage Interest Rate accrued
on
that balance but unpaid to, but not including, the first day of the month of
repurchase), such appraisal to be calculated by an appraiser mutually agreed
upon by the Depositor and the Trustee at the expense of the Depositor, (c)
unreimbursed out-of pocket costs of the Master Servicer, including unreimbursed
servicing advances and the principal portion of any unreimbursed Monthly
Advances, made on the Mortgage Loans prior to the exercise of such repurchase
right and (d) any unreimbursed costs and expenses of the Trustee and the
Securities Administrator payable pursuant to Section 9.05; or
(ii) the
later
of the making of the final payment or other liquidation, or any advance with
respect thereto, of the last Mortgage Loan remaining in the Trust Fund or the
disposition of all property acquired with respect to any Mortgage Loan;
provided, however, that in the event that an advance has been made, but not
yet
recovered, at the time of such termination, the Person having made such advance
shall be entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was made;
or
(iii) the
payment to the Certificateholders of all amounts required to be paid to them
pursuant to this Agreement.
(b) In
no
event, however, shall the Trust created hereby continue beyond the earlier
of
(i) the latest possible maturity date specified in Section 5.01(d) and (ii)
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 of this Agreement.
(c) The
right
of the Depositor or its designee to repurchase all the assets of the Trust
Fund
as described in Subsection 10.01(a)(i) above is conditioned upon (i) such
purchase occurring after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
aggregate Scheduled Principal Balance of the Mortgage Loans as of the Cut-off
Date, or (ii) the Depositor making a determination, based upon an Opinion of
Counsel addressed to the Depositor, the Trustee and the Securities
Administrator, that the REMIC status of REMIC I, REMIC II or REMIC III has
been
lost or that a substantial risk exists that such REMIC status will be lost
for
the then-current taxable year. At any time thereafter, in the case of (i) or
(ii) above, the Depositor may elect to terminate REMIC I, REMIC II or REMIC
III
at any time, and upon such election, the Depositor or its designee, shall
repurchase all the assets of the Trust Fund described in Subsection 10.01(a)(i)
above.
(d) The
Paying Agent shall give notice of any termination to the Certificateholders,
with a copy to the Master Servicer, the Securities Administrator, the Trustee
and the Rating Agencies, upon which the Certificateholders shall surrender
their
Certificates to the Paying Agent for payment of the final distribution and
cancellation. Such notice shall be given by letter, mailed not earlier than
the
l5th day and not later than the 25th day of the month next preceding the month
of such final distribution, and shall specify (i) the Distribution Date upon
which final payment of the Certificates will be made upon presentation and
surrender of the Certificates at the office of the Paying Agent therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Paying Agent therein specified.
(e) If
the
option of the Depositor to repurchase or cause the repurchase of all the assets
in the Trust Fund as described in Subsection 10.01(a)(i) above, is exercised,
the Depositor and/or its designee shall deliver to the Paying Agent for deposit
in the Distribution Account, by the Business Day prior to the applicable
Distribution Date, an amount equal to the Termination Purchase Price. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Paying Agent shall distribute to such Certificateholders as directed by the
Securities Administrator in writing an amount determined as follows: with
respect to each Certificate (other than the Class R Certificates), the
outstanding Current Principal Amount, plus with respect to each Certificate
(other than the Class R Certificates), one month’s interest thereon at the
applicable Pass-Through Rate; and with respect to the Class R Certificates,
the
percentage interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Holders of the Certificates in such Certificate Group (other
than the Class R Certificates). If the proceeds with respect to the Mortgage
Loans of a Loan Group are not sufficient to pay all of the Senior Certificates
of the related Certificate Group in full, any such deficiency shall be allocated
first, to the Subordinate Certificates, in inverse order of their numerical
designation and then to the Senior Certificates of the related Certificate
Group
on a pro rata basis. Upon deposit of the Termination Purchase Price and
following such final Distribution Date, the Trustee or the Custodian, as its
agent, shall release promptly to the Depositor and/or its designee the Mortgage
Files for the remaining Mortgage Loans, and the Accounts with respect thereto
shall terminate, subject to the Paying Agent’s obligation to hold any amounts
payable to the Certificateholders in trust without interest pending final
distributions pursuant to Subsection 10.01(g). Any other amounts remaining
in
the Accounts will belong to the Depositor.
(f) Upon
the
presentation and surrender of the Certificates, the Paying Agent shall
distribute to the remaining Certificateholders, pursuant to the written
direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account. Upon deposit by the Master Servicer of such distributable amounts,
and
following such final Distribution Date, the Paying Agent shall release promptly
to the Depositor or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Distribution Account shall terminate, subject to the Paying
Agent’s obligation to hold any amounts payable to the Certificateholders in
trust without interest pending final distributions pursuant to this Subsection
10.01(f).
(g) If
not
all of the Certificateholders shall surrender their Certificates for
cancellation within six months after the time specified in the above-mentioned
written notice, the Paying Agent shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice, not all the Certificates shall have been surrendered
for cancellation, the Paying Agent may take appropriate steps, or appoint any
agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this
Agreement.
Section
10.02 Additional
Termination Requirements.
(a) If
the
option of the Depositor to repurchase all of the Mortgage Loans under Subsection
10.01(a)(i) above is exercised, the Trust Fund and each REMIC shall be
terminated in accordance with the following additional requirements, unless
the
Trustee and Securities Administrator have been furnished with an Opinion of
Counsel addressed to the Trustee and Securities Administrator to the effect
that
the failure of the Trust to comply with the requirements of this Section 10.02
will not (i) result in the imposition of taxes on “prohibited transactions” as
defined in Section 860F of the Code on any REMIC or (ii) cause any REMIC to
fail
to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) within
90
days prior to the final Distribution Date, at the written direction of the
Depositor, the Securities Administrator, as agent for the respective Tax Matters
Persons, shall adopt a plan of complete liquidation of each REMIC, in the case
of a termination under Subsection 10.01(a)(i), provided to it by the Depositor,
which meets the requirements of a “qualified liquidation” under Section 860F of
the Code and any regulations thereunder; and
(ii) the
Depositor shall notify the Trustee at the commencement of such 90-day
liquidation period and, at or prior to the time of making of the final payment
on the Certificates, the Trustee shall sell or otherwise dispose of all of
the
remaining assets of the Trust Fund in accordance with the terms
hereof.
(b) By
their
acceptance of the Residual Certificates, the Holders thereof hereby (i) agree
to
adopt such a plan of complete liquidation of the related REMIC upon the written
request of the Depositor, and to take such action in connection therewith as
may
be reasonably requested by the Depositor, and (ii) appoint the Depositor as
their attorney-in-fact, with full power of substitution, for purposes of
adopting such a plan of complete liquidation. The Securities Administrator
shall
adopt such plan of liquidation by filing the appropriate statement on the final
tax return of each REMIC. Upon complete liquidation or final distribution of
all
of the assets of the Trust Fund, the Trust Fund and each REMIC shall
terminate.
ARTICLE
XI
[RESERVED]
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Intent
of
Parties.
The
parties intend that each of REMIC I, REMIC II and REMIC III shall be treated
as
a REMIC for federal income tax purposes and that the provisions of this
Agreement should be construed in furtherance of this intent.
Section
12.02 Amendment.
(a) This
Agreement 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 Certificateholders, to cure any ambiguity, to correct
or
supplement any provisions herein or therein that may be defective or
inconsistent with any other provisions herein or therein, to comply with any
changes in the Code, to revise any provisions to reflect the obligations of
the
parties to this agreement as they relate to Regulation AB or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Independent
Counsel, addressed to the Trustee, adversely affect in any material respect
the
interests of any Certificateholder.
(b) This
Agreement may also be amended from time to time by the Master Servicer, the
Depositor, the Securities Administrator and the Trustee, with the consent of
the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund or of the applicable Class or Classes,
if
such amendment affects only such Class or Classes, for the purpose of adding
any
provisions to or changing in any manner or eliminating any of the provisions
of
this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to
any
such amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause any REMIC to fail to qualify as a REMIC for federal
income tax purposes, as evidenced by an Opinion of Independent Counsel addressed
to the Trustee and Securities Administrator which shall be provided to the
Trustee and the Securities Administrator other than at the Trustee’s or the
Securities Administrator’s expense. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 12.02(b), Certificates registered in the name of or held for the
benefit of the Depositor, the Securities Administrator, the Master Servicer,
or
the Trustee or any Affiliate thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such
Certificates.
(c) Promptly
after the execution of any such amendment, the Trustee shall furnish a copy
of
such amendment or written notification of the substance of such amendment to
each Certificateholder, with a copy to the Rating Agencies.
(d) In
the
case of an amendment under Subsection 12.02(b) above, it shall not be necessary
for the Certificateholders to approve the particular form of such an amendment.
Rather, it shall be sufficient if the Certificateholders approve the substance
of the amendment. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to
such reasonable regulations as the Trustee may prescribe.
(e) Prior
to
the execution of any amendment to this Agreement, the Trustee shall be entitled
to receive and rely upon an Opinion of Counsel addressed to the Trustee stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee and the Securities Administrator may, but shall not
be
obligated to, enter into any such amendment which affects the Trustee’s or the
Securities Administrator’s own respective rights, duties or immunities under
this Agreement.
Section
12.03 Recordation
of Agreement.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust upon
the request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section
12.04 Limitation
on Rights of Certificateholders.
(a) The
death
or incapacity of any Certificateholder shall not terminate this Agreement or
the
Trust, nor entitle such Certificateholder’s legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except
as
expressly provided in this Agreement, no Certificateholders shall have any
right
to vote or in any manner otherwise control the operation and management of
the
Trust, or the obligations of the parties hereto, nor shall anything herein
set
forth, or contained in the terms of the Certificates, be construed so as to
establish the Certificateholders from time to time as partners or members of
an
association; nor shall any Certificateholders be under any liability to any
third Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No
Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon,
under or with respect to this Agreement against the Depositor, the Securities
Administrator, the Master Servicer or any successor to any such parties unless
(i) such Certificateholder previously shall have given to the Trustee a written
notice of a continuing default, as herein provided, (ii) the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than
51% of the Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs and expenses and liabilities to be incurred therein
or
thereby, and (iii) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any
such action, suit or proceeding.
(d) No
one or
more Certificateholders shall have any right by virtue of any provision of
this
Agreement to affect the rights of any other Certificateholders or to obtain
or
seek to obtain priority or preference over any other such Certificateholder,
or
to enforce any right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all Certificateholders. For
the
protection and enforcement of the provisions of this Section 12.04, each and
every Certificateholder and the Trustee shall be entitled to such relief as
can
be given either at law or in equity.
Section
12.05 Acts
of
Certificateholders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Certificateholders
may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by an agent duly appointed
in writing. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is expressly required, to the Depositor. Proof of
execution of any such instrument or of a writing appointing any such agent
shall
be sufficient for any purpose of this Agreement and conclusive in favor of
the
Trustee and the Depositor, if made in the manner provided in this Section
12.05.
(b) The
fact
and date of the execution by any Person of any such instrument or writing may
be
proved by the affidavit of a witness of such execution or by a certificate
of a
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his or her individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his or her authority.
The
fact and date of the execution of any such instrument or writing, or the
authority of the individual executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The
ownership of Certificates (notwithstanding any notation of ownership or other
writing on such Certificates, except an endorsement in accordance with Section
5.02 made on a Certificate presented in accordance with Section 5.04) shall
be
proved by the Certificate Register, and neither the Trustee, the Securities
Administrator, the Depositor, the Master Servicer nor any successor to any
such
parties shall be affected by any notice to the contrary.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action of the holder of any Certificate shall bind every future holder of the
same Certificate and the holder of every Certificate issued upon the
registration of transfer or exchange thereof, if applicable, or in lieu thereof
with respect to anything done, omitted or suffered to be done by the Trustee,
the Securities Administrator, the Depositor, the Master Servicer or any
successor to any such party in reliance thereon, whether or not notation of
such
action is made upon such Certificates.
(e) In
determining whether the Holders of the requisite percentage of Certificates
evidencing Fractional Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 12.02(b) and except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Certificates which have been pledged in good faith to the Trustee, the
Securities Administrator, the Depositor, the Master Servicer or any Affiliate
thereof may be regarded as outstanding if the pledgor establishes to the
satisfaction of the Trustee the pledgor’s right to act with respect to such
Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, or the Master Servicer, as the case
may
be.
Section
12.06 Governing
Law.
THIS
AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO
EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER)
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
12.07 Notices.
All
demands and notices hereunder shall be in writing and shall be deemed given
when
delivered at (including delivery by facsimile) or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
to (i) in the case of the Depositor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Vice President-Servicing, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇,
or to such other address as may hereafter be furnished to the other parties
hereto in writing; (ii) in the case of the Trustee, at its Corporate Trust
Office, or such other address as may hereafter be furnished to the other parties
hereto in writing; (iii) in the case of the EMC Mortgage Corporation, ▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), attention:
President or General Counsel or such other address as may be hereafter furnished
to the other parties hereto by the Seller in writing, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv)
in
the case of the Master Servicer or Securities Administrator, ▇▇▇▇▇ Fargo Bank,
N.A., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight
deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention:
Corporate Trust Services - BSARM 2006-2), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or
such
other address as may hereafter be furnished to the other parties hereto in
writing; (v) in the case of the Certificate Registrar, the Certificate
Registrar’s Office or (vi) in the case of the Rating Agencies, Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and Standard & Poor’s, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or
such other address as may hereafter be furnished to the other parties hereto
in
writing. Any notice delivered to the Depositor, the Master Servicer, the
Securities Administrator or the Trustee under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder
as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such
notice.
Section
12.08 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severed from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the holders thereof.
Section
12.09 Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the respective successors and assigns of the parties hereto.
Section
12.10 Article
and Section Headings.
The
article and section headings herein are for convenience of reference only,
and
shall not limit or otherwise affect the meaning hereof.
Section
12.11 Counterparts.
This
Agreement may be executed in two or more counterparts each of which when so
executed and delivered shall be an original but all of which together shall
constitute one and the same instrument.
Section
12.12 Notice
to
Rating Agencies.
The
article and section headings herein are for convenience of reference only,
and
shall not limited or otherwise affect the meaning hereof. The Trustee shall
promptly provide notice to each Rating Agency with respect to each of the
following of which a Responsible Officer of the Trustee has actual
knowledge:
1. Any
material change or amendment to this Agreement or the Servicing
Agreements;
2. The
occurrence of any Event of Default that has not been cured;
3. The
resignation or termination of the Master Servicer, the Trustee or the Securities
Administrator;
4. The
repurchase or substitution of Mortgage Loans;
5. The
final
payment to Certificateholders; and
6. Any
change in the location of the Distribution Account.
IN
WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above
written.
|
STRUCTURED
ASSET MORTGAGE
INVESTMENTS
II INC., as Depositor
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
|
|
||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice
President
|
||
|
U.S.
BANK NATIONAL ASSOCIATION, as
Trustee
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
|
|
||
|
Name:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice
President
|
||
|
▇▇▇▇▇
FARGO BANK, N.A., as Master
Servicer
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
|
||
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice
President
|
||
|
▇▇▇▇▇
FARGO BANK, N.A., as Securities
Administrator
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
|
||
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice
President
|
||
|
EMC
MORTGAGE CORPORATION
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
|
||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Titel: Executive Vice
President
|
||
Accepted
and Agreed as to
Sections
2.01, 2.02, 2.03, 2.04 and 9.09(c)
in
its
capacity as Seller
EMC
MORTGAGE CORPORATION
| By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ | |||
|
|
|||
|
Name:
▇▇▇
▇▇▇▇▇▇▇▇
Title:
Executive
Vice President
|
STATE
OF
NEW
YORK )
)
ss.:
|
COUNTY
OF NEW YORK
|
)
|
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared ___________________________, known to me to be a Vice President of
Structured Asset Mortgage Investments II Inc., the corporation that executed
the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MASSACHUSETTS
|
)
|
)
ss.:
COUNTY
OF
SUFFOLK )
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared _________________________, known to me to be a Vice President of U.S.
Bank National Association, the entity that executed the within instrument,
and
also known to me to be the person who executed it on behalf of said entity,
and
acknowledged to me that such entity executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day
and
year
in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MARYLAND
|
)
|
)
ss.:
COUNTY
OF ▇▇▇▇▇▇
)
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared ________________________, known to me to be a Vice President of ▇▇▇▇▇
Fargo Bank, N.A., the entity that executed the within instrument, and also
known
to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day
and
year
in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MARYLAND
|
)
|
)
ss.:
COUNTY
OF ▇▇▇▇▇▇
)
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared _____________________________, known to me to be a(n)
_____________________of ▇▇▇▇▇ Fargo Bank, N.A., the entity that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
STATE
OF
TEXAS
)
)
ss.:
|
COUNTY
OF DALLAS
|
)
|
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared ______________________, known to me to be a Senior Vice President
of
EMC Mortgage Corporation, the corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
STATE
OF
TEXAS
)
)
ss.:
|
COUNTY
OF DALLAS
|
)
|
On
the
24th
day of
August, 2006 before me, a notary public in and for said State, personally
appeared ________________________, known to me to be a Senior Vice President
of
EMC Mortgage Corporation, the corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
EXHIBIT
A-1
FORM
OF CLASS [-A-] [X-] CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE “CODE”).
[FOR
THE CLASS -A-] [THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE
HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED
HEREIN.]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE SECURITIES ADMINISTRATOR OR ITS AGENT FOR REGISTRATION
OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL BE REGISTERED
IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL BE MADE
TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
|
Certificate
No. 1
|
[Variable]
Pass-Through Rate
|
|
Class
[_]-[_-[A]-_] [X-] Senior
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: May 1, 2006
|
Aggregate
Initial [Current Principal] [Notional] Amount of this Senior Certificate
as of the Cut-off Date: $[_____________]
|
|
First
Distribution Date:
June
26, 2006
|
Initial
[Current Principal] [Notional] Amount of this Senior Certificate
as of the
Cut-off Date: $[_____________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, N.A.
|
CUSIP:
[____________]
|
|
Assumed
Final Distribution Date:
July
25, 2036
|
|
BEAR
▇▇▇▇▇▇▇ ARM TRUST 2006-2
MORTGAGE
PASS-THROUGH CERTIFICATE
SERIES
2006-2
evidencing
a fractional undivided interest in the distributions allocable to the Class
[_]-[_-[A]-_] Certificates with respect to a Trust Fund consisting primarily
of
a pool of adjustable rate mortgage loans secured by first liens on one-to-four
family residential properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS
II
INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does
not
represent an obligation of or interest in Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their affiliates or any other person. Neither
this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Structured Asset Mortgage Investments II Inc.,
the
Master Servicer, Securities Administrator or the Trustee or any of their
affiliates or any other person. None of Structured Asset Mortgage Investments
II
Inc., the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable
from
payments on the Certificates.
This
certifies that Cede & Co. is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust Fund”)
primarily consisting of adjustable rate mortgage loans secured by first liens
on
one- to four- family residential properties (collectively, the “Mortgage Loans”)
sold by Structured Asset Mortgage Investments II Inc. (“▇▇▇▇ ▇▇”). The Mortgage
Loans were sold by EMC Mortgage Corporation (“EMC”) to ▇▇▇▇ ▇▇. ▇▇▇▇▇ Fargo
Bank, N.A. (“▇▇▇▇▇ Fargo”) will act as master servicer and as securities
administrator of the Mortgage Loans (the “Master Servicer” and the “Securities
Administrator”, which terms include any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among ▇▇▇▇ ▇▇, as depositor (the “Depositor”), ▇▇▇▇▇ Fargo, as
Master Servicer and securities administrator (in such capacity, the “Securities
Administrator”), EMC as seller and U.S. Bank National Association as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms
used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the [Current Principal]
[Notional] Amount hereof at a per annum rate equal to the Pass-Through Rate
as
described in the Agreement. The Securities Administrator will distribute
on the
25th day of each month, or, if such 25th day is not a Business Day, the
immediately following Business Day (each, a “Distribution Date”), commencing on
the First Distribution Date specified above, to the Person in whose name
this
Certificate is registered at the close of business on the last Business Day
of
the calendar month preceding the month of such Distribution Date, an amount
equal to the product of the Fractional Undivided Interest evidenced by this
Certificate and the amount (of interest [and principal], if any) required
to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date
in the
month immediately following the month of the latest scheduled maturity date
of
any Mortgage Loan and is not likely to be the date on which the [Current
Principal] [Notional] Amount of this Class of Certificates will be reduced
to
zero.
Distributions
on this Certificate will be made by the Paying Agent by check mailed to the
address of the Person entitled thereto as such name and address shall appear
on
the Certificate Register or, if such Person so requests by notifying the
Securities Administrator in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The Initial [Current Principal] Notional] Amount
of
this Certificate is set forth above. [The Current Principal Amount hereof
will
be reduced to the extent of distributions allocable to principal hereon and
any
Realized Losses allocable hereto.]
This
Certificate is one of a duly authorized issue of Certificates designated
as set
forth on the face hereof (the “Certificates”), issued in twenty Classes. The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it
will
look solely to the Trust Fund for payment hereunder and that the Trustee
is not
liable to the Certificateholders for any amount payable under this Certificate
or the Agreement or, except as expressly provided in the Agreement, subject
to
any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is
made to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced hereby, and the rights, duties and immunities
of the Trustee.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Securities Administrator and the Trustee and the rights
of
the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent
by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of
any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable with the Certificate Registrar
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Securities Administrator for such purposes,
duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder
hereof
or such Holder’s attorney duly authorized in writing, and thereupon one or more
new Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons
in the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Fractional Undivided Interest, as requested by the
Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Securities Administrator,
the
Trustee and any agent of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee
or any
such agent shall be affected by notice to the contrary.
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect
to the
termination of the Agreement) shall terminate upon the earlier of (i) the
later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition
of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and the remittance of all funds due under the Agreement, or
(ii)
the optional repurchase by the party named in the Agreement of all the Mortgage
Loans and other assets of the Trust Fund in accordance with the terms of
the
Agreement. Such optional repurchase may be made only on or after the
Distribution Date on which the aggregate unpaid principal balance of the
Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement
of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
May 31, 2006
|
▇▇▇▇▇
FARGO BANK, N.A.
Not
in its individual capacity but solely as Securities
Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class [_]-[_-[A]-_] [X-] Certificates referred to in the
within-mentioned Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
Authorized
signatory of ▇▇▇▇▇ Fargo Bank N.A., not in its individual capacity
but
solely as Securities Administrator
|
|||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Fractional Undivided Interest evidenced
by the within Mortgage Pass-Through Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I
(We)
further direct the Certificate Registrar to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
||
|
Signature
by or on behalf of assignor
|
||
|
Signature
Guaranteed
|
||
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
|
funds
to
|
|||||||
|
for
the account of
|
|||||||
|
account
number
|
or,
if mailed by check, to
|
||||||
|
Applicable
statements should be mailed to
|
|||||||
|
This
information is provided by
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-2
FORM
OF CLASS B CERTIFICATE
THIS
CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES,
[AND] [THE CLASS [_-B-_] CERTIFICATES][,] [AND] [THE CLASS [_-B-_]
CERTIFICATES][,] [AND] [THE CLASS [_-B-_] CERTIFICATES][,] [AND] [THE CLASS
[_B-[_] CERTIFICATES][,] [AND] [THE CLASS [_-B-_] CERTIFICATES] AS DESCRIBED
IN
THE AGREEMENT (AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE “CODE”).
THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL
PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY, FOLLOWING
THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF
THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY
INQUIRY
OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.
[FOR
CLASS B-1, CLASS B-2 AND CLASS B-3] [UNLESS THIS CERTIFICATE IS PRESENTED
BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
ANY CERTIFICATE ISSUED WILL BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST
COMPANY AND ANY PAYMENT WILL BE MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[FOR
CLASS B-1, CLASS B-2 AND CLASS B-3] [EACH BENEFICIAL OWNER OF THIS CERTIFICATE
OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF
ITS
ACQUISITION OR HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN, THAT EITHER
(I)
IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT
TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION
4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“PLAN”), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE
IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME
TO TIME
(“EXEMPTION”), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED,
AT
THE TIME OF PURCHASE, NOT LOWER THAN “BBB-” (OR ITS EQUIVALENT) BY STANDARD
& POOR’S, FITCH, INC. OR ▇▇▇▇▇’▇ INVESTORS SERVICE, INC., AND THE
CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY, (2) THE
SOURCE
OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR INTEREST HEREIN IS AN
“INSURANCE COMPANY GENERAL ACCOUNT”, AS SUCH TERM IS DEFINED IN PROHIBITED
TRANSACTION CLASS EXEMPTION (“PTCE”) 95-60, AND (3) THE CONDITIONS IN SECTIONS I
AND III OF PTCE 95-60 HAVE BEEN SATISFIED.]
[FOR
CLASS B-1, CLASS B-2 AND CLASS B-3] [THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED
OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
(“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (3)
IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE
MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT
TO
(A) THE RECEIPT BY THE
SECURITIES ADMINISTRATOR AND
THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED
IN THE
AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE SECURITIES ADMINISTRATOR AND THE CERTIFICATE
REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE
WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE
WITH
ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.]
[FOR
CLASS B-1, CLASS B-2 AND CLASS B-3] [THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL
REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT
THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT
AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION (“PTE”) 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER
OR
THE SECURITIES ADMINISTRATOR, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION SPECIFIED
IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.]
|
Certificate
No. 1
|
Variable
Pass-Through Rate
|
|
Class
[_-B-_] Subordinate
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date:
May
1, 2006
|
Aggregate
Initial Current Principal Amount of this Subordinate Certificate
as of the
Cut-off Date: $[_________]
|
|
First
Distribution Date:
June
26, 2006
|
Initial
Current Principal Amount of this Subordinate Certificate as of
the Cut-off
Date: $[_________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, N.A.
|
CUSIP:
[____________]
|
|
Assumed
Final Distribution Date:
July
25, 2036
|
|
BEAR
▇▇▇▇▇▇▇ ARM TRUST 2006-2
MORTGAGE
PASS-THROUGH CERTIFICATE
SERIES
2006-2
evidencing
a fractional undivided interest in the distributions allocable to the Class
[_-B-_] Certificates with respect to a Trust Fund consisting primarily of
a pool
of adjustable rate mortgage loans secured by first liens on one-to-four family
residential properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does
not
represent an obligation of or interest in Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their affiliates or any other person. Neither
this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Structured Asset Mortgage Investments II Inc.,
the
Master Servicer, the Securities Administrator or the Trustee or any of their
affiliates or any other person. None of Structured Asset Mortgage Investments
II
Inc., the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable
from
payments on the Certificates.
This
certifies that [_____________] is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust Fund”)
primarily consisting of adjustable rate mortgage loans secured by first liens
on
one- to four- family residential properties (collectively, the “Mortgage Loans”)
sold by Structured Asset Mortgage Investments II Inc. (“▇▇▇▇ ▇▇”). The Mortgage
Loans were sold by EMC Mortgage Corporation (“EMC”) to ▇▇▇▇ ▇▇. ▇▇▇▇▇ Fargo
Bank, N.A. (“▇▇▇▇▇ Fargo”) will act as master servicer and securities
administrator of the Mortgage Loans (the “Master Servicer” and the “Securities
Administrator”, which terms include any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among ▇▇▇▇ ▇▇ as depositor (the “Depositor”), ▇▇▇▇▇ Fargo as
Master Servicer and securities administrator (in such capacity, the “Securities
Administrator”), EMC as seller and U.S. Bank National Association as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms
used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the Current Principal
Amount hereof at a per annum rate equal to the Pass-Through Rate as described
in
the Agreement. The Securities Administrator will distribute on the 25th day
of
each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a “Distribution Date”), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month preceding the month of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate
and
the amount (of interest and principal, if any) required to be distributed
to the
Holders of Certificates of the same Class as this Certificate. The Assumed
Final
Distribution Date is the Distribution Date in the month immediately following
the month of the latest scheduled maturity date of any Mortgage Loan and
is not
likely to be the date on which the Current Principal Amount of this Class
of
Certificates will be reduced to zero.
Distributions
on this Certificate will be made by the Paying Agent by check mailed to the
address of the Person entitled thereto as such name and address shall appear
on
the Certificate Register or, if such Person so requests by notifying the
Securities Administrator in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The Initial Current Principal Amount of this
Certificate is set forth above. The Current Principal Amount hereof will
be
reduced to the extent of distributions allocable to principal hereon and
any
Realized Losses allocable hereto.
[For
Class B-4, Class B-5 and Class B-6] [No transfer of this Class [_-B-_]
Certificate will be made unless such transfer is (i) exempt from the
registration requirements of the Securities act of 1933, as amended, and
any
applicable state securities laws or is made in accordance with said Act and
laws
and (ii) made in accordance with Section 5.02 of the Agreement. In the event
that such transfer is to be made the Securities Administrator shall register
such transfer if, (i) made to a transferee who has provided the Securities
Administrator with evidence as to its QIB status; or (ii) (A) the transferor
has
advised the Securities Administrator in writing that the Certificate is being
transferred to an Institutional Accredited Investor and (B) prior to such
transfer the transferee furnishes to the Securities Administrator an Investment
Letter; provided that if based upon an Opinion of Counsel to the effect that
(A)
and (B) above are not sufficient to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable laws,
the
Securities Administrator shall as a condition of the registration of any
such
transfer require the transferor to furnish such other certifications, legal
opinions or other information prior to registering the transfer of this
Certificate as shall be set forth in such Opinion of Counsel.]
[For
Class B-1, Class B-2 and Class B-3] [Each beneficial owner of this Certificate
or any interest herein shall be deemed to have represented, by virtue of
its
acquisition or holding of this certificate or interest herein, that either
(i)
it is not a Plan or investing with assets of a Plan or (ii) it has acquired
and
is holding such certificate in reliance on Prohibited Transaction Exemption
90-30, as amended from time to time (“Exemption”), and that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
“BBB-” (or its equivalent) by Standard & Poor’s, Fitch, Inc. or ▇▇▇▇▇’▇
Investors Service, Inc., and the certificate is so rated or (iii) (1) it
is an
insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an “insurance company general account”, as
such term is defined in Prohibited Transaction Class Exemption (“PTCE”) 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.]
[For
Class B-3, Class B-4 and Class B-6] [This Certificate may not be acquired
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended, or Section 4975 of the Internal
Revenue
Code of 1986, as amended, unless the transferee certifies or represents that
the
proposed transfer and holding of a Certificate and the servicing, management
and
operation of the trust and its assets: (i) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption (“PTE”) 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 or PTE 96-23 and (ii)
will not give rise to any additional obligations on the part of the Depositor,
the Securities Administrator, the Master Servicer or the Trustee, which will
be
deemed represented by an owner of a Book-Entry Certificate or a Global
Certificate or unless the opinion specified in section 5.07 of the Agreement
is
provided.]
This
Certificate is one of a duly authorized issue of Certificates designated
as set
forth on the face hereof (the “Certificates”), issued in twenty Classes.
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it
will
look solely to the Trust Fund for payment hereunder and that the Trustee
or the
Securities Administrator is not liable to the Certificateholders for any
amount
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is
made to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced hereby, and the rights, duties and immunities
of the Trustee and the Securities Administrator.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Securities Administrator and the Trustee and the rights
of
the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent
by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of
any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
Holder
hereof or such Holder’s attorney duly authorized in writing, and thereupon one
or more new Certificates in authorized denominations representing a like
aggregate Fractional Undivided Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons
in the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Fractional Undivided Interest, as requested by the
Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Securities Administrator,
the
Trustee and any agent of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee
or any
such agent shall be affected by notice to the contrary.
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect
to the
termination of the Agreement) shall terminate upon the earlier of (i) the
later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition
of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and the remittance of all funds due under the Agreement, or
(ii)
the optional repurchase by the party named in the Agreement of all the Mortgage
Loans and other assets of the Trust Fund in accordance with the terms of
the
Agreement. Such optional repurchase may be made only on or after the
Distribution Date on which the aggregate unpaid principal balance of the
Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement
of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
May 31, 2006
|
▇▇▇▇▇
FARGO BANK, N.A.
Not
in its individual capacity but solely as Securities
Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class [_-B-_] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
Authorized
signatory of ▇▇▇▇▇ Fargo Bank, N.A., not in its individual capacity
but
solely as Securities Administrator
|
|||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Fractional Undivided Interest evidenced
by the within Mortgage Pass-Through Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I
(We)
further direct the Certificate Registrar to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
||
|
Signature
by or on behalf of assignor
|
||
|
Signature
Guaranteed
|
||
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
|
Distributions
shall be made, by wire transfer or otherwise, in immediately available
|
|||||||
|
funds
to
|
|||||||
|
for
the account of
|
|||||||
|
account
number
|
or,
if mailed by check, to
|
||||||
|
Applicable
statements should be mailed to
|
|||||||
|
This
information is provided by
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-3
FORM
OF CLASS R CERTIFICATE
THIS
CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON,
A
PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS DEFINED
BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE “CODE”).
THIS
CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH AN OPINION OF COUNSEL
FOR
THE BENEFIT OF THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE CERTIFICATE
REGISTRAR AND THE SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY (WHICH
SHALL NOT BE AT THE EXPENSE OF THE TRUSTEE) WHICH IS ACCEPTABLE TO THE TRUSTEE,
THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT RESULT IN OR CONSTITUTE A
NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND
WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE SELLER, THE
MASTER SERVICER, ANY SERVICER, THE CERTIFICATE REGISTRAR, THE SECURITIES
ADMINISTRATOR OR THE TRUSTEE.
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF
THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR AND PROVIDES
A
TRANSFER AFFIDAVIT TO STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., THE
SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT
(A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER
1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511
OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE
CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING
HEREIN REFERRED TO AS A “DISQUALIFIED ORGANIZATION”) OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER
OR ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER
OF
THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
|
Certificate
No. 1
|
|
|
Class
R-[_]
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date:
May
1, 2006
|
Aggregate
Initial Current Principal Amount of this Certificate as of the
Cut-off
Date:
$___________
|
|
First
Distribution Date:
June
26, 2006
|
Initial
Current Principal Amount of this Certificate as of the Cut-off
Date:
$_________
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, N.A.
|
CUSIP:
[_____________]
|
|
Assumed
Final Distribution Date:
July
25, 2036
|
|
BEAR
▇▇▇▇▇▇▇ ARM TRUST 2006-2
MORTGAGE
PASS-THROUGH CERTIFICATE
SERIES
2006-2
evidencing
a fractional undivided interest in the distributions allocable to the Class
R-[_] Certificates with respect to a Trust Fund consisting primarily of a
pool
of adjustable rate mortgage loans secured by first liens on one-to-four family
residential properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does
not
represent an obligation of or interest in Structured Asset Mortgage Investments
II Inc., the Master Servicer or the Trustee referred to below or any of their
affiliates or any other person. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental entity or by
Structured Asset Mortgage Investments II Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured
Asset
Mortgage Investments II Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This
certifies that [_____________] is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust Fund”)
primarily consisting of adjustable rate mortgage loans secured by first liens
on
one- to four- family residential properties (collectively, the “Mortgage Loans”)
sold by Structured Asset Mortgage Investments II Inc. (“▇▇▇▇ ▇▇”). The Mortgage
Loans were sold by EMC Mortgage Corporation (“EMC”) to ▇▇▇▇ ▇▇. ▇▇▇▇▇ Fargo
Bank, N.A. (“▇▇▇▇▇ Fargo”) will act as master servicer and the securities
administrator of the Mortgage Loans (the “Master Servicer” and the “Securities
Administrator”, which terms include any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among ▇▇▇▇ ▇▇ as depositor (the “Depositor”), ▇▇▇▇▇ Fargo as
Master Servicer and securities administrator (in such capacity, the “Securities
Administrator”), EMC as seller and U.S. Bank National Association as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms
used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
The
Securities Administrator will distribute on the 25th day of each month, or,
if
such 25th day is not a Business Day, the immediately following Business Day
(each, a “Distribution Date”), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered
at
the close of business on the last Business Day of the calendar month preceding
the month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount
(of
principal, if any) required to be distributed to the Holders of Certificates
of
the same Class as this Certificate. The Assumed Final Distribution Date is
the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the
date on
which the Current Principal Amount of this Class of Certificates will be
reduced
to zero.
Distributions
on this Certificate will be made by the Paying Agent by check mailed to the
address of the Person entitled thereto as such name and address shall appear
on
the Certificate Register or, if such Person so requests by notifying the
Securities Administrator in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The Initial Current Principal Amount of this
Certificate is set forth above. The Current Principal Amount hereof will
be
reduced to the extent of distributions allocable to principal hereon and
any
Realized Losses allocable hereto.
Each
Holder of this Certificate will be deemed to have agreed to be bound by the
restrictions set forth in the Agreement to the effect that (i) each person
holding or acquiring any Ownership Interest in this Certificate must be a
United
States Person and a Permitted Transferee, (ii) the transfer of any Ownership
Interest in this Certificate will be conditioned upon the delivery to ▇▇▇▇
▇▇,
the Trustee and the Securities Administrator of, among other things, an
affidavit to the effect that it is a United States Person and Permitted
Transferee, (iii) any attempted or purported transfer of any Ownership Interest
in this Certificate in violation of such restrictions will be absolutely
null
and void and will vest no rights in the purported transferee, and (iv) if
any
person other than a United States Person and a Permitted Transferee acquires
any
Ownership Interest in this Certificate in violation of such restrictions,
then
the Depositor will have the right, in its sole discretion and without notice
to
the Holder of this Certificate, to sell this Certificate to a purchaser selected
by the Depositor, which purchaser may be the Depositor, or any affiliate
of the
Depositor, on such terms and conditions as the Depositor may
choose.
This
certificate may not be acquired directly or indirectly by, or on behalf of,
an
employee benefit plan or other retirement arrangement which is subject to
Title
I of the Employee Retirement Income Security Act of 1974, as amended, or
section
4975 of the Internal Revenue Code of 1986, as amended, unless the proposed
transferee provides the Securities Administrator with an opinion of counsel
for
the benefit of the Depositor, Master Servicer and the Securities Administrator
and on which they may rely (which shall not be at the expense of the Trustee)
which is acceptable to the Securities Administrator, that the purchase of
this
Certificate will not result in or constitute a nonexempt prohibited transaction,
is permissible under applicable law and will not give rise to any additional
obligations on the part of the Seller, the Master Servicer, any Servicer,
the
Securities Administrator or the Trustee.
This
Certificate is one of a duly authorized issue of Certificates designated
as set
forth on the face hereof (the “Certificates”), issued in twenty Classes.
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it
will
look solely to the Trust Fund for payment hereunder and that the Trustee
is not
liable to the Certificateholders for any amount payable under this Certificate
or the Agreement or, except as expressly provided in the Agreement, subject
to
any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is
made to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced hereby, and the rights, duties and immunities
of the Trustee.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Securities Administrator and the Trustee and the rights
of
the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent
by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of
any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable with the Certificate Registrar
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Securities Administrator for such purposes,
duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder
hereof
or such Holder’s attorney duly authorized in writing, and thereupon one or more
new Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons
in the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Fractional Undivided Interest, as requested by the
Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Securities Administrator,
the
Trustee and any agent of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee
or any
such agent shall be affected by notice to the contrary.
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect
to the
termination of the Agreement) shall terminate upon the earlier of (i) the
later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition
of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and the remittance of all funds due under the Agreement, or
(ii)
the optional repurchase by the party named in the Agreement of all the Mortgage
Loans and other assets of the Trust Fund in accordance with the terms of
the
Agreement. Such optional repurchase may be made only on or after the
Distribution Date on which the aggregate unpaid principal balance of the
Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement
of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
May 31, 2006
|
▇▇▇▇▇
FARGO BANK, N.A.
Not
in its individual capacity but solely as Securities
Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class R-[_] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
Authorized
signatory of ▇▇▇▇▇ Fargo Bank, N.A., not in its individual capacity
but
solely as Securities Administrator
|
|||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Fractional Undivided Interest evidenced
by the within Mortgage Pass-Through Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I
(We)
further direct the Certificate Registrar to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
|
Distributions
shall be made, by wire transfer or otherwise, in immediately available
|
|||||||
|
funds
to
|
|||||||
|
for
the account of
|
|||||||
|
account
number
|
or,
if mailed by check, to
|
||||||
|
Applicable
statements should be mailed to
|
|||||||
|
This
information is provided by
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
B
MORTGAGE
LOAN SCHEDULE
EXHIBIT
C
[RESERVED]
EXHIBIT
D
REQUEST
FOR RELEASE OF DOCUMENTS
|
To:
|
▇▇▇▇▇
Fargo Bank, N.A.
|
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇.▇.
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
Inventory Control
|
RE:
|
Custodial
Agreement, dated as of
|
May
31,
2006, among ▇▇▇▇ ▇▇,
▇▇▇▇▇
Fargo Bank, N.A.,
as
Master Servicer
and
Securities Administrator,
▇▇▇▇▇
Fargo Bank, N.A., as Custodian,
and
U.S.
Bank National Association, as Trustee
In
connection with the administration of the Mortgage Loans held by you pursuant
to
the above-captioned Custodial Agreement, we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described
below,
for the reason indicated.
Mortgage
Loan Number:
Mortgagor
Name, Address & Zip Code:
Reason
for Requesting Documents (check one):
|
_____
|
1.
|
Mortgage
Paid in Full and proceeds have been deposited into the Custodial
Account
|
|
_____
|
2.
|
Foreclosure
|
|
_____
|
3.
|
Substitution
|
|
_____
|
4.
|
Other
Liquidation
|
|
_____
|
5.
|
Nonliquidation Reason:
______________________
|
|
_____
|
6.
|
California
Mortgage Loan paid in full
|
|
By:
|
|||||||||
|
(authorized
signer)
|
|||||||||
|
Issuer:
|
|||||||||
|
Address:
|
|||||||||
|
Date:
|
|||||||||
EXHIBIT
E
FORM
OF
AFFIDAVIT
Affidavit
pursuant to Section 860E(e)(4) of the Internal Revenue Code of 1986, as amended,
and for other purposes
|
)
|
||
|
)
|
ss.:
|
|
|
COUNTY
OF___________
|
)
|
[NAME
OF
OFFICER], being first duly sworn, deposes and says:
1. That
he
is [Title of Officer] of [Name of Investor] (the “Investor”), a [savings
institution] [corporation] duly organized and existing under the laws of
[the
State of ] [the United States], on behalf of which he makes this
affidavit.
2. That
(i)
the Investor is not a “disqualified organization” as defined in Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), and
will not be a disqualified organization as of [Closing Date] [date of purchase];
(ii) it is not acquiring the Structured Asset Mortgage Investments II Inc.,
Bear
▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates, Series 2006-2 Class
R-I
Certificates, Class R-II Certificates and Class R-III Certificates (the
“Residual Certificates”) for the account of a disqualified organization; (iii)
it consents to any amendment of the Pooling and Servicing Agreement that
shall
be deemed necessary by Structured Asset Mortgage Investments II Inc. (upon
advice of counsel) to constitute a reasonable arrangement to ensure that
the
Residual Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the
same
form as this affidavit containing these same four representations and (b)
as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That
the
Investor is one of the following: (i) a citizen or resident of the United
States, (ii) a corporation or partnership (including an entity treated as
a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided
in
regulations), provided that no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated
as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are United States Persons, (iii) an estate
whose income is subject to United States federal income tax regardless of
its
source, or (iv) a trust other than a “foreign trust,” as defined in Section 7701
(a)(31) of the Code.
4. That
the
Investor’s taxpayer identification number is
______________________.
5. That
no
purpose of the acquisition of the Residual Certificates is to avoid or impede
the assessment or collection of tax.
6. That
the
Investor understands that, as the holder of the Residual Certificates, the
Investor may incur tax liabilities in excess of any cash flows generated
by such
Residual Certificates.
7. That
the
Investor intends to pay taxes associated with holding the Residual Certificates
as they become due.
IN
WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its
behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this ____ day of _________, 20__.
|
[NAME
OF INVESTOR]
|
|||||||||||||
|
By:
|
|||||||||||||
|
[Name
of Officer]
|
|||||||||||||
|
[Title
of Officer]
|
|||||||||||||
|
[Address
of Investor for receipt of distributions]
|
|||||||||||||
|
Address
of Investor for receipt of tax
information:
|
|||||||||||||
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 Investor, and acknowledged to me that he executed the same
as
his free act and deed and the free act and deed of the Investor.
Subscribed
and sworn before me this ___ day of _________, 20___.
NOTARY
PUBLIC
COUNTY
OF
STATE
OF
My
commission expires the ___ day of ___________________, 20___.
EXHIBIT
F-1
FORM
OF
INVESTMENT LETTER
[Date]
[SELLER]
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured
Asset Mortgage Investments II Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Re:
|
Structured
Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series
2006-2 Mortgage Pass-Through Certificates (the
“Certificates”),
including
the Class
B-4, Class B-5 and Class B-6 Certificates
(the “Privately
Offered
Certificates”_________________________________________________
|
Dear
Ladies and Gentlemen:
In
connection with our purchase of Privately Offered Certificates, we confirm
that:
|
(i)
|
we
understand that the Privately Offered Certificates are not being
registered under the Securities Act of 1933, as amended (the “Act”) or any
applicable state securities or “Blue Sky” laws, and are being sold to us
in a transaction that is exempt from the registration requirements
of such
laws;
|
|
(ii)
|
any
information we desired concerning the Certificates, including the
Privately Offered Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest (the “Trust”) or any
other matter we deemed relevant to our decision to purchase Privately
Offered Certificates has been made available to
us;
|
|
(iii)
|
we
are able to bear the economic risk of investment in Privately Offered
Certificates; we are an institutional “accredited investor” as defined in
Section 501(a) of Regulation D promulgated under the Act and a
sophisticated institutional
investor;
|
|
(iv)
|
we
are acquiring Privately Offered Certificates for our own account,
not as
nominee for any other person, and not with a present view to any
distribution or other disposition of the Privately Offered
Certificates;
|
|
(v)
|
we
agree the Privately Offered Certificates must be held indefinitely
by us
(and may not be sold, pledged, hypothecated or in any way disposed
of)
unless subsequently registered under the Act and any applicable
state
securities or “Blue Sky” laws or an exemption from the registration
requirements of the Act and any applicable state securities or
“Blue Sky”
laws is available;
|
|
(vi)
|
we
agree that in the event that at some future time we wish to dispose
of or
exchange any of the Privately Offered Certificates (such disposition
or
exchange not being currently foreseen or contemplated), we will
not
transfer or exchange any of the Privately Offered Certificates
unless:
|
(A)
(1)
the sale is to an Eligible Purchaser (as defined below), (2) if required
by the
Pooling and Servicing Agreement (as defined below) a letter to substantially
the
same effect as either this letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the Act, the Rule 144A
and
Related Matters Certificate in the form attached to the Pooling and Servicing
Agreement (as defined below) (or such other documentation as may be acceptable
to the Trustee) is executed promptly by the purchaser and delivered to the
addressees hereof and (3) all offers or solicitations in connection with
the
sale, whether directly or through any agent acting on our behalf, are limited
only to Eligible Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; and
(B) if
the
Privately Offered Certificate is not registered under the Act (as to which
we
acknowledge you have no obligation), the Privately Offered Certificate is
sold
in a transaction that does not require registration under the Act and any
applicable state securities or “blue sky” laws and, if U.S. Bank National
Association (the “Trustee”) so requests, a satisfactory Opinion of Counsel is
furnished to such effect, which Opinion of Counsel shall be an expense of
the
transferor or the transferee;
|
(vii)
|
we
agree to be bound by all of the terms (including those relating
to
restrictions on transfer) of the Pooling and Servicing, pursuant
to which
the Trust was formed; we have reviewed carefully and understand
the terms
of the Pooling and Servicing
Agreement;
|
|
(viii)
|
we
either: (i) are not acquiring the Privately Offered Certificate
directly
or indirectly by, or on behalf of, an employee benefit plan or
other
retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or section
4975 of the
Internal Revenue Code of 1986, as amended, or (ii) are providing
a
representation to the effect that the proposed transfer and holding
of a
Privately Offered Certificate and the servicing, management and
operation
of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited
Transaction Exemption (“PTE”) 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60, or
PTE 96-23 and (II) will not give rise to any additional obligations
on the
part of the Depositor, the Master Servicer, the Securities Administrator
or the Trustee or (iii) have attached hereto the opinion specified
in
Section 5.07 of the Agreement.
|
|
(ix)
|
We
understand that each of the Privately Offered Certificates bears,
and will
continue to bear, a legend to substantiate the following effect:
“THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A
“QIB”),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT
OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER,
RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
“INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY
ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE
RECEIPT BY THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY
IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE CERTIFICATE
REGISTRAR
OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE CERTIFICATE REGISTRAR
THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH
ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL
REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND HOLDING
OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND
ITS ASSETS: (1) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH
IS NOT
COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION
(“PTE”)
84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II) WILL
NOT GIVE
RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE, WHICH
WILL
BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR
A GLOBAL
CERTIFICATE OR UNLESS THE OPINION PROVIDED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED.”
|
“Eligible
Purchaser”
means
a
corporation, partnership or other entity which we have reasonable grounds
to
believe and do believe (i) can make representations with respect to itself
to
substantially the same effect as the representations set forth herein, and
(ii)
is either a Qualified Institutional Buyer as defined under Rule 144A of the
Act
or an institutional “Accredited Investor” as defined under Rule 501 of the
Act.
Terms
not
otherwise defined herein shall have the meanings assigned to them in the
Pooling
and Servicing Agreement, dated as of May 1, 2006, among Structured Asset
Mortgage Investments II Inc., ▇▇▇▇▇ Fargo Bank, N.A. as master servicer and
securities administrator, EMC Mortgage Corporation, as seller and U.S. Bank
National Association, as Trustee (the “Pooling and Servicing
Agreement”).
If
the
Purchaser proposes that its Certificates be registered in the name of a nominee
on its behalf, the Purchaser has identified such nominee below, and has caused
such nominee to complete the Nominee Acknowledgment at the end of this
letter.
Name
of
Nominee (if any): _________________________________
IN
WITNESS WHEREOF, this document has been executed by the undersigned who is
duly
authorized to do so on behalf of the undersigned Eligible Purchaser on the
___
day of ________, 20___.
|
Very
truly yours,
|
|||||||||||||
|
[PURCHASER]
|
|||||||||||||
|
By:
|
|||||||||||||
|
(Authorized
Officer)
|
|||||||||||||
|
[By:
|
|||||||||||||
|
Attorney-in-fact]
|
|||||||||||||
Nominee
Acknowledgment
The
undersigned hereby acknowledges and agrees that as to the Certificates being
registered in its name, the sole beneficial owner thereof is and shall be
the
Purchaser identified above, for whom the undersigned is acting as
nominee.
|
[NAME
OF NOMINEE]
|
|||||||||||||
|
By:
|
|||||||||||||
|
(Authorized
Officer)
|
|||||||||||||
|
[By:
|
|||||||||||||
|
Attorney-in-fact]
|
|||||||||||||
EXHIBIT
F-2
FORM
OF
RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER][Date]
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured
Asset Mortgage Investments II Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Re:
|
Structured
Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series
2006-2 Mortgage Pass-Through Certificates, Class B-4, Class B-5
and
Class
B-6 Certificates (the “Privately Offered
Certificates”)
|
Dear
Ladies and Gentlemen:
In
connection with our purchase of Privately Offered Certificates, the undersigned
certifies to each of the parties to whom this letter is addressed that it
is a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act
of 1933, as amended (the “Act”)) as follows:
|
1.
|
It
owned and/or invested on a discretionary basis eligible securities
(excluding affiliate’s securities, bank deposit notes and CD’s, loan
participations, repurchase agreements, securities owned but subject
to a
repurchase agreement and swaps), as described
below:
|
Date:
______________, 20__ (must be on or after the close of its most recent fiscal
year)
Amount:
$
_____________________; and
|
2.
|
The
dollar amount set forth above is:
|
|
a.
|
greater
than $100 million and the undersigned is one of the following
entities:
|
|
(x)
|
[
]
|
an
insurance company as defined in Section 2(13) of the Act1 ;
or
|
|
|
(y)
|
[
]
|
an
investment company registered under the Investment Company Act
or any
business development company as defined in Section 2(a)(48) of
the
Investment Company Act of 1940; or
|
|
|
(z)
|
[
]
|
a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; or
|
|
|
(aa)
|
[
]
|
a
plan (i) established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political
subdivisions, the laws of which permit the purchase of securities
of this
type, for the benefit of its employees and (ii) the governing investment
guidelines of which permit the purchase of securities of this type;
or
|
|
|
(bb)
|
[
]
|
a
business development company as defined in Section 202(a)(22) of
the
Investment Advisers Act of 1940; or
|
|
|
(cc)
|
[
]
|
a
corporation (other than a U.S. bank, savings and loan association
or
equivalent foreign institution), partnership, Massachusetts or
similar
business trust, or an organization described in Section 501(c)(3)
of the
Internal Revenue Code; or
|
|
|
(dd)
|
[
]
|
a
U.S. bank, savings and loan association or equivalent foreign institution,
which has an audited net worth of at least $25 million as demonstrated
in
its latest annual financial statements; or
|
|
|
(ee)
|
[
]
|
an
investment adviser registered under the Investment Advisers Act;
or
|
|
b.
|
[
]
|
greater
than $10 million, and the undersigned is a broker-dealer registered
with
the SEC; or
|
|
|
c.
|
[
]
|
less
than $10 million, and the undersigned is a broker-dealer registered
with
the SEC and will only purchase Rule 144A securities in transactions
in
which it acts as a riskless principal (as defined in Rule 144A);
or
|
|
|
d.
|
[
]
|
less
than $100 million, and the undersigned is an investment company
registered
under the Investment Company Act of 1940, which, together with
one or more
registered investment companies having the same or an affiliated
investment adviser, owns at least $100 million of eligible securities;
or
|
|
|
e.
|
[
]
|
less
than $100 million, and the undersigned is an entity, all the equity
owners
of which are qualified institutional
buyers.
|
The
undersigned further certifies that it is purchasing a Privately Offered
Certificate for its own account or for the account of others that independently
qualify as “Qualified Institutional Buyers” as defined in Rule 144A. It is aware
that the sale of the Privately Offered Certificates is being made in reliance
on
its continued compliance with Rule 144A. It is aware that the transferor
may
rely on the exemption from the provisions of Section 5 of the Act provided
by
Rule 144A. The undersigned understands that the Privately Offered Certificates
may be resold, pledged or transferred only to (i) a person reasonably believed
to be a Qualified Institutional Buyer that purchases for its own account
or for
the account of a Qualified Institutional Buyer to whom notice is given that
the
resale, pledge or transfer is being made in reliance in Rule 144A, or (ii)
an
institutional “accredited investor,” as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public
offering.
The
undersigned agrees that if at some future time it wishes to dispose of or
exchange any of the Privately Offered Certificates, it will not transfer
or
exchange any of the Privately Offered Certificates to a Qualified Institutional
Buyer without first obtaining a Rule 144A and Related Matters Certificate
in the
form hereof from the transferee and delivering such certificate to the
addressees hereof. Prior to making any transfer of Privately Offered
Certificates, if the proposed Transferee is an institutional “accredited
investor,” the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling
and
Servicing Agreement, dated as of May 1, 2006, among Structured Asset Mortgage
Investments II Inc., ▇▇▇▇▇ Fargo Bank, N.A., EMC Mortgage Corporation and
U.S.
Bank National Association, as Trustee, pursuant to Certificates were
issued.
The
undersigned certifies that it either: (i) is not acquiring the Privately
Offered
Certificate directly or indirectly by, or on behalf of, an employee benefit
plan
or other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or section 4975 of the
Internal Revenue Code of 1986, as amended, or (ii) is providing a representation
or an opinion of counsel to the effect that the proposed transfer and holding
of
a Privately Offered Certificate and the servicing, management and operation
of
the Trust and its assets: (I) will not result in any prohibited transaction
which is not covered under a prohibited transaction exemption, including,
but
not limited to, Prohibited Transaction Exemption (“PTE”) 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ and (II) will not give rise to any additional
obligations on the part of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee or (iii) has attached hereto the opinion specified
in Section 5.07 of the Agreement.
If
the
Purchaser proposes that its Certificates be registered in the name of a nominee
on its behalf, the Purchaser has identified such nominee below, and has caused
such nominee to complete the Nominee Acknowledgment at the end of this
letter.
1 A
purchase by an insurance company for one or more of its separate accounts,
as
defined by Section 2(a)(37) of the Investment Company Act of 1940, which
are
neither registered nor required to be registered thereunder, shall be
deemed to
be a purchase for the account of such insurance company.
Name
of
Nominee (if any):
IN
WITNESS WHEREOF, this document has been executed by the undersigned who is
duly
authorized to do so on behalf of the undersigned Eligible Purchaser on the
____
day of ___________, 20___.
|
Very
truly yours,
|
|||||||||||||
|
[PURCHASER]
|
|||||||||||||
|
By:
|
|||||||||||||
|
(Authorized
Officer)
|
|||||||||||||
|
[By:
|
|||||||||||||
|
Attorney-in-fact]
|
|||||||||||||
NOMINEE
ACKNOWLEDGMENT
The
undersigned hereby acknowledges and agrees that as to the Certificates being
registered in its name, the sole beneficial owner thereof is and shall be
the
Purchaser identified above, for whom the undersigned is acting as
nominee.
|
[NAME
OF NOMINEE]
|
|||||||||||||
|
By:
|
|||||||||||||
|
(Authorized
Officer)
|
|||||||||||||
|
[By:
|
|||||||||||||
|
Attorney-in-fact]
|
|||||||||||||
EXHIBIT
G
FORM
OF
CUSTODIAL AGREEMENT
THIS
CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the
“Agreement’), dated as of May 31, 2006, by and among U.S. BANK NATIONAL
ASSOCIATION, not individually but solely as trustee under the Pooling and
Servicing Agreement defined below (including its successors under the Pooling
and Servicing Agreement defined below, the “Trustee”), STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as depositor (together with any successor in interest,
the
“Depositor”), ▇▇▇▇▇ FARGO BANK, N.A., as master servicer and securities
administrator (together with any successor in interest or successor under
the
Pooling and Servicing Agreement referred to below, the “Master Servicer”) and
▇▇▇▇▇ FARGO BANK, N.A., as custodian (together with any successor in interest
or
any successor appointed hereunder, the “Custodian”).
WITNESSETH
THAT:
WHEREAS,
the Depositor, the Master Servicer, the Trustee and EMC Mortgage Corporation
(the “Seller”) have entered into a Pooling and Servicing Agreement, dated as of
May 1, 2006, relating to the issuance of Bear ▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage
Pass-Through Certificates, Series 2006-2 (as in effect on the date of this
agreement, the “Original Pooling and Servicing Agreement,” and as amended and
supplemented from time to time, the “Pooling and Servicing Agreement’);
and
WHEREAS,
the Custodian has agreed to act as agent for the Trustee for the purposes
of
receiving and holding certain documents and other instruments delivered by
the
Depositor or the Master Servicer under the Pooling and Servicing Agreement
and
the Servicers under their respective Servicing Agreements, all upon the terms
and conditions and subject to the limitations hereinafter set
forth;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Trustee, the Depositor, the Master
Servicer and the Custodian hereby agree as follows:
ARTICLE
I.
DEFINITIONS
Capitalized
terms used in this Agreement and not defined herein shall have the meanings
assigned in the Original Pooling and Servicing Agreement, unless otherwise
required by the context herein.
ARTICLE
II.
CUSTODY
OF MORTGAGE DOCUMENTS
Section
2.1 Custodian
to Act as Agent: Acceptance of Mortgage Files.
The
Custodian, as the duly appointed custodial agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)), receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto
(the
“Mortgage Files”) and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present
and
future Certificateholders.
Section
2.2 Recordation
of Assignments.
If any
Mortgage File includes one or more assignments of Mortgage to the Trustee
in a
state which is specifically excluded from the Opinion of Counsel delivered
by
the Seller to the Trustee and the Custodian pursuant to the provisions of
Section 2.01 of the Pooling and Servicing Agreement, each such assignment
shall
be delivered by the Custodian to the Depositor for the purpose of recording
it
in the appropriate public office for real property records, and the Depositor,
at no expense to the Custodian, shall promptly cause to be recorded in the
appropriate public office for real property records each such assignment
of
Mortgage and, upon receipt thereof from such public office, shall return
each
such assignment of Mortgage to the Custodian.
Section
2.3 Review
of Mortgage Files.
(a) On
or
prior to the Closing Date, in accordance with Section 2.02 of the Pooling
and
Servicing Agreement, the Custodian shall deliver to the Depositor and the
Trustee an Initial Certification in the form annexed hereto as Exhibit One
evidencing receipt (subject to any exceptions noted therein) of a Mortgage
File
for each of the Mortgage Loans listed on the Schedule attached hereto (the
“Mortgage Loan Schedule”).
(b) Within
90
days of the Closing Date, the Custodian agrees, for the benefit of
Certificateholders, to review, in accordance with the provisions of Section
2.02
of the Pooling and Servicing Agreement, each such document, and shall deliver
to
the Depositor and the Trustee an Interim Certification in the form annexed
hereto as Exhibit Two to the effect that all such documents have been executed
and received and that such documents relate to the Mortgage Loans identified
on
the Mortgage Loan Schedule, except for any exceptions listed on Schedule
A
attached to such Interim Certification. The Custodian shall be under no duty
or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be
on
their face.
(c) Not
later
than 180 days after the Closing Date, the Custodian shall review the Mortgage
Files as provided in Section 2.02 of the Pooling and Servicing Agreement
and
deliver to the Depositor and the Trustee a Final Certification in the form
annexed hereto as Exhibit Three evidencing the completeness of the Mortgage
Files.
(d) In
reviewing the Mortgage Files as provided herein and in the Pooling and Servicing
Agreement, the Custodian shall make no representation as to and shall not
be
responsible to verify (i) the validity, legality, enforceability, due
authorization, recordability, sufficiency or genuineness of any of the documents
included in any Mortgage File or (ii) the collectibility, insurability,
effectiveness or suitability of any of the documents in any Mortgage
File.
Upon
receipt of written request from the Trustee, the Custodian shall as soon
as
practicable supply the Trustee with a list of all of the documents relating
to
the Mortgage Loans missing from the Mortgage Files.
Section
2.4 Notification
of Breaches of Representations and Warranties.
Upon
discovery by the Custodian of a breach of any representation or warranty
made by
the Depositor as set forth in the Pooling and Servicing Agreement with respect
to a Mortgage Loan relating to a Mortgage File, the Custodian shall give
prompt
written notice to the Depositor, the related Servicer and the
Trustee.
Section
2.5 Custodian
to Cooperate: Release of Mortgage Files.
Upon
receipt of written notice from the Trustee that the Seller has repurchased
a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement,
and
that the purchase price therefore has been deposited in the Distribution
Account, then the Custodian agrees to promptly release to the Seller the
related
Mortgage File.
Upon
the
Custodian’s receipt of a request for release (a “Request for Release”)
substantially in the form of Exhibit D to the Pooling and Servicing Agreement
signed by a Servicing Officer of the related Servicer stating that it has
received payment in full of a Mortgage Loan or that payment in full will
be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to the related Servicer the related Mortgage File. The Depositor
shall deliver to the Custodian and the Custodian agrees to accept the Mortgage
Note and other documents constituting the Mortgage File with respect to any
Substitute Mortgage Loan.
From
time
to time as is appropriate for the servicing or foreclosure of any Mortgage
Loan,
including, for this purpose, collection under any Primary Insurance Policy,
the
related Servicer (or if the Servicer does not, the Master Servicer) shall
deliver to the Custodian a Request for Release signed by a Servicing Officer
requesting that possession of all of the Mortgage File be released to the
related Servicer and certifying as to the reason for such release and that
such
release will not invalidate any insurance coverage provided in respect of
the
Mortgage Loan under any of the Insurance Policies. Upon receipt of the
foregoing, the Custodian shall deliver the Mortgage File to the related
Servicer. The related Servicer shall cause each Mortgage File or any document
therein so released to be returned to the Custodian when the need therefore
by
the related Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been
deposited in the Distribution Account or (ii) the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal
action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the related Servicer has delivered to the
Custodian a certificate of a Servicing Officer certifying as to the name
and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery.
At
any
time that a Servicer is required to deliver to the Custodian a Request for
Release, the Servicer shall deliver two copies of the Request for Release
if
delivered in hard copy or the Servicer may furnish such Request for Release
electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release.
In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be followed
by an
assignment of mortgage, without recourse, representation or warranty from
the
Trustee to the Seller and the related Mortgage Note shall be endorsed without
recourse by the Trustee and be returned to the Seller; provided, however,
that
in the case of a Mortgage Loan that is registered on the MERS System, no
assignment of mortgage or endorsement of the Mortgage Note by the Trustee
shall
be required. In connection with any Request for Release of a Mortgage File
because of the payment in full of a Mortgage Loan, such Request for Release
shall be accompanied by a certificate of satisfaction or other similar
instrument to be executed by or on behalf of the Trustee and returned to
the
related Servicer.
Section
2.6 Assumption
Agreements.
In the
event that any assumption agreement, substitution of liability agreement
or sale
of servicing agreement is entered into with respect to any Mortgage Loan
subject
to this Agreement in accordance with the terms and provisions of the Pooling
and
Servicing Agreement, the Master Servicer, to the extent provided in the related
Servicing Agreement, shall cause the related Servicer to notify the Custodian
that such assumption or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution agreement,
which shall be added to the related Mortgage File and, for all purposes,
shall
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
ARTICLE
III.
CONCERNING
THE CUSTODIAN
Section
3.1 Custodian
as Bailee and Agent of the Trustee.
With
respect to each Mortgage Note, Mortgage and other documents constituting
each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to
hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders and undertakes to perform such duties
and
only such duties as are specifically set forth in this Agreement and in the
Pooling and Servicing Agreement. Except upon compliance with the provisions
of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File
shall
be delivered by the Custodian to the Depositor, the Servicers or the Master
Servicer or otherwise released from the possession of the
Custodian.
Section
3.2 Reserved.
Section
3.3 Custodian
May Own Certificates.
The
Custodian in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights it would have if it were not
Custodian.
Section
3.4 Master
Servicer to Pay Custodian’s Fees and Expenses.
The
Master Servicer covenants and agrees to pay to the Custodian from time to
time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse
the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly
in
its employ), except any such expense, disbursement or advance as may arise
from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing
Agreement.
Section
3.5 Custodian
May Resign Trustee May Remove Custodian.
The
Custodian may resign from the obligations and duties hereby imposed upon
it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such written notice of resignation, the Trustee shall
either take custody of the Mortgage Files itself and give prompt written
notice
thereof to the Depositor, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy
of
which instrument shall be delivered to the resigning Custodian and one copy
to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and
have
accepted appointment within 30 days after the giving of such written notice
of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The
Trustee may remove the Custodian at any time with the consent of the Master
Servicer. In such event, the Trustee shall appoint, or petition a court of
competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision
or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Servicer or the Depositor.
Any
resignation or removal of the Custodian and appointment of a successor Custodian
pursuant to any of the provisions of this Section 3.5 shall become effective
upon acceptance of appointment by the successor Custodian. The Trustee shall
give prompt notice to the Depositor and the Master Servicer of the appointment
of any successor Custodian. No successor Custodian shall be appointed by
the
Trustee without the prior approval of the Depositor and the Master
Servicer.
Section
3.6 Merger
or Consolidation of Custodian.
Any
Person into which the Custodian may be merged or converted or with which
it may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act
on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section
3.7 Representations
of the Custodian.
The
Custodian hereby represents that it is a depository institution subject to
supervision or examination by a federal or state authority, has a combined
capital and surplus of at least $15,000,000 and is qualified to do business
in
the jurisdictions in which it will hold any Mortgage File.
ARTICLE
IV.
COMPLIANCE
WITH REGULATION AB
Section
4.1 Intent
of the parties; Reasonableness.
The
parties hereto acknowledge and agree that the purpose of this Article IV
is to
facilitate compliance by the Depositor with the provisions of Regulation
AB and
related rules and regulations of the Commission. The Depositor shall not
exercise its right to request delivery of information or other performance
under
these provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and the rules and regulations of
the
Commission under the Securities Act and the Exchange Act. Each of the parties
hereto acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply
with
requests made by the Depositor in good faith for delivery of information
under
these provisions on the basis of evolving interpretations of Regulation AB
to
the extent reasonably practicable. The Custodian shall cooperate reasonably
with
the Depositor to deliver to the Depositor (including any of its assignees
or
designees), any and all disclosure, statements, reports, certifications,
records
and any other information necessary in the reasonable, good faith determination
of the Depositor to permit the Depositor to comply with the provisions of
Regulation AB.
Section
4.2 Additional
Representations and Warranties of the Custodian.
(a) The
Custodian hereby represents and warrants that the information set forth in
the
Prospectus Supplement under the caption "Pooling and Servicing Agreement
- The
Custodian" (the "Custodian Disclosure") does not contain any untrue statement
of
a material fact or omit 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.
(b) The
Custodian shall be deemed to represent to the Depositor as of the date hereof
and on each date on which information is provided to the Depositor under
Section
4.3 that, except as disclosed in writing to the Depositor prior to such date:
(i) there are no aspects of its financial condition that could have a material
adverse effect on the performance by it of its Custodian obligations under
this
Agreement or any other Securitization Transaction as to which it is the
custodian; (ii) there are no material legal or governmental proceedings pending
(or known to be contemplated) against it; and (iii) there are no affiliations,
relationships or transactions relating to the Custodian with respect to the
Depositor or any sponsor, issuing entity, servicer, trustee, originator,
significant obligor, enhancement or support provider or other material
transaction party (as such terms are used in Regulation AB) relating to the
Securitization Transaction contemplated by the Agreement, as identified by
the
Depositor to the Custodian in writing as of the Closing Date (each, a
"Transaction Party").
(c) If
so
requested by the Depositor on any date following the Closing Date, the Custodian
shall, within five Business Days following such request, confirm in writing
the
accuracy of the representations and warranties set forth in paragraph (a)
of
this Section or, if any such representation and warranty is not accurate
as of
the date of such confirmation, provide reasonably adequate disclosure of
the
pertinent facts, in writing, to the requesting party. Any such request from
the
Depositor shall not be given more than once each calendar quarter, unless
the
Depositor shall have a reasonable basis for a determination that any of the
representations and warranties may not be accurate.
Section
4.3 Additional
Information to Be Provided by the Custodian.
For so
long as the Certificates are outstanding, for the purpose of satisfying the
Depositor 's reporting obligation under the Exchange Act with respect to
any
class of Certificates, the Custodian shall (a) notify the Depositor in writing
of any material litigation or governmental proceedings pending against the
Custodian that would be material to Certificateholders, and (b) provide to
the
Depositor a written description of such proceedings. Any notices and
descriptions required under this Section 4.3 shall be given no later than
five
Business Days prior to the Determination Date following the month in which
the
Custodian has knowledge of the occurrence of the relevant event. As of the
date
the Depositor or Master Servicer files each Report on Form 10-D or Form 10-K
with respect to the Certificates, the Custodian will be deemed to represent
that
any information previously provided under this Section 4.3, if any, is
materially correct and does not have any material omissions unless the Custodian
has provided an update to such information.
Section
4.4 Report
on Assessment of Compliance and Attestation.
On or
before March 15 of each calendar year, the Custodian shall:
(a) deliver
to the Depositor a report (in form and substance reasonably satisfactory
to the
Master Servicer, the Securities Administrator and the Depositor) regarding
the
Custodian’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Master Servicer, the Securities Administrator and the Depositor
and signed by an authorized officer of the Custodian, and shall address each
of
the Servicing Criteria specified on a certification substantially in the
form of
Exhibit Four attached hereto; and
(b) deliver
to the Depositor a report of a registered public accounting firm reasonably
acceptable to the Master Servicer, the Securities Administrator and the
Depositor that attests to, and reports on, the assessment of compliance made
by
the Custodian and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act.
Section
4.5 Indemnification;
Remedies.
(a) The
Custodian shall indemnify the Depositor, each affiliate of the Depositor,
EMC
and each broker dealer acting as underwriter, placement agent or initial
purchaser of the Certificates or 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 present and former directors, officers,
employees and agents of each of the foregoing, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that any of them may sustain arising out of or based upon:
(i)
(A)
any untrue statement of a material fact contained or alleged to be contained
in
any information, report, certification, accountants’ attestation or other
material provided under this Article IV by or on behalf of the Custodian
(collectively, the “Custodian Information”), or (B) the omission or alleged
omission to state in the Custodian Information a material fact required to
be
stated in the Custodian Information 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 by the Custodian to deliver any information, report, certification,
accountants’ attestation or other material when and as required under this
Article IV; or
(iii)
the
negligence, bad faith or willful misconduct of the Custodian in the performance
of its obligations under this Article IV.
In
the
case of any failure of performance described in clause (ii) above, the Custodian
shall promptly reimburse the Depositor, the Master Servicer and the Securities
Administrator for all costs reasonably incurred by any of such Persons in
order
to obtain the information, report, certification, accountants’ letter or other
material not delivered as required by the Custodian.
In
no
event shall the Custodian or its directors, officers, and employees be liable
for any special, indirect or consequential damages from any action taken
or
omitted to be taken by it or them hereunder or in connection herewith even
if
advised of the possibility of such damages.
This
indemnification shall survive the termination of this Agreement or the
termination of the Custodian.
ARTICLE
V.
MISCELLANEOUS
PROVISIONS
Section
5.1 Notices.
All
notices, requests, consents and demands and other communications required
under
this Agreement or pursuant to any other instrument or document delivered
hereunder shall be in writing and, unless otherwise specifically provided,
may
be delivered personally, by telegram or telex, or by registered or certified
mail, postage prepaid, return receipt requested, at the addresses specified
on
the signature page hereof (unless changed by the particular party whose address
is stated herein by similar notice in writing), in which case the notice
will be
deemed delivered when received.
Section
5.2 Amendments.
No
modification or amendment of or supplement to this Agreement shall be valid
or
effective unless the same is in writing and signed by all parties hereto,
and
neither the Depositor, the Master Servicer nor the Trustee shall enter into
any
amendment hereof except as permitted by the Pooling and Servicing Agreement.
The
Trustee shall give prompt notice to the Custodian of any amendment or supplement
to the Pooling and Servicing Agreement and furnish the Custodian with written
copies thereof.
Section
5.3 GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS,
RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section
5.4 Recordation
of Agreement.
To the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the properties subject
to
the Mortgages are situated, and in any other appropriate public recording
office
or elsewhere, such recordation to be effected by the Depositor and at the
Trust’s expense, but only upon direction accompanied by an Opinion of Counsel
reasonably satisfactory to the Depositor to the effect that the failure to
effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any
number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
Section
5.5 Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the holders thereof.
IN
WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
|
Address:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
Confirmation:
|
U.S.
BANK NATIONAL ASSOCIATION, not individually but solely as
Trustee
By:_______________________________________
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇
Title:
Vice President
|
|
Address:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.
By:_______________________________________
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title:
Vice President
|
|
Address:
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇
FARGO BANK, N.A.,
as
Master Servicer
By:_______________________________________
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Vice
President
|
|
Address:
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇
FARGO BANK, N.A.,
as
Custodian
By:_______________________________________
Name:
Title:
|
|
STATE
OF MASSACHUSETTS
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF SUFFOLK
|
)
|
On
the
31st
day of
May 2006 before me, a notary public in and for said State, personally appeared
___________, known to me to be a _____________ of U.S. Bank National
Association, a national banking association that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
Notary
Public
|
[SEAL]
|
STATE
OF MARYLAND
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ▇▇▇▇▇▇
|
)
|
On
the
31st day of May 2006 before me, a notary public in and for said State,
personally appeared _____________, known to me to be a ______________ of
▇▇▇▇▇
Fargo Bank, N.A., a national banking association that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said national banking association, and acknowledged to me that such national
banking association executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
Notary
Public
|
[SEAL]
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
the
31st
day of
May 2006 before me, a notary public in and for said State, personally appeared
___________________________ known to me to be a ____________________ of
Structured Asset Mortgage Investments II Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MARYLAND
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ▇▇▇▇▇▇
|
)
|
On
the
31st
day of
May 2006 before me, a notary public in and for said State, personally appeared
____________, known to me to be a _____________ of ▇▇▇▇▇ Fargo Bank, N.A.,
one
of the corporations that executed the within instrument, and also known to
me to
be the person who executed it on behalf of said corporation, and acknowledged
to
me that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
EXHIBIT
ONE
FORM
OF
CUSTODIAN INITIAL CERTIFICATION
May
31,
2006
|
U.S.
Bank National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
Structured
Asset Mortgage Investments II Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Attention:
Structured Asset Mortgage Investments II Inc.
Bear
▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-Through Certificates, Series
2006-2
Re:
Custodial
Agreement, dated as of May 31, 2006, by and
among U.S. Bank National Association, Structured Asset
Mortgage Investments II Inc. and ▇▇▇▇▇ Fargo Bank, N.A.
relating to Bear ▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-
Through
Certificates, Series 2006-2
Ladies
and Gentlemen:
In
accordance with Section 2.3(a) of the above-captioned Custodial Agreement
and,
subject to Section 2.02(a) of the Pooling and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Mortgage
File
(which contains an original Mortgage Note or lost note affidavit) to the
extent
required in Section 2.01 of the Pooling and Servicing Agreement with respect
to
each Mortgage Loan listed in the Mortgage Loan Schedule, with any exceptions
listed on Schedule A attached hereto.
Capitalized
words and phrases used herein shall have the respective meanings assigned
to
them in the above-captioned Custodial Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
|
|||||||||||||
|
By:
|
|||||||||||||
|
Name:
|
|||||||||||||
|
Title:
|
|||||||||||||
EXHIBIT
TWO
FORM
OF
CUSTODIAN INTERIM CERTIFICATION
___________,
20__
|
U.S.
Bank National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
Structured
Asset Mortgage Investments II Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Attention:
Structured Asset Mortgage Investments II Inc.
Bear
▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-Through Certificates, Series
2006-2
Re: Custodial
Agreement, dated as of May 31, 2006, by and
among U.S. Bank National Association, Structured Asset
Mortgage
Investments II Inc. and ▇▇▇▇▇ Fargo Bank, N.A.
relating to Bear ▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-
Through
Certificates, Series
2006-2
Ladies
and Gentlemen:
In
accordance with Section 2.3(b) of the above-captioned Custodial Agreement
and,
subject to Section 2.02(a) of the Pooling and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Mortgage
File
to the extent required pursuant to Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that: all required documents have been executed and received
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized
words and phrases used herein shall have the respective meanings assigned
to
them in the above-captioned Custodial Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
|
|||||||||||||
|
By:
|
|||||||||||||
|
Name:
|
|||||||||||||
|
Title:
|
|||||||||||||
EXHIBIT
THREE
FORM
OF
CUSTODIAN FINAL CERTIFICATION
_______,
20__
|
U.S.
Bank National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
Structured
Asset Mortgage Investments II Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Attention:
Structured Asset Mortgage Investments II Inc.
Bear
▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-Through Certificates, Series
2006-2
Re: Custodial
Agreement, dated as of May 31, 2006, by and among
U.S. Bank National Association, Structured Asset Mortgage
Investments II Inc. and ▇▇▇▇▇ Fargo Bank , National Association
relating to Bear ▇▇▇▇▇▇▇ ARM Trust 2006-2,
Mortgage
Pass-Through Certificates, Series 2006-2
Ladies
and Gentlemen:
In
accordance with Section 2.3(c) of the above-captioned Custodial Agreement
and,
subject to Section 2.02(b) of the Pooling and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Mortgage
File
to the extent required pursuant to Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that: all required documents have been executed and received
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized
words and phrases used herein shall have the respective meanings assigned
to
them in the above-captioned Custodial Agreement or in the Pooling and Servicing
Agreement, as applicable.
|
▇▇▇▇▇
FARGO BANK, N.A.
|
|||||||||||||
|
By:
|
|||||||||||||
|
Name:
|
|||||||||||||
|
Title:
|
|||||||||||||
EXHIBIT
H-1
ARTICLES
IV, V AND VI OF THE
COUNTRYWIDE
HOME LOANS SERVICING LP SERVICING AGREEMENT
[Provided
upon request]
EXHIBIT
H-2
SERVICING
AGREEMENT
GMAC
MORTGAGE CORPORATION
[Provided
upon request]
EXHIBIT
H-3
SERVICING
AGREEMENT
BANK
OF
AMERICA, NATIONAL CORPORATION
[Provided
upon request]
EXHIBIT
H-4
SERVICING
AGREEMENT
▇▇▇▇▇
FARGO BANK, N.A.
[Provided
upon request]
EXHIBIT
I
ASSIGNMENT
AGREEMENTS
[Provided
upon request]
EXHIBIT
J
MORTGAGE
LOAN PURCHASE AGREEMENT, dated as of May 31, 2006, as amended and supplemented
by any and all amendments hereto (collectively, the “Agreement”),
by
and between EMC MORTGAGE CORPORATION, a Delaware corporation (the “Mortgage
Loan Seller”)
and
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., a Delaware corporation (the
“Purchaser”).
Upon
the
terms and subject to the conditions of this Agreement, the Mortgage Loan
Seller
agrees to sell, and the Purchaser agrees to purchase, certain conventional,
first lien mortgage loans secured primarily by one- to four-family residential
properties and individual condominium units (collectively, the “Mortgage
Loans”)
as
described herein. The Purchaser intends to deposit the Mortgage Loans into
a
trust fund (the “Trust
Fund”)
and
create Bear ▇▇▇▇▇▇▇ ARM Trust 2006-2, Mortgage Pass-Through Certificates,
Series
2006-2 (the “Certificates”),
under
a pooling and servicing agreement, to be dated as of May 1, 2006 (the
“Pooling
and Servicing Agreement”),
among
the Purchaser, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer and
securities administrator, U.S. Bank National Association, as trustee (the
“Trustee”)
and
EMC Mortgage Corporation, as seller.
The
Purchaser has filed with the Securities and Exchange Commission (the
“Commission”)
a
registration statement on Form S-3 (Number 333-132232) relating to its Mortgage
Pass-Through Certificates and the offering of certain series thereof (including
certain classes of the Certificates) from time to time in accordance with
Rule
415 under the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder (the “Securities
Act”).
Such
registration statement, when it became effective under the Securities Act,
and
the prospectus relating to the public offering of certain classes of the
Certificates by the Purchaser (the “Public
Offering”),
as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the “Registration
Statement”
and
the
“Prospectus,”
respectively. The “Prospectus
Supplement”
shall
mean that supplement, dated May 26, 2006, to the Prospectus, dated March
28,
2006, relating to certain classes of the Certificates. With respect to the
Public Offering of certain classes of the Certificates, the Purchaser and
Bear,
▇▇▇▇▇▇▇ & Co. Inc. (“Bear
▇▇▇▇▇▇▇”)
have
entered into a terms agreement dated as of May 31, 2006 to an underwriting
agreement dated May 12, 2006, between the Purchaser and Bear ▇▇▇▇▇▇▇ (together,
the “Underwriting
Agreement”).
Now,
therefore, in consideration of the premises and the mutual agreements set
forth
herein, the parties hereto agree as follows:
Definitions.
Certain
terms are defined herein. Capitalized terms used herein but not defined herein
shall have the meanings specified in the Pooling and Servicing Agreement.
The
following other terms are defined as follows:
Acquisition
Price:
Cash in
an amount equal to $______ (plus $______ in accrued interest).2
Bear
▇▇▇▇▇▇▇:
Bear,
▇▇▇▇▇▇▇ & Co. Inc.
Closing
Date:
May 31,
2006.
Cut-off
Date:
May 1,
2006.
Cut-off
Date Balance:
$[
].
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by a Substitute Mortgage
Loan.
Due
Date:
With
respect to each Mortgage Loan, the date in each month on which its scheduled
payment is due if such due date is the first day of a month and otherwise
is
deemed to be the first day of the following month or such other date specified
in the related Servicing Agreement.
Fitch:
Fitch,
Inc., or its successors in interest.
Master
Servicer:
▇▇▇▇▇
Fargo Bank, N.A..
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
Mortgage:
The
mortgage or deed of trust creating a first lien on an interest in real property
securing a Mortgage Note.
Mortgage
File:
The
items referred to in Exhibit
1
pertaining to a particular Mortgage Loan and any additional documents required
to be added to such documents pursuant to this Agreement or the Pooling and
Servicing Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne by a Mortgage Note as stated therein.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Rate:
For
each Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan less
the
Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Mortgage Loan Seller
or
the Purchaser, reasonably acceptable to the Trustee.
Person:
Any
legal person, including any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Purchase
Price:
With
respect to any Mortgage Loan (or any property acquired with respect thereto)
required to be repurchased by the Mortgage Loan Seller pursuant to this
Agreement or Article II of the Pooling and Servicing Agreement, an amount
equal
to the sum of (i)(a) 100% of the Outstanding Principal Balance of such Mortgage
Loan as of the date of repurchase (or if the related Mortgaged Property was
acquired with respect thereto, 100% of the Outstanding Principal Balance
at the
date of the acquisition), plus (b) accrued but unpaid interest on the
Outstanding Principal Balance at the related Mortgage Interest Rate, through
and
including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan and (ii) any costs and damages (if any) incurred by the Trust in connection
with any violation of such Mortgage Loan of any anti-predatory lending
laws.
Rating
Agencies:
Standard & Poor’s and Fitch, each a “Rating
Agency.”
Securities
Act:
The
Securities Act of 1933, as amended.
Security
Instrument:
A
written instrument creating a valid first lien on a Mortgaged Property securing
a Mortgage Note, which may be any applicable form of mortgage, deed of trust,
deed to secure debt or security deed, including any riders or addenda
thereto.
Servicing
Agreements:
Shall
have the meaning assigned to such term in the Pooling and Servicing
Agreement.
Standard
& Poor’s:
Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its
successors in interest.
Substitute
Mortgage Loan:
A
mortgage loan substituted for a Deleted Mortgage Loan which must meet, on
the
date of such substitution, the requirements stated herein and in the Pooling
and
Servicing Agreement with respect to such substitution; upon such substitution,
such mortgage loan shall be a “Mortgage Loan” hereunder.
Value:
The
value of the Mortgaged Property at the time of origination of the related
Mortgage Loan, such value being the lesser of (i) the value of such property
set
forth in an appraisal accepted by the applicable originator of the Mortgage
Loan
or (ii) the sales price of such property at the time of
origination.
2
Please
contact Bear, ▇▇▇▇▇▇▇ & Co. Inc. for Purchase
Price.
SECTION
1. Purchase
and Sale of the Mortgage Loans and Related Rights.
(a) Upon
satisfaction of the conditions set forth in Section 10 hereof, the Mortgage
Loan
Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans
having an aggregate outstanding principal balance as of the Cut-off Date
equal
to the Cut-off Date Balance.
(b) The
closing for the purchase and sale of the Mortgage Loans and the closing for
the
issuance of the Certificates will take place on the Closing Date at the office
of the Purchaser’s counsel in New York, New York or such other place as the
parties shall agree.
(c) Upon
the
satisfaction of the conditions set forth in Section 10 hereof, on the Closing
Date, the Purchaser shall pay to the Mortgage Loan Seller the Acquisition
Price
for the Mortgage Loans in immediately available funds by wire transfer to
such
account or accounts as shall be designated by the Mortgage Loan
Seller.
(d) In
addition to the foregoing, on the Closing Date the Mortgage Loan Seller assigns
to the Purchaser all of its right, title and interest in the Servicing
Agreements (other than its right to enforce the representations and warranties
set forth therein).
SECTION
2. Mortgage
Loan Schedules. The
Mortgage Loan Seller agrees to provide to the Purchaser as of the date hereof
a
preliminary listing of the Mortgage Loans (the “Preliminary
Mortgage Loan Schedule”)
setting forth the information listed on Exhibit
2
to this
Agreement with respect to each of the Mortgage Loans being sold by the Mortgage
Loan Seller. If there are changes to the Preliminary Mortgage Loan Schedule,
the
Mortgage Loan Seller shall provide to the Purchaser as of the Closing Date
a
final schedule (the “Final
Mortgage Loan Schedule”)
setting forth the information listed on Exhibit 2 to this Agreement with
respect
to each of the Mortgage Loans being sold by the Mortgage Loan Seller to the
Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser
on the Closing Date, shall be attached to an amendment to this Agreement
to be
executed on the Closing Date by the parties hereto and shall be in form and
substance mutually agreed to by the Mortgage Loan Seller and the Purchaser
(the
“Amendment”).
If
there are no changes to the Preliminary Mortgage Loan Schedule, the Preliminary
Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all
purposes hereof.
SECTION
3. Mortgage
Loan Transfer.
(a) The
Purchaser will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due after the Cut-off Date (regardless of when actually
collected) and all payments thereon, other than scheduled principal and interest
due on or before the Cut-off Date but received after the Cut-off Date. The
Mortgage Loan Seller will be entitled to all scheduled payments of principal
and
interest on the Mortgage Loans due on or before the Cut-off Date (including
payments collected after the Cut-off Date) and all payments thereon, other
than
scheduled principal and interest due after the Cut-off Date but received
on or
before the Cut-off Date. Such principal amounts and any interest thereon
belonging to the Mortgage Loan Seller as described above will not be included
in
the aggregate outstanding principal balance of the Mortgage Loans as of the
Cut-off Date as set forth on the Final Mortgage Loan Schedule.
(b) Pursuant
to various conveyance documents to be executed on the Closing Date and pursuant
to the Pooling and Servicing Agreement, the Purchaser will assign on the
Closing
Date all of its right, title and interest in and to the Mortgage Loans to
the
Trustee for the benefit of the Certificateholders. In connection with the
transfer and assignment of the Mortgage Loans, the Mortgage Loan Seller has
delivered or will deliver or cause to be delivered to the Trustee by the
Closing
Date or such later date as is agreed to by the Purchaser and the Mortgage
Loan
Seller (each of the Closing Date and such later date is referred to as a
“Mortgage
File Delivery Date”),
the
items of each Mortgage File, provided,
however,
that in
lieu of the foregoing, the Mortgage Loan Seller may deliver the following
documents, under the circumstances set forth below: (i) in lieu of the original
Security Instrument, assignments to the Trustee or intervening assignments
thereof which have been delivered, are being delivered or will, upon receipt
of
recording information relating to the Security Instrument required to be
included thereon, be delivered to recording offices for recording and have
not
been returned to the Mortgage Loan Seller in time to permit their delivery
as
specified above, the Mortgage Loan Seller may deliver a true copy thereof
with a
certification by the Mortgage Loan Seller, on the face of such copy,
substantially as follows: “Certified to be a true and correct copy of the
original, which has been transmitted for recording”; (ii) in lieu of the
Security Instrument, assignments to the Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Mortgage Loan Seller to such effect)
the Mortgage Loan Seller may deliver photocopies of such documents containing
an
original certification by the judicial or other governmental authority of
the
jurisdiction where such documents were recorded; (iii) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered
by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities
of
the Mortgage Loan Seller; and (iv) the Mortgage Loan Seller shall not be
required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and the Mortgage Loan Seller, between
the
Mortgage Loan Seller and the Depositor, and between the Depositor and the
Trustee; and provided further, however, that in the case of Mortgage Loans
which
have been prepaid in full after the Cut-off Date and prior to the Closing
Date,
the Mortgage Loan Seller, in lieu of delivering the above documents, may
deliver
to the Trustee a certification by the Mortgage Loan Seller or the Master
Servicer to such effect and shall deposit all amounts paid in respect of
such
Mortgage Loans in the Master Servicer Collection Account on the Closing Date.
The Mortgage Loan Seller shall deliver such original documents (including
any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received.
The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments,
if
any, and the assignment of the Security Instrument to be recorded not later
than
180 days after the Closing Date, unless such assignment is not required to
be
recorded under the terms set forth in Section 6(a) hereof.
(c) In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Mortgage Loan Seller further agrees that it will cause, at the
Mortgage Loan Seller’s own expense, within 30 days after the Closing Date, the
MERS® System to indicate that such Mortgage Loans have been assigned by the
Mortgage Loan Seller to the Purchaser and by the Purchaser to the Trustee
in
accordance with this Agreement for the benefit of the Certificateholders
by
including (or deleting, in the case of Mortgage Loans which are repurchased
in
accordance with this Agreement) in such computer files (a) the code in the
field
which identifies the specific Trustee and (b) the code in the field “Pool Field”
which identifies the series of the Certificates issued in connection with
such
Mortgage Loans. The Mortgage Loan Seller further agrees that it will not,
and
will not permit any Servicer or the Master Servicer to alter the codes
referenced in this paragraph with respect to any Mortgage Loan during the
term
of the Pooling and Servicing Agreement unless and until such Mortgage Loan
is
repurchased in accordance with the terms of the Pooling and Servicing
Agreement.
The
Mortgage Loan Seller and the Purchaser acknowledge hereunder that all of
the
Mortgage Loans and the related servicing will ultimately be assigned to U.S.
Bank National Association, as Trustee for the Certificateholders, on the
date
hereof.
SECTION
4. Examination
of Mortgage Files.
(a) On
or
before the Mortgage File Delivery Date, the Mortgage Loan Seller will have
made
the Mortgage Files available to the Purchaser or its agent for examination
which
may be at the offices of the Trustee or the Mortgage Loan Seller and/or the
Mortgage Loan Seller’s custodian. The fact that the Purchaser or its agent has
conducted or has failed to conduct any partial or complete examination of
the
Mortgage Files shall not affect the Purchaser’s rights to demand cure,
repurchase, substitution or other relief as provided in this Agreement. In
furtherance of the foregoing, the Mortgage Loan Seller shall make the Mortgage
Files available to the Purchaser or its agent from time to time so as to
permit
the Purchaser to confirm the Mortgage Loan Seller’s compliance with the delivery
and recordation requirements of this Agreement and the Pooling and Servicing
Agreement. In addition, upon request of the Purchaser, the Mortgage Loan
Seller
agrees to provide to the Purchaser, Bear ▇▇▇▇▇▇▇ and to any investors or
prospective investors in the Certificates information regarding the Mortgage
Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear ▇▇▇▇▇▇▇ and to such investors or prospective investors (which
may be at the offices of the Mortgage Loan Seller and/or the Mortgage Loan
Seller’s custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear ▇▇▇▇▇▇▇ and such
investors or potential investors to conduct such due diligence as any such
party
reasonably believes is appropriate.
(b) Pursuant
to the Pooling and Servicing Agreement, on the Closing Date the Custodian,
on
behalf of the Trustee, for the benefit of the Certificateholders, will
acknowledge receipt of each Mortgage Loan, by delivery to the Mortgage Loan
Seller, the Purchaser and the Trustee of an initial certification in the
form
attached as Exhibit One to the Custodial Agreement.
(c) Pursuant
to the Pooling and Servicing Agreement, within 90 days of the Closing Date
(or,
with respect to any Substitute Mortgage Loan, within five business days after
the receipt by the Trustee or Custodian thereof), the Trustee will review
or
shall cause the Custodian to review items of the Mortgage Files as set forth
on
Exhibit
1
and will
deliver to the Mortgage Loan Seller, the Purchaser and the Trustee an interim
certification substantially in the form of Exhibit Two to the Custodial
Agreement. If the Trustee or Custodian, as its agent, finds any document
listed
on Exhibit
1
not to
have been executed or received, or to be unrelated, determined on the basis
of
the Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the Final Mortgage Loan Schedule or to appear defective
on
its face (a “Material
Defect”),
the
Trustee or the Custodian, as its agent, shall promptly notify the Mortgage
Loan
Seller of such Material Defect. The Mortgage Loan Seller shall correct or
cure
any such Material Defect within 90 days from the date of notice from the
Trustee
or the Custodian, as its agent, of the Material Defect and if the Mortgage
Loan
Seller fails to correct or cure such Material Defect within such period and
such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Mortgage Loan Seller will, in accordance
with
the terms of the Pooling and Servicing Agreement, within 90 days of the date
of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two
years
of the Closing Date) or purchase the related Mortgage Loan at the applicable
Purchase Price; provided
that,
if such
defect would cause the Mortgage Loan to be other than a “qualified mortgage” as
defined in Section 860G(a)(3) of the Code, any such cure, repurchase or
substitution must occur within 90 days from the date such breach was discovered;
provided, however,
that if
such defect relates solely to the inability of the Mortgage Loan Seller to
deliver the original Security Instrument or intervening assignments thereof,
or
a certified copy because the originals of such documents, or a certified
copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan
Seller
shall not be required to purchase such Mortgage Loan if the Mortgage Loan
Seller
delivers such original documents or certified copy promptly upon receipt,
but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to
the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage
Loan
Seller shall instead deliver a recording receipt of such recording office
or, if
such receipt is not available, a certificate confirming that such documents
have
been accepted for recording, and delivery to the Trustee or the Custodian,
as
its agent, shall be effected by the Mortgage Loan Seller within thirty days
of
its receipt of the original recorded document.
(d) Pursuant
to the Pooling and Servicing Agreement, within 180 days of the Closing Date
(or,
with respect to any Substitute Mortgage Loan, within five business days after
the receipt by the Trustee or Custodian thereof) the Trustee will review
or
cause the Custodian to review items of the Mortgage Files as set forth on
Exhibit
1
and will
deliver to the Mortgage Loan Seller, the Purchaser and the Trustee a final
certification substantially in the form of Exhibit Three to the Custodial
Agreement. If the Trustee or Custodian, as its agent, finds a Material Defect,
the Trustee or the Custodian, as its agent, shall promptly notify the Mortgage
Loan Seller of such Material Defect. The Mortgage Loan Seller shall correct
or
cure any such Material Defect within 90 days from the date of notice from
the
Trustee or the Custodian, as its agent, of the Material Defect and if the
Mortgage Loan Seller fails to correct or cure such Material Defect within
such
period and such defect materially and adversely affects the interests of
the
Certificateholders in the related Mortgage Loan, the Mortgage Loan Seller
will,
in accordance with the terms of the Pooling and Servicing Agreement, within
90
days of the date of notice, provide the Trustee with a Substitute Mortgage
Loan
(if within two years of the Closing Date) or purchase the related Mortgage
Loan
at the applicable Purchase Price; provided
that,
if such
defect would cause the Mortgage Loan to be other than a “qualified mortgage” as
defined in Section 860G(a)(3) of the Code, any such cure, repurchase or
substitution must occur within 90 days from the date such breach was discovered;
provided, however,
that if
such defect relates solely to the inability of the Mortgage Loan Seller to
deliver the original Security Instrument or intervening assignments thereof,
or
a certified copy because the originals of such documents, or a certified
copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan
Seller
shall not be required to purchase such Mortgage Loan if the Mortgage Loan
Seller
delivers such original documents or certified copy promptly upon receipt,
but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to
the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage
Loan
Seller shall instead deliver a recording receipt of such recording office
or, if
such receipt is not available, a certificate confirming that such documents
have
been accepted for recording, and delivery to the Trustee or the Custodian,
as
its agent, shall be effected by the Mortgage Loan Seller within thirty days
of
its receipt of the original recorded document.
(e) At
the
time of any substitution, the Mortgage Loan Seller shall deliver or cause
to be
delivered the Substitute Mortgage Loan, the related Mortgage File and any
other
documents and payments required to be delivered in connection with a
substitution pursuant to the Pooling and Servicing Agreement. At the time
of any
purchase or substitution, the Trustee in accordance with the terms of the
Pooling and Servicing Agreement shall (i) assign to the Mortgage Loan Seller
and
cause the Custodian to release the documents (including, but not limited
to, the
Mortgage, Mortgage Note and other contents of the Mortgage File) in the
possession of the Custodian relating to the Deleted Mortgage Loan and (ii)
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.
SECTION
5. Recordation
of Assignments of Mortgage.
(a) The
Mortgage Loan Seller shall cause each assignment of the Security Instrument
from
the Mortgage Loan Seller to the Trustee to be recorded not later than 180
days
after the Closing Date, unless (a) such recordation is not required by the
Rating Agencies or an Opinion of Counsel has been provided to the Trustee
(with
a copy to the Custodian) which states that the recordation of such assignment
is
not necessary to protect the interests of the Certificateholders in the related
Mortgage Loans or (b) MERS is identified on the Mortgage or on a properly
recorded assignment of the Mortgage, as the Mortgagee of record solely as
nominee for the Mortgage Loan Seller and its successors and assigns;
provided,
however,
notwithstanding the delivery of any such Opinion of Counsel, each assignment
of
Mortgage shall be submitted for recording by the Mortgage Loan Seller in
the
manner described above, at no expense to the Trust Fund or Trustee, upon
the
earliest to occur of (i) reasonable direction by the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of
the
Trust, (ii) the occurrence of an Event of Default, (iii) the occurrence of
a
bankruptcy, insolvency or foreclosure relating to the Mortgage Loan Seller
and,
(iv) the occurrence of a servicing transfer as described in Section 8.02
of the
Pooling and Servicing Agreement.
(b) While
each such Mortgage or assignment is being recorded, if necessary, the Mortgage
Loan Seller shall leave or cause to be left with the Trustee a certified
copy of
such Mortgage or assignment. All customary recording fees and reasonable
expenses relating to the recordation of the assignments of mortgage to the
Trustee or the Opinion of Counsel, as the case may be, shall be borne by
the
Mortgage Loan Seller.
(c) It
is the
express intent of the parties hereto that the conveyance of the Mortgage
Loans
by the Mortgage Loan Seller to the Purchaser, as contemplated by this Agreement
be, and be treated as, a sale. It is, further, not the intention of the parties
that such conveyance be deemed a pledge of the Mortgage Loans by the Mortgage
Loan Seller to the Purchaser to secure a debt or other obligation of the
Mortgage Loan Seller. However, in the event that, notwithstanding the intent
of
the parties, the Mortgage Loans are held by a court of competent jurisdiction
to
continue to be property of the Mortgage Loan Seller, then (i) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles
8
and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the
Mortgage Loans provided for herein shall be deemed to be a grant by the Mortgage
Loan Seller to the Purchaser of a security interest in all of the Mortgage
Loan
Seller’s right, title and interest in and to the Mortgage Loans and all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of
the
foregoing into cash, instruments, securities or other property, to the extent
the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (iii) the possession by the Purchaser
or the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed
to be
“possession by the secured party” for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable
Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts
or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant
to any
provision hereof or pursuant to the Pooling and Servicing Agreement shall
also
be deemed to be an assignment of any security interest created hereby. The
Mortgage Loan Seller and the Purchaser shall, to the extent consistent with
this
Agreement, take such actions as may be reasonably necessary to ensure that,
if
this Agreement were deemed to create a security interest in the Mortgage
Loans,
such security interest would be deemed to be a perfected security interest
of
first priority under applicable law and will be maintained as such throughout
the term of the Pooling and Servicing Agreement.
SECTION
6. Representations
and Warranties of Mortgage Loan Seller Concerning the Mortgage
Loans.
The
Mortgage Loan Seller hereby represents and warrants to the Purchaser as of
the
Closing Date, or such other date as may be specified below with respect to
each
Mortgage Loan being sold by it, that:
(i) the
information set forth in the Mortgage Loan Schedule hereto is true and correct
in all material respects;
(ii) immediately
prior to the transfer to the Purchaser, the Mortgage Loan Seller was the
sole
owner of beneficial title and holder of each Mortgage and Mortgage Note relating
to the Mortgage Loans and is conveying the same free and clear of any and
all
liens, claims, encumbrances, participation interests, equities, pledges,
charges
or security interests of any nature and the Mortgage Loan Seller has full
right
and authority to sell or assign the same pursuant to this
Agreement;
(iii) each
Mortgage Loan at the time it was made complied in all material respects with
all
applicable laws and regulations, including, without limitation, usury, equal
credit opportunity, disclosure and recording laws and all applicable predatory,
abusive and fair lending laws; and each Mortgage Loan has been serviced in
all
material respects in accordance with all applicable laws and regulations,
including, without limitation, usury, equal credit opportunity, disclosure
and
recording laws and all applicable anti-predatory lending laws and the terms
of
the related Mortgage Note, the Mortgage and other loan documents;
(iv) there
is
no monetary default existing under any Mortgage or the related Mortgage Note
and
there is no material event which, with the passage of time or with notice
and
the expiration of any grace or cure period, would constitute a default, breach
or event of acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any action
to
waive any default, breach or event of acceleration; and no foreclosure action
is
threatened or has been commenced with respect to the Mortgage Loan;
(v) the
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, (i) if required by
law
in the jurisdiction where the Mortgaged Property is located, or (ii) to protect
the interests of the Trustee on behalf of the Certificateholders;
(vi) no
selection procedure reasonably believed by the Mortgage Loan Seller to be
adverse to the interests of the Certificateholders was utilized in selecting
the
Mortgage Loans;
(vii) each
Mortgage is a valid and enforceable first lien on the property securing the
related Mortgage Note and each Mortgaged Property is owned by the Mortgagor
in
fee simple (except with respect to common areas in the case of condominiums,
PUDs and de minimis PUDs) or by leasehold for a term longer than the term
of the
related Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording
of such
Mortgage, such exceptions being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal obtained in connection
with
the origination of the related Mortgage Loan or referred to in the lender’s
title insurance policy delivered to the originator of the related Mortgage
Loan
and (iii) other matters to which like properties are commonly subject which
do
not materially interfere with the benefits of the security intended to be
provided by such Mortgage;
(viii) there
is
no mechanics’ lien or claim for work, labor or material affecting the premises
subject to any Mortgage which is or may be a lien prior to, or equal with,
the
lien of such Mortgage except those which are insured against by the title
insurance policy referred to in xiii below;
(ix) there
was
no delinquent tax or assessment lien against the property subject to any
Mortgage, except where such lien was being contested in good faith and a
stay
had been granted against levying on the property;
(x) there
is
no valid offset, defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal and
interest on such Mortgage Note;
(xi) the
physical property subject to any Mortgage is free of material damage and
is in
good repair and there is no proceeding pending or threatened for the total
or
partial condemnation of any Mortgaged Property;
(xii) the
Mortgaged Property and all improvements thereon comply with all requirements
of
any applicable zoning and subdivision laws and ordinances;
(xiii) a
lender’s title insurance policy (on an ALTA or CLTA form) or binder, or other
assurance of title customary in the relevant jurisdiction therefor in a form
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, was issued on the date that each
Mortgage Loan was created by a title insurance company which, to the best
of the
Mortgage Loan Seller’s knowledge, was qualified to do business in the
jurisdiction where the related Mortgaged Property is located, insuring the
Mortgage Loan Seller and its successors and assigns that the Mortgage is
a first
priority lien on the related Mortgaged Property in the original principal
amount
of the Mortgage Loan. The Mortgage Loan Seller is the sole insured under
such
lender’s title insurance policy, and such policy, binder or assurance is valid
and remains in full force and effect, and each such policy, binder or assurance
shall contain all applicable endorsements including a negative amortization
endorsement, if applicable; at the time of origination, each Mortgaged Property
was the subject of an appraisal which conformed to the underwriting requirements
of the originator of the Mortgage Loan and, the appraisal is in a form
acceptable to ▇▇▇▇▇▇ Mae or FHLMC;
(xiv) at
the
time of origination, each Mortgaged Property was the subject of an appraisal
which conformed to the underwriting requirements of the originator of the
Mortgage Loan and, the appraisal is in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or
FHLMC;
(xv) the
improvements on each Mortgaged Property securing a Mortgage Loan are insured
(by
an insurer which is acceptable to the Mortgage Loan Seller) against loss
by fire
and such hazards as are covered under a standard extended coverage endorsement
in the locale in which the Mortgaged Property is located, in an amount which
is
not less than the lesser of the maximum insurable value of the improvements
securing such Mortgage Loan or the outstanding principal balance of the Mortgage
Loan, but in no event in an amount less than an amount that is required to
prevent the Mortgagor from being deemed to be a co-insurer thereunder; if
the
improvement on the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the condominium project;
if
upon origination of the related Mortgage Loan, the improvements on the Mortgaged
Property were in an area identified as a federally designated flood area,
a
flood insurance policy is in effect in an amount representing coverage not
less
than the least of (i) the outstanding principal balance of the Mortgage Loan,
(ii) the restorable cost of improvements located on such Mortgaged Property
or
(iii) the maximum coverage available under federal law; and each Mortgage
obligates the Mortgagor thereunder to maintain the insurance referred to
above
at the Mortgagor’s cost and expense;
(xvi) each
Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7)
and (9) without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a “qualified
mortgage” notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1),
(2),
(4), (5), (6), (7) and (9);
(xvii) none
of
the Mortgage Loans are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part
226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation implementing
TILA,
which implements the Home Ownership and Equity Protection Act of 1994, as
amended or (b) “high cost home,” “covered” (excluding home loans defined as
“covered home loans” in the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), “high risk home” or
“predatory” loans under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);
(xviii) the
information set forth in Schedule A of the Prospectus Supplement with respect
to
the Mortgage Loans is true and correct in all material respects;
(xix) no
Mortgage Loan (a) is a “high cost loan” or “covered loan” as applicable (as such
terms are defined in the then current Standard & Poor’s LEVELS® Glossary,
which is now Version 5.6c, Appendix E, attached hereto as Exhibit 6 or (b)
was
originated on or after October 1, 2002 through March 6, 2003 and is governed
by
the Georgia Fair Lending Act;
(xx) each
Mortgage Loan was originated in accordance with the underwriting guidelines
of
the related originator;
(xxi) each
original Mortgage has been recorded or is in the process of being recorded
in
accordance with the requirements of Section 2.01 of the Pooling and Servicing
Agreement in the appropriate jurisdictions wherein such recordation is required
to perfect the lien thereof for the benefit of the Trust Fund;
(xxii) the
related Mortgage File contains each of the documents and instruments listed
in
Section 2.01 of the Pooling and Servicing Agreement,
subject
to any exceptions, substitutions and qualifications as are set forth in such
Section;
(xxiii) the
Mortgage Loans are currently being serviced in accordance with accepted
servicing practices;
(xxiv) with
respect to each Mortgage Loan that has a prepayment penalty feature, each
such
prepayment penalty is enforceable and will be enforced by the Mortgage Loan
Seller and each prepayment penalty is permitted pursuant to federal, state
and
local law, provided that (i) no Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such Mortgage Loan was
originated and (ii) such prepayment penalty is at least equal to the lesser
of
(A) the maximum amount permitted under applicable law and (B) six months
interest at the related Mortgage Interest Rate on the amount prepaid in excess
of 20% of the original principal balance of such Mortgage Loan;
(xxv) if
any of
the Mortgage Loans are secured by a leasehold interest, with respect to each
leasehold interest: the use of leasehold estates for residential properties
is
an accepted practice in the area where the related Mortgaged Property is
located; residential property in such area consisting of leasehold estates
is
readily marketable; the lease is recorded and no party is in any way in breach
of any provision of such lease; the leasehold is in full force and effect
and is
not subject to any prior lien or encumbrance by which the leasehold could
be
terminated or subject to any charge or penalty; and the remaining term of
the
lease does not terminate less than ten years after the maturity date of such
Mortgage Loan; and
(xxvi) each
Mortgage Loan was originated (a) by a savings and loan association, savings
bank, commercial bank, credit union, insurance company or similar institution
that is supervised and examined by a federal or state authority, (b) by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to
Sections 203 and 211 of the National Housing Act, as amended, or (c) by a
mortgage broker or correspondent lender in a manner such that the related
Mortgage Loan would be regarded for purposes of Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended, as having been originated by
an
entity described in clauses (a) or (b) above.
(b) It
is
understood and agreed that the representations and warranties set forth in
this
Section 7 will inure to the benefit of the Purchaser, its successors and
assigns, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or assignment of Mortgage or the examination of any Mortgage
File.
Upon any substitution for a Mortgage Loan, the representations and warranties
set forth above shall be deemed to be made by the Mortgage Loan Seller as
to any
Substitute Mortgage Loan as of the date of substitution.
(c) Upon
discovery or receipt of notice by the Mortgage Loan Seller, the Purchaser
or the
Trustee of a breach of any representation or warranty of the Mortgage Loan
Seller set forth in this Section 7 which materially and adversely affects
the
value of the interests of the Purchaser, the Certificateholders or the Trustee
in any of the Mortgage Loans delivered to the Purchaser pursuant to this
Agreement, the party discovering or receiving notice of such breach shall
give
prompt written notice to the others. It is understood and agreed that a breach
of any one of the representations contained in clauses (xvii) or (xix)(b)
above
will be deemed to materially adversely affect the interests of the related
Certificateholders. In the case of any such breach of a representation or
warranty set forth in this Section 7, within 90 days from the date of discovery
by the Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified
by
the party discovering or receiving notice of such breach (whichever occurs
earlier), the Mortgage Loan Seller will (i) cure such breach in all material
respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase
Price or (iii) if within two years of the Closing Date, substitute a qualifying
Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations
of
the Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the
Certificateholder’s sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect
to
the Mortgage Loans, except for the obligation of the Mortgage Loan Seller
to
indemnify the Purchaser for such breach as set forth in and limited by Section
13 hereof.
(d) Any
cause
of action against the Mortgage Loan Seller or relating to or arising out
of a
breach by the Mortgage Loan Seller of any representations and warranties
made in
this Section 7 shall accrue as to any Mortgage Loan upon (i) discovery of
such
breach by the Mortgage Loan Seller or notice thereof by the party discovering
such breach and (ii) failure by the Mortgage Loan Seller to cure such breach,
purchase such Mortgage Loan or substitute a qualifying Substitute Mortgage
Loan
pursuant to the terms hereof.
SECTION
7. Representations
and Warranties Concerning the Mortgage Loan Seller. As
of the date hereof and as of the Closing Date, the Mortgage Loan Seller
represents and warrants to the Purchaser as to itself in the capacity indicated
as follows:
(i) the
Mortgage Loan Seller (i) is a corporation duly organized, validly existing
and
in good standing under the laws of the State of Delaware and (ii) is qualified
and in good standing to do business in each jurisdiction where such
qualification is necessary, except where the failure so to qualify would
not
reasonably be expected to have a material adverse effect on the Mortgage
Loan
Seller’s business as presently conducted or on the Mortgage Loan Sellers ability
to enter into this Agreement and to consummate the transactions contemplated
hereby;
(ii) the
Mortgage Loan Seller has full corporate power to own its property, to carry
on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) the
execution and delivery by the Mortgage Loan Seller of this Agreement have
been
duly authorized by all necessary action on the part of the Mortgage Loan
Seller;
and neither the execution and delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Mortgage Loan Seller or its properties
or the charter or by-laws of the Mortgage Loan Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Mortgage Loan Seller’s ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the
execution, delivery and performance by the Mortgage Loan Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal
or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given
or
made and, in connection with the recordation of the Mortgages, powers of
attorney or assignments of Mortgages not yet completed;
(v) this
Agreement has been duly executed and delivered by the Mortgage Loan Seller
and,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a valid and binding obligation of the Mortgage Loan Seller enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there
are
no actions, suits or proceedings pending or, to the knowledge of the Mortgage
Loan Seller, threatened against the Mortgage Loan Seller, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Mortgage Loan Seller will
be
determined adversely to the Mortgage Loan Seller and will if determined
adversely to the Mortgage Loan Seller materially and adversely affect the
Mortgage Loan Seller’s ability to perform its obligations under this Agreement;
and the Mortgage Loan Seller is not in default with respect to any order
of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement;
and
(vii) the
Mortgage Loan Seller’s Information (as defined in Section 13(a) hereof) does not
include any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
SECTION
8. Representations
and Warranties Concerning the Purchaser. As
of the date hereof and as of the Closing Date, the Purchaser represents and
warrants to the Mortgage Loan Seller as follows:
(i) the
Purchaser (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and (ii) is qualified and
in
good standing as a foreign corporation to do business in each jurisdiction
where
such qualification is necessary, except where the failure so to qualify would
not reasonably be expected to have a material adverse effect on the Purchaser’s
business as presently conducted or on the Purchaser’s ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(ii) the
Purchaser has full corporate power to own its property, to carry on its business
as presently conducted and to enter into and perform its obligations under
this
Agreement;
(iii) the
execution and delivery by the Purchaser of this Agreement have been duly
authorized by all necessary corporate action on the part of the Purchaser;
and
neither the execution and delivery of this Agreement, nor the consummation
of
the transactions herein contemplated, nor compliance with the provisions
hereof,
will conflict with or result in a breach of, or constitute a default under,
any
of the provisions of any law, governmental rule, regulation, judgment, decree
or
order binding on the Purchaser or its properties or the articles of
incorporation or by-laws of the Purchaser, except those conflicts, breaches
or
defaults which would not reasonably be expected to have a material adverse
effect on the Purchaser’s ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(iv) the
execution, delivery and performance by the Purchaser of this Agreement and
the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices, registrations
or
other actions as have already been obtained, given or made;
(v) this
Agreement has been duly executed and delivered by the Purchaser and, assuming
due authorization, execution and delivery by the Mortgage Loan Seller,
constitutes a valid and binding obligation of the Purchaser enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there
are
no actions, suits or proceedings pending or, to the knowledge of the Purchaser,
threatened against the Purchaser, before or by any court, administrative
agency,
arbitrator or governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter which
in
the judgment of the Purchaser will be determined adversely to the Purchaser
and
will if determined adversely to the Purchaser materially and adversely affect
the Purchaser’s ability to perform its obligations under this Agreement; and the
Purchaser is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially
and
adversely affect the transactions contemplated by this Agreement;
and
(vii) the
Purchaser’s Information (as defined in Section 13(b) hereof) does not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
SECTION
9. Conditions
to Closing.
(a) The
obligations of the Purchaser under this Agreement will be subject to the
satisfaction, on or prior to the Closing Date, of the following
conditions:
(b) Each
of
the obligations of the Mortgage Loan Seller required to be performed at or
prior
to the Closing Date pursuant to the terms of this Agreement shall have been
duly
performed and complied with in all material respects; all of the representations
and warranties of the Mortgage Loan Seller under this Agreement shall be
true
and correct as of the date or dates specified in all material respects; and
no
event shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement, or the Pooling and Servicing
Agreement; and the Purchaser shall have received certificates to that effect
signed by authorized officers of the Mortgage Loan Seller.
(c) The
Purchaser shall have received all of the following closing documents, in
such
forms as are agreed upon and reasonably acceptable to the Purchaser, duly
executed by all signatories (other than the Purchaser) as required pursuant
to
the respective terms thereof:
(i) If
required pursuant to Section 3 hereof, the Amendment dated as of the Closing
Date and any documents referred to therein;
(ii) If
required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule
containing the information set forth on Exhibit 2 hereto, one copy to be
attached to each counterpart of the Amendment;
(iii) The
Pooling and Servicing Agreement, in form and substance reasonably satisfactory
to the Trustee and the Purchaser, and all documents required thereby duly
executed by all signatories;
(iv) A
certificate of an officer of the Mortgage Loan Seller dated as of the Closing
Date, in a form reasonably acceptable to the Purchaser, and attached thereto
the
resolutions of the Mortgage Loan Seller authorizing the transactions
contemplated by this Agreement, together with copies of the charter and by-laws
of the Mortgage Loan Seller;
(v) One
or
more opinions of counsel from the Mortgage Loan Seller’s counsel otherwise in
form and substance reasonably satisfactory to the Purchaser, the Trustee
and
each Rating Agency;
(vi) A
letter
from each of the Rating Agencies giving each Class of Certificates set forth
on
Schedule A the rating set forth on Schedule A; and
(vii) Such
other documents, certificates (including additional representations and
warranties) and opinions as may be reasonably necessary to secure the intended
ratings from each Rating Agency for the Certificates.
(d) The
Certificates to be sold to Bear ▇▇▇▇▇▇▇ pursuant to the Underwriting Agreement
and the Purchase Agreement shall have been issued and sold to Bear
▇▇▇▇▇▇▇.
(e) The
Mortgage Loan Seller shall have furnished to the Purchaser such other
certificates of its officers or others and such other documents and opinions
of
counsel to evidence fulfillment of the conditions set forth in this Agreement
and the transactions contemplated hereby as the Purchaser and its counsel
may
reasonably request.
(f) The
obligations of the Mortgage Loan Seller under this Agreement shall be subject
to
the satisfaction, on or prior to the Closing Date, of the following
conditions:
(g) The
obligations of the Purchaser required to be performed by it on or prior to
the
Closing Date pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects, and all of the
representations and warranties of the Purchaser under this Agreement shall
be
true and correct in all material respects as of the date hereof and as of
the
Closing Date, and no event shall have occurred which would constitute a breach
by it of the terms of this Agreement, and the Mortgage Loan Seller shall
have
received a certificate to that effect signed by an authorized officer of
the
Purchaser.
(h) The
Mortgage Loan Seller shall have received copies of all of the following closing
documents, in such forms as are agreed upon and reasonably acceptable to
the
Mortgage Loan Seller, duly executed by all signatories other than the Mortgage
Loan Seller as required pursuant to the respective terms thereof:
(i) If
required pursuant to Section 3 hereof, the Amendment dated as of the Closing
Date and any documents referred to therein;
(ii) The
Pooling and Servicing Agreement, in form and substance reasonably satisfactory
to the Mortgage Loan Seller, and all documents required thereby duly executed
by
all signatories;
(iii) A
certificate of an officer of the Purchaser dated as of the Closing Date,
in a
form reasonably acceptable to the Mortgage Loan Seller, and attached thereto
the
resolutions of the Purchaser authorizing the transactions contemplated by
this
Agreement and the Pooling and Servicing Agreement, together with copies of
the
Purchaser’s articles of incorporation, and evidence as to the good standing of
the Purchaser dated as of a recent date;
(iv) One
or
more opinions of counsel from the Purchaser’s counsel in form and substance
reasonably satisfactory to the Mortgage Loan Seller;
(v) Such
other documents, certificates (including additional representations and
warranties) and opinions as may be reasonably necessary to secure the intended
rating from each Rating Agency for the Certificates;
SECTION
10. Fees
and Expenses. Subject
to Section 16 hereof, the Mortgage Loan Seller shall pay on the Closing Date
or
such later date as may be agreed to by the Purchaser (i) the fees and expenses
of the Mortgage Loan Seller’s attorneys and the reasonable fees and expenses of
the Purchaser’s attorneys, (ii) the fees and expenses of Deloitte & Touche
LLP, (iii) the fee for the use of Purchaser’s Registration Statement based on
the aggregate original principal amount of the Certificates and the filing
fee
of the Commission as in effect on the date on which the Registration Statement
was declared effective, (iv) the fees and expenses including counsel’s fees and
expenses in connection with any “blue sky” and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the
fees
and expenses of the Trustee (and the fees and disbursements of its counsel)
with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance
at
the Closing and (C) review of the Mortgage Loans to be performed by the
Custodian, (vi) the expenses for printing or otherwise reproducing the
Certificates, the Prospectus and the Prospectus Supplement, (vii) the fees
and
expenses of each Rating Agency (both initial and ongoing), (viii) the fees
and
expenses relating to the preparation and recordation of mortgage assignments
(including intervening assignments, if any and if available, to evidence
a
complete chain of title from the originator to the Trustee) from the Mortgage
Loan Seller to the Trustee or the expenses relating to the Opinion of Counsel
referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage
File
due diligence expenses and other out-of-pocket expenses incurred by the
Purchaser in connection with the purchase of the Mortgage Loans and by Bear
▇▇▇▇▇▇▇ in connection with the sale of the Certificates. The Mortgage Loan
Seller additionally agrees to pay directly to any third party on a timely
basis
the fees provided for above which are charged by such third party and which
are
billed periodically.
SECTION
11. Accountants’
Letters.
(a) Deloitte
& Touche LLP will review the characteristics of a sample of the Mortgage
Loans described in the Final Mortgage Loan Schedule and will compare those
characteristics to the description of the Mortgage Loans contained in the
Prospectus Supplement under the captions “Summary of Prospectus Supplement—The
Mortgage Loans” and “The Mortgage Pool” and in Schedule A thereto. The Mortgage
Loan Seller will cooperate with the Purchaser in making available all
information and taking all steps reasonably necessary to permit such accountants
to complete the review and to deliver the letters required of them under
the
Underwriting Agreement. Deloitte & Touche LLP will also confirm certain
calculations as set forth under the caption “Yield On The Certificates” in the
Prospectus Supplement.
(b) To
the
extent statistical information with respect to the Master Servicer’s or a
Servicer’s servicing portfolio is included in the Prospectus Supplement under
the caption “The Master Servicer and the Servicers,” a letter from the certified
public accountant for the Master Servicer and such Servicer or Servicers
will be
delivered to the Purchaser dated the date of the Prospectus Supplement, in
the
form previously agreed to by the Mortgage Loan Seller and the Purchaser,
with
respect to such statistical information.
SECTION
12. Indemnification.
(a) The
Mortgage Loan Seller shall indemnify and hold harmless the Purchaser and
its
directors, officers and controlling persons (as defined in Section 15 of
the
Securities Act) from and against any loss, claim, damage or liability or
action
in respect thereof, to which they or any of them may become subject, under
the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or
action arises out of, or is based upon (i) any untrue statement of a material
fact contained in the Mortgage
Loan Seller’s Information
as
identified in Exhibit
3,
the
omission to state in the Prospectus Supplement or Prospectus (or any amendment
thereof or supplement thereto approved by the Mortgage Loan Seller and in
which
additional Mortgage Loan Seller’s Information is identified), in reliance upon
and in conformity with Mortgage Loan Seller’s Information a material fact
required to be stated therein or necessary to make the statements therein
in
light of the circumstances in which they were made, not misleading, (ii)
any
representation or warranty assigned or made by the Mortgage Loan Seller in
Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect,
or
(iii) any failure by the Mortgage Loan Seller to perform its obligations
under
this Agreement; and the Mortgage Loan Seller shall reimburse the Purchaser
and
each other indemnified party for any legal and other expenses reasonably
incurred by them in connection with investigating or defending or preparing
to
defend against any such loss, claim, damage, liability or action.
(b) The
foregoing indemnity agreement is in addition to any liability which the Mortgage
Loan Seller otherwise may have to the Purchaser or any other such indemnified
party.
(c) The
Purchaser shall indemnify and hold harmless the Mortgage Loan Seller and
its
respective directors, officers and controlling persons (as defined in Section
15
of the Securities Act) from and against any loss, claim, damage or liability
or
action in respect thereof, to which they or any of them may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue statement
of
a material fact contained in the Purchaser’s
Information
as
identified in Exhibit
4,
the
omission to state in the Prospectus Supplement or Prospectus (or any amendment
thereof or supplement thereto approved by the Purchaser and in which additional
Purchaser’s Information is identified), in reliance upon and in conformity with
the Purchaser’s Information, a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in
which
they were made, not misleading, (ii) any representation or warranty made
by the
Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect,
or
(iii) any failure by the Purchaser to perform its obligations under this
Agreement; and the Purchaser shall reimburse the Mortgage Loan Seller, and
each
other indemnified party for any legal and other expenses reasonably incurred
by
them in connection with investigating or defending or preparing to defend
any
such loss, claim, damage, liability or action. The foregoing indemnity agreement
is in addition to any liability which the Purchaser otherwise may have to
the
Mortgage Loan Seller, or any other such indemnified party,
(d) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if
a
claim in respect thereof is to be made against the indemnifying party under
such
subsection, notify each party against whom indemnification is to be sought
in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 13 except to the extent that it has been prejudiced in
any
material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
it
may elect by written notice delivered to the indemnified party promptly (but,
in
any event, within 30 days) after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their
own
counsel in any such case, but the fees and expenses of such counsel shall
be at
the expense of such indemnified party or parties unless (i) the employment
of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of
such
action within a reasonable time after notice of commencement of the action,
or
(iii) such indemnified party or parties shall have reasonably concluded that
there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of
the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (provided,
however,
that
the indemnifying party shall be liable only for the fees and expenses of
one
counsel in addition to one local counsel in the jurisdiction involved. Anything
in this subsection to the contrary notwithstanding, an indemnifying party
shall
not be liable for any settlement or any claim or action effected without
its
written consent; provided,
however,
that
such consent was not unreasonably withheld.
(e) If
the
indemnification provided for in paragraphs (a) and (b) of this Section 13
shall
for any reason be unavailable to an indemnified party in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
in
Section 13, then the indemnifying party shall in lieu of indemnifying the
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect
thereof, in such proportion as shall be appropriate to reflect the relative
benefits received by the Mortgage Loan Seller on the one hand and the Purchaser
on the other from the purchase and sale of the Mortgage Loans, the offering
of
the Certificates and the other transactions contemplated hereunder. No person
found liable for a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not also found liable for such fraudulent misrepresentation.
(f) The
parties hereto agree that reliance by an indemnified party on any publicly
available information or any information or directions furnished by an
indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.
SECTION
13. Notices. All
demands, notices and communications hereunder shall be in writing but may
be
delivered by facsimile transmission subsequently confirmed in writing. Notices
to the Mortgage Loan Seller shall be directed to EMC Mortgage Corporation,
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇), Attention:
President or General Counsel, and notices to the Purchaser shall be directed
to
Structured Asset Mortgage Investments II Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇
▇▇▇▇ ▇▇▇▇▇ (Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; or to
any
other address as may hereafter be furnished by one party to the other party
by
like notice. Any such demand, notice or communication hereunder shall be
deemed
to have been received on the date received at the premises of the addressee
(as
evidenced, in the case of registered or certified mail, by the date noted
on the
return receipt) provided that it is received on a business day during normal
business hours and, if received after normal business hours, then it shall
be
deemed to be received on the next business day.
SECTION
14. Transfer
of Mortgage Loans. The
Purchaser retains the right to assign the Mortgage Loans and any or all of
its
interest under this Agreement to the Trustee without the consent of the Mortgage
Loan Seller, and, upon such assignment, the Trustee shall succeed to the
applicable rights and obligations of the Purchaser hereunder; provided,
however,
the
Purchaser shall remain entitled to the benefits set forth in Sections 11,
13 and
17 hereto and as provided in Section 2(a). Notwithstanding the foregoing,
the
sole and exclusive right and remedy of the Trustee with respect to a breach
of
representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained
in
Sections 5 and 7 hereof.
SECTION
15. Termination. This
Agreement may be terminated (a) by the mutual consent of the parties hereto
prior to the Closing Date, (b) by the Purchaser, if the conditions to the
Purchaser’s obligation to close set forth under Section 10(a) hereof are not
fulfilled as and when required to be fulfilled or (c) by the Mortgage Loan
Seller, if the conditions to the Mortgage Loan Seller’s obligation to close set
forth under Section 10(b) hereof are not fulfilled as and when required to
be
fulfilled. In the event of termination pursuant to clause (b), the Mortgage
Loan
Seller shall pay, and in the event of termination pursuant to clause (c),
the
Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the
other
in connection with the transactions contemplated by this Agreement. In the
event
of a termination pursuant to clause (a), each party shall be responsible
for its
own expenses.
SECTION
16. Representations,
Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Mortgage Loan Seller submitted
pursuant hereto, shall remain operative and in full force and effect and
shall
survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser
to
the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser,
the Mortgage Loan Seller’s representations and warranties contained herein with
respect to the Mortgage Loans shall be deemed to relate to the Mortgage Loans
actually delivered to the Purchaser and included in the Final Mortgage Loan
Schedule and any Substitute Mortgage Loan and not to those Mortgage Loans
deleted from the Preliminary Mortgage Loan Schedule pursuant to Section 3
hereof
prior to the Closing.
SECTION
17. Severability. If
any provision of this Agreement shall be prohibited or invalid under applicable
law, the Agreement shall be ineffective only to such extent, without
invalidating the remainder of this Agreement.
SECTION
18. Counterparts. This
Agreement may be executed in counterparts, each of which will be an original,
but which together shall constitute one and the same agreement.
SECTION
19. Amendment. This
Agreement cannot be amended or modified in any manner without the prior written
consent of each party.
SECTION
20. GOVERNING
LAW. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS,
RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
SECTION
21. Further
Assurances. Each
of the parties agrees to execute and deliver such instruments and take such
actions as another party may, from time to time, reasonably request in order
to
effectuate the purpose and to carry out the terms of this Agreement including
any amendments hereto which may be required by either Rating
Agency.
SECTION
22. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Mortgage Loan Seller and the Purchaser and their permitted successors and
assigns and, to the extent specified in Section 13 hereof, Bear ▇▇▇▇▇▇▇,
and
their directors, officers and controlling persons (within the meaning of
federal
securities laws). The Mortgage Loan Seller acknowledges and agrees that the
Purchaser may assign its rights under this Agreement (including, without
limitation, with respect to the Mortgage Loan Seller’s representations and
warranties respecting the Mortgage Loans) to the Trustee. Any person into
which
the Mortgage Loan Seller may be merged or consolidated (or any person resulting
from any merger or consolidation involving the Mortgage Loan Seller), any
person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered
the
“successor” of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further
act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences and in Section 15 hereto this Agreement cannot be assigned, pledged
or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment
shall
be deemed null and void.
SECTION
23. The
Mortgage Loan Seller and the Purchaser.
The
Mortgage Loan Seller and the Purchaser will keep in full effect all rights
as
are necessary to perform their respective obligations under this
Agreement.
SECTION
24. Entire
Agreement.
This
Agreement contains the entire agreement and understanding between the parties
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof.
SECTION
25. No
Partnership. Nothing
herein contained shall be deemed or construed to create a partnership or
joint
venture between the parties hereto.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto
by their respective duly authorized officers as of the date first above
written.
EMC
MORTGAGE CORPORATION
By:
____________________________________________
Name:
Title:
STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.
By:
____________________________________________
Name: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Title: Vice
President
EXHIBIT
1
CONTENTS
OF MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser
or its
designee, and which shall be delivered to the Purchaser or its designee pursuant
to the terms of the Agreement.
Section
4.6. with
respect to each Mortgage Loan:
(a) The
original Mortgage Note, endorsed without recourse to the order of the Trustee
and showing an unbroken chain of endorsements from the originator thereof
to the
Person endorsing it to the Trustee, or a lost note affidavit together with
a
copy of the related Mortgage Note;
(b) The
original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting
the
presence of the MIN and language indicating that such Mortgage Loan is a
MOM
Loan, which shall have been recorded (or if the original is not available,
a
copy), with evidence of such recording indicated thereon (or if the original
is
not available, a copy), with evidence of such recording indicated thereon
(or if
the original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will,
upon
receipt of recording information relating to the Security Instrument required
to
be included thereon, be delivered to recording offices for recording and
have
not been returned to the Seller in time to permit their recording as specified
in Section 2.01(b) of the Pooling and Servicing Agreement, shall be in
recordable form);
(c) unless
the Mortgage Loan is a MOM Loan, a certified copy of the assignment (which
may
be in the form of a blanket assignment if permitted in the jurisdiction in
which
the Mortgaged Property is located) to “U.S. Bank National Association, as
Trustee”, with evidence of recording with respect to each Mortgage Loan in the
name of the Trustee thereon (or if (A) the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have
been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to
the
Seller in time to permit their delivery as specified in Section 2.01(b) of
the
Pooling and Servicing Agreement, the Seller may deliver a true copy thereof
with
a certification by the Seller, on the face of such copy, substantially as
follows: “Certified to be a true and correct copy of the original, which has
been transmitted for recording” or (B) the related Mortgaged Property is located
in a state other than Maryland and an Opinion of Counsel has been provided
as
set forth in Section 2.01(b) of the Pooling and Servicing Agreement, shall
be in
recordable form);
(d) all
intervening assignments of the Security Instrument, if applicable and only
to
the extent available to the Mortgage Loan Seller with evidence of recording
thereon;
(e) the
original or a copy of the policy or certificate of primary mortgage guaranty
insurance, to the extent available, if any;
(f) the
original policy of title insurance or mortgagee’s certificate of title insurance
or commitment or binder for title insurance; and
(g) originals
of all modification agreements, if applicable and available.
EXHIBIT
2
MORTGAGE
LOAN SCHEDULE INFORMATION
The
Preliminary and Final Mortgage Loan Schedules shall set forth the following
information with respect to each Mortgage Loan:
|
(a)
|
the
loan number;
|
|
(b)
|
[Reserved];
|
|
(c)
|
the
city, state and zip code of the Mortgaged
Property;
|
|
(d)
|
the
property type;
|
|
(e)
|
the
Mortgage Interest Rate;
|
|
(f)
|
the
Servicing Fee Rate;
|
|
(g)
|
the
Net Rate;
|
|
(h)
|
the
original term;
|
|
(i)
|
the
maturity date;
|
|
(j)
|
the
stated remaining term to maturity;
|
|
(k)
|
the
original principal balance;
|
|
(1)
|
the
first payment date;
|
|
(m)
|
the
principal and interest payment in effect as of the Cut-off
Date;
|
|
(n)
|
the
unpaid principal balance as of the Cut-off
Date;
|
|
(o)
|
the
Loan-to-Value Ratio at origination;
|
|
(p)
|
paid-through
date;
|
|
(q)
|
the
insurer of any Primary Mortgage Insurance
Policy;
|
|
(r)
|
the
Gross Margin, if applicable;
|
|
(s)
|
the
Maximum Lifetime Mortgage Rate, if
applicable;
|
|
(t)
|
the
Minimum Lifetime Mortgage Rate, if
applicable;
|
|
(u)
|
the
Periodic Rate Cap, if applicable;
|
|
(v)
|
the
number of days delinquent, if any;
|
|
(w)
|
which
Mortgage Loans adjust after an initial fixed-rate period of three,
five,
seven or ten years;
|
|
(x)
|
the
Loan Group;
|
|
(y)
|
the
Prepayment Charge Loans; and
|
|
(z)
|
the
Servicer.
|
Such
schedule also shall set forth for all of the Mortgage Loans, the total number
of
Mortgage Loans, the total of each of the amounts described under (k) and
(n)
above, the weighted average by principal balance as of the Cut-off Date of
each
of the rates described under (e), (f) and (g) above, and the weighted average
remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
EXHIBIT
3
MORTGAGE
LOAN SELLER’S INFORMATION
All
information in the Prospectus Supplement described under the following Sections:
“SUMMARY OF PROSPECTUS SUPPLEMENT — The Mortgage Loans,” “THE MORTGAGE POOL” and
“SCHEDULE A — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS.”
EXHIBIT
4
PURCHASER’S
INFORMATION
All
information in the Prospectus Supplement and the Prospectus, except the Mortgage
Loan Seller’s Information.
EXHIBIT
5
SCHEDULE
OF LOST NOTES
Available
Upon Request
EXHIBIT
6
APPENDIX
E - STANDARD & POOR’S ANTI PREDATORY LENDING CATEGORIZATION
REVISED
August 1, 2005
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 Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Arkansas
|
Arkansas
Home Loan Protection Act, Ark. Code ▇▇▇. §§ ▇▇-▇▇-▇▇▇ et seq.
Effective
July 16, 2003
|
High
Cost Home Loan
|
|
Cleveland
Heights, OH
|
Ordinance
No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.
Effective
June 2, 2003
|
Covered
Loan
|
|
Colorado
|
Consumer
Equity Protection, Colo. Stat. ▇▇▇. §§ 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
|
Covered
Loan
|
|
Connecticut
|
Connecticut
Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746
et seq.
Effective
October 1, 2001
|
High
Cost Home Loan
|
|
District
of Columbia
|
Home
Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.
Effective
for loans closed on or after January 28, 2003
|
Covered
Loan
|
|
Florida
|
Fair
Lending Act, Fla. Stat. ▇▇▇. §§ 494.0078 et seq.
Effective
October 2, 2002
|
High
Cost Home Loan
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code ▇▇▇. §§ 7-6A-1 et seq.
|
High
Cost Home Loan
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
|
Effective
October 1, 2002 - March 6, 2003
|
|
|
Georgia
as amended (Mar. 7, 2003 - current)
|
Georgia
Fair Lending Act, Ga. Code ▇▇▇. §§ 7-6A-1 et seq.
Effective
for loans closed on or after March 7, 2003
|
High
Cost Home Loan
|
|
HOEPA
Section 32
|
Home
Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R.
§§ 226.32 and 226.34
Effective
October 1, 1995, amendments October 1, 2002
|
High
Cost Loan
|
|
Illinois
|
High
Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq.
Effective
January 1, 2004 (prior to this date, regulations under Residential
Mortgage License Act effective from May 14, 2001)
|
High
Risk Home Loan
|
|
Kansas
|
Consumer
Credit Code, Kan. Stat. ▇▇▇. §§ 16a-1-101 et seq.
Sections
16a-1-301 and 16a-3-207 became effective April 14, 1999; Section
16a-3-308a became effective July 1, 1999
|
High
Loan to Value Consumer Loan (id. § 16a-3-207) and;
|
|
High
APR Consumer Loan (id. § 16a-3-308a)
|
||
|
Kentucky
|
2003
KY H.B. ▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇. Rev. Stat. §§ 360.100
et seq.
Effective
June 24, 2003
|
High
Cost Home Loan
|
|
Maine
|
Truth
in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.
Effective
September 29, 1995 and as amended from time to time
|
High
Rate High Fee Mortgage
|
|
Massachusetts
|
Part
40 and Part 32, 209 C.M.R. §§ 32.00 et seq.
and 209 C.M.R. §§ 40.01 et seq.
|
High
Cost Home Loan
|
STANDARD
& POOR’S HIGH COST LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
|
Effective
March 22, 2001 and amended from time to time
|
|
|
Nevada
|
Assembly
▇▇▇▇ No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.
Effective
October 1, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
for loans closed on or after November 27, 2003
|
High
Cost Home Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
High
Cost Home Loan
|
|
New
York
|
N.Y.
Banking Law Article 6-l
Effective
for applications made on or after April 1, 2003
|
High
Cost Home Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
High
Cost Home Loan
|
|
Ohio
|
H.B.
386 (codified in various sections of the Ohio Code), Ohio Rev.
Code ▇▇▇.
§§ 1349.25 et seq.
Effective
May 24, 2002
|
Covered
Loan
|
|
Oklahoma
|
Consumer
Credit Code (codified in various sections of Title 14A)
Effective
July 1, 2000; amended effective January 1, 2004
|
Subsection
10 Mortgage
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code
|
High
Cost Home Loan
|
STANDARD
& POOR’S HIGH COST LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
▇▇▇.
§§ 37-23-10 et seq.
Effective
for loans taken on or after January 1, ▇▇▇▇
|
|
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇▇ Residential Mortgage Lender, Broker and Servicer Act,
W. Va. Code
▇▇▇. §§ 31-17-1 et seq.
Effective
June 5, ▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇▇ Mortgage Loan Act Loan
|
STANDARD
& POOR’S COVERED LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code ▇▇▇. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Covered
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
November 27, 2003 - July 5, 2004
|
Covered
Home Loan
|
STANDARD
& POOR’S HOME LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code ▇▇▇. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security
|
Home
Loan
|
STANDARD
& POOR’S HOME LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Act
of 2002, 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. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
Home
Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
Consumer
Home Loan
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code ▇▇▇.
§§ 37-23-10
et seq.
Effective
for loans taken on or after January 1, 2004
|
Consumer
Home Loan
|
SCHEDULE
A
REQUIRED
RATINGS FOR EACH CLASS OF CERTIFICATES
Public
Certificates
|
Class
|
S&P
|
Fitch
|
|
Class
I-A-1
|
AAA
|
AAA
|
|
Class
I-A-2
|
AAA
|
AAA
|
|
Class
II-A-1
|
AAA
|
AAA
|
|
Class
II-A-2
|
AAA
|
AAA
|
|
Class
II-X
|
AAA
|
AAA
|
|
Class
III-A-1
|
AAA
|
AAA
|
|
Class
III-A-2
|
AAA
|
AAA
|
|
Class
III-A-3
|
AAA
|
AAA
|
|
Class
III-X
|
AAA
|
AAA
|
|
Class
IV-A-1
|
AAA
|
AAA
|
|
Class
IV-A-2
|
AAA
|
AAA
|
|
Class
R-I
|
AAA
|
AAA
|
|
Class
R-II
|
AAA
|
AAA
|
|
Class
R-III
|
AAA
|
AAA
|
|
Class
B-1
|
NR
|
AA
|
|
Class
B-2
|
NR
|
A
|
|
Class
B-3
|
NR
|
BBB
|
None
of
the above ratings has been lowered since the respective dates of such
letters.
Private
Certificates
|
Class
|
S&P
|
Fitch
|
|
Class
B-4
|
NR
|
BB
|
|
Class
▇-▇
|
▇▇
|
▇
|
|
▇▇▇▇▇
▇-▇
|
▇▇
|
▇▇
|
▇▇▇▇
of
the above ratings has been lowered since the respective dates of such
letters.
SCHEDULE
B
MORTGAGE
LOAN SCHEDULE
[Provided
upon request]
EXHIBIT
K
[RESERVED]
EXHIBIT
L
EXHIBIT
L
FORM
OF
CERTIFICATION TO BE
PROVIDED
BY THE SECURITIES ADMINISTRATOR TO DEPOSITOR
Re:
________________________________
Trust 200_-____(the “Trust”), Mortgage Pass-Through Certificates, Series
200_-____, issued pursuant to the Pooling and Servicing Agreement, dated
as of
________ 1, 200_, among ____________________________, as Depositor, ▇▇▇▇▇
Fargo
Bank, National Association, as Securities Administrator and
________________________________________________________________________________________________________________________________________
The
Securities Administrator hereby certifies to the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will
rely
upon this certification, that:
(1) I
have
reviewed the annual report on Form 10-K for the fiscal year [____] (the “Annual
Report”), and all reports on Form 10-D required to be filed in respect of period
covered by the Annual Report (collectively with the Annual Report, the
“Reports”), of the Trust;
(2) To
my
knowledge, (a) the Reports, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the Annual
Report, and (b) the Securities Administrator’s assessment of compliance and
related attestation report referred to below, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which
such statements were made, not misleading with respect to the period covered
by
such assessment of compliance and attestation report;
(3) To
my
knowledge, the distribution information required to be provided by the
Securities Administrator under the Pooling and Servicing Agreement for inclusion
in the Reports is included in the Reports;
(4) I
am
responsible for reviewing the activities performed by the Securities
Administrator under the Pooling and Servicing Agreement, and based on my
knowledge and the compliance review conducted in preparing the compliance
statement of the Securities Administrator required by the Pooling and Servicing
Agreement, and except as disclosed in the Reports, the Securities Administrator
has fulfilled its obligations under the Pooling and Servicing Agreement in
all
material respects; and
(5) The
report on assessment of compliance with servicing criteria applicable to
the
Securities Administrator for asset-backed securities of the Securities
Administrator and each Subcontractor utilized by the Securities Administrator
and related attestation report on assessment of compliance with servicing
criteria applicable to it required to be included in the Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and
15d-18 has been included as an exhibit to the Annual Report. Any material
instances of non-compliance are described in such report and have been disclosed
in the Annual Report.
In
giving
the certifications above, the Securities Administrator has reasonably relied
on
information provided to it by the following unaffiliated parties: [names
of
servicer(s), master servicer, subservicer, depositor, trustee,
custodian(s)]
Date:_______________________________
___________________________________
[Signature]
[Title]
EXHIBIT
M
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Definitions
Primary
Servicer - transaction party having borrower contact
Master
Servicer - aggregator of pool assets
Securities
Administrator - waterfall calculator
Back-up
Servicer - named in the transaction (in the event a Back up Servicer becomes
the
Primary Servicer, follow Primary Servicer obligations)
Custodian
- safe keeper of pool assets
Trustee
-
fiduciary of the transaction
Note:
The
definitions above describe the essential function that the party performs,
rather than the party’s title. So, for example, in a particular transaction, the
trustee may perform the “paying agent” and “securities administrator” functions,
while in another transaction, the securities administrator may perform these
functions.
Where
there are multiple checks for criteria the attesting party will identify
in
their management assertion that they are attesting only to the portion of
the
distribution chain they are responsible for in the related transaction
agreements.
Key: X
- obligation
[X]
- under consideration for obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Trustee
(nominal)
|
|
|
General
Servicing Considerations
|
|||||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
X
|
|
|
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets are maintained.
|
|
|
|
|
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
X
|
|
|
|
|
|
|
Cash
Collection and Administration
|
|
|
|
|
|
|
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
X
|
X
|
|
||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|
X
|
|
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
X
|
X
|
|
|
|
|
|
Investor
Remittances and Reporting
|
|
|
|
|
|
|
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of Pool Assets serviced by the Servicer.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
X
|
X
|
|
|
|
|
|
Pool
Asset Administration
|
|
|
|
|
|
|
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
|
|
X
|
|
|
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
|
|
X
|
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
|
X
|
|
|
|
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with
the related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance
with the
related pool asset documents.
|
X
|
|
|
|
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|
|
|
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
X
|
|
|
||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
X
|
|
|
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|
|
|
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
|
|
|
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in
the
transaction agreements; (B) interest on such funds is paid, or
credited,
to obligors in accordance with applicable pool asset documents
and state
laws; and (C) such funds are returned to the obligor within 30
calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
|
|
|
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
|
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
|
|
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
|
|
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
|
|
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements. (In this transaction there is no external
enhancement or other support.)
|
X
|
|
X
|
|
||
EXHIBIT
N
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party
shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant
to
Section 4.18 of the Pooling and Servicing Agreement.
Under
Item 1 of Form 10-D: a) items marked “Monthly Statement to Certificateholders”
are required to be included in the periodic Distribution Date statement under
Section 6.06, provided by the Securities Administrator based on information
received from the party providing such information; and b) items marked “Form
10-D report” are required to be in the Form 10-D report but not the Monthly
Statements to Certificateholders, provided by the party indicated. Information
under all other Items of Form 10-D is to be included in the Form 10-D report.
All such information and any other Items on Form 8-K and Form 10-D set forth
in
this Exhibit shall be sent to the Securities Administrator and the
Depositor.
|
Form
|
Item
|
Description
|
Servicers
|
Master
Servicer
|
Securities
Administrator
|
Custodian
|
Trustee
|
Depositor
|
Sponsor
|
|
|
10-D
|
Must
be filed within 15 days of the distribution date for the asset-backed
securities.
|
|
(nominal)
|
|
|
|||||
|
1
|
Distribution
and Pool Performance Information
|
|
|
|
|
|
|
|
||
|
Item
1121(a) - Distribution and Pool Performance
Information
|
|
|
|
|
|
|
|
|||
|
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating distributions and actual distribution dates for the
distribution period.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(2)
Cash flows received and the sources thereof for distributions,
fees and
expenses.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(i)
Fees or expenses accrued and paid, with an identification of the
general
purpose of such fees and the party receiving such fees or
expenses.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(ii)
Payments accrued or paid with respect to enhancement or other support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of
the general
purpose of such payments and the party receiving such
payments.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(iii)
Principal, interest and other distributions accrued and paid on
the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(6)
Beginning and ending balances of transaction accounts, such as
reserve
accounts, and material account activity during the period.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(7)
Any amounts drawn on any credit enhancement or other support identified
in
Item 1114 of Regulation AB, as applicable, and the amount of coverage
remaining under any such enhancement, if known and
applicable.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(8)
Number and amount of pool assets at the beginning and ending of
each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
|
|||
|
(9)
Delinquency and loss information for the period.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
|
|
|
|
|
|
|||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of funds
advanced and the general source of funds for
reimbursements.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(11)
Any material modifications, extensions or waivers to pool asset
terms,
fees, penalties or payments during the distribution period or that
have
cumulatively become material over time.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
X
|
X
|
X
(if
agreed upon by the parties)
|
|
|
X
|
|
|||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger and
whether
the trigger was met.
|
|
|
X
(Monthly
Statements to Certificateholders)
|
|
|
|
|
|||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
|
|
|
|
|
|
X
|
||||
|
information
regarding any pool asset changes (other than in connection with
a pool
asset converting into cash in accordance with its terms), such
as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
|
X
|
X
|
X
|
|
|
X
|
||||
|
Disclose
any material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or pool selection criteria or procedures,
as
applicable, used to originate, acquire or select the new pool
assets.
|
|
|
|
|
|
X
|
X
|
|||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
|
|
|
|
|
X
|
|
|||
|
2
|
Legal
Proceedings
|
|
|
|
|
|
|
|
||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
|
|
|
|
|
|
|
|||
|
Sponsor
(Seller)
|
|
|
|
|
|
|
X
|
|||
|
Depositor
|
|
|
|
|
|
X
|
|
|||
|
Trustee
|
|
|
|
|
|
|
|
|||
|
Issuing
entity
|
|
|
|
|
|
X
|
|
|||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
|
|
|
|
|
|||
|
Securities
Administrator
|
|
|
X
|
|
|
|
|
|||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
|
|
|
|
|
X
|
|
|||
|
Custodian
|
|
|
|
X
|
|
|
|
|||
|
3
|
Sales
of Securities and Use of Proceeds
|
|
|
|
|
|
|
|
||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or
issuing
entity, that are backed by the same asset pool or are otherwise
issued by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing
information
can be omitted if securities were not registered.
|
|
|
|
|
|
X
|
|
|||
|
4
|
Defaults
Upon Senior Securities
|
|
|
|
|
|
|
|
||
|
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)
|
|
|
X
|
|
|
|
|
|||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|
|
|
|
|
|
|
||
|
Information
from Item 4 of Part II of Form 10-Q
|
|
|
X
|
|
|
|
|
|||
|
6
|
Significant
Obligors of Pool Assets
|
|
|
|
|
|
|
|
||
|
Item
1112(b) - Significant
Obligor Financial Information*
|
|
|
|
|
|
X
|
|
|||
|
*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.
|
|
|
|
|
|
|
|
|||
|
7
|
Significant
Enhancement Provider Information
|
|
|
|
|
|
|
|
||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
|
|
|
|
|
|
|
|
|||
|
Determining
applicable disclosure threshold
|
|
|
|
|
|
X
|
|
|||
|
Obtain
required financial information or effecting incorporation by
reference
|
|
|
|
|
|
X
|
|
|||
|
Item
1115(b) - Derivative Counterparty Financial
Information*
|
|
|
|
|
|
|
|
|||
|
Determining
current maximum probable exposure
|
|
|
|
|
|
X
|
|
|||
|
Determining
current significance percentage
|
|
|
X
|
|
|
|
|
|||
|
Notify
derivative counterparty of significance percentage and request
required
financial information
|
|
|
X
|
|
|
|
|
|||
|
Obtain
required financial information or effecting incorporation by
reference
|
|
|
|
|
|
X
|
|
|||
|
*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.
|
|
|
|
|
|
|
|
|||
|
8
|
Other
Information
|
|
|
|
|
|
|
|
||
|
Disclose
any information required to be reported on Form 8-K during the
period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below.
|
|||||||||
|
9
|
Exhibits
|
|
|
|
|
|
|
|
||
|
Distribution
report
|
|
|
X
|
|
|
|
|
|||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
|
|
|
|
|
X
|
||||
|
8-K
|
Must
be filed within four business days of an event reportable on Form
8-K.
|
|
|
|
|
|||||
|
1.01
|
Entry
into a Material Definitive Agreement
|
|
|
|
|
|
|
|
||
|
Disclosure
is required regarding entry into or amendment of any definitive
agreement
that is material to the securitization, even if depositor is not
a party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are fully
disclosed in the prospectus
|
X
|
X
|
X
|
|
|
X
|
X
|
|||
|
1.02
|
Termination
of a Material Definitive Agreement
|
X
|
X
|
X
|
|
|
X
|
X
|
||
|
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.
|
|
|
|
|
|
|
|
|||
|
1.03
|
Bankruptcy
or Receivership
|
|
|
|
|
|
|
|
||
|
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Master Servicer, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
X
|
X
|
X
|
|
X
|
X
|
|||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|
|
|
|
|
|
|
||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are
disclosed
in the Monthly Statement to Certificateholders
|
|
X
|
X
|
|
|
|
|
|||
|
3.03
|
Material
Modification to Rights of Security Holders
|
|
|
|
|
|
|
|
||
|
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
|
|
X
|
|
|
X
|
|
|||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|
|
|
|
|
|
|
||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
|
|
|
|
|
X
|
|
|||
|
5.06
|
Change
in Shell Company Status
|
|
|
|
|
|
|
|
||
|
[Not
applicable to ABS issuers]
|
|
|
|
|
|
X
|
|
|||
|
6.01
|
ABS
Informational and Computational Material
|
|
|
|
|
|
|
|
||
|
[Not
included in reports to be filed under Section 3.18]
|
|
|
|
|
|
X
|
|
|||
|
6.02
|
Change
of Servicer or 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, certificate
administrator or trustee.
|
X
|
X
|
X
|
|
|
X
|
|
|||
|
|
Reg
AB disclosure about any new servicer is also required.
|
X
|
|
|
|
|
|
|
||
|
Reg
AB disclosure about any new trustee is also required.
|
|
|
|
|
X
(to
the extent of a new trustee)
|
|
|
|||
|
Reg
AB disclosure about any new securities administrator is also
required.
|
|
|
X
|
|
|
|
|
|||
|
6.03
|
Change
in Credit Enhancement or Other External Support [In this transaction
there
is no external enhancement or other support.]
|
|
|
|
|
|
|
|
||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as derivatives.
|
|
|
X
|
|
|
X
|
|
|||
|
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
|
|
X
|
|
|
X
|
|
||
|
6.04
|
Failure
to Make a Required Distribution
|
|
|
X
|
|
|
|
|
||
|
6.05
|
Securities
Act Updating Disclosure
|
|
|
|
|
|
|
|
||
|
If
any material pool characteristic differs by 5% or more at the time
of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
|
|
|
|
|
X
|
|
|||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
|
|
|
|
|
X
|
|
|||
|
7.01
|
Regulation
FD Disclosure
|
X
|
X
|
X
|
X
|
|
X
|
|
||
|
8.01
|
Other
Events
|
|
|
|
|
|
|
|
||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to security
holders.
|
|
|
|
|
|
X
|
|
|||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Party applicable to reportable event.
|
||||||||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
|
|
|
|
|||||
|
9B
|
Other
Information
|
|
|
|
|
|
|
|
||
|
|
|
Disclose
any information required to be reported on Form 8-K during the
fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
above.
|
|||||||
|
|
15
|
Exhibits
and Financial Statement Schedules
|
|
|
|
|
|
|
|
|
|
Item
1112(b) - Significant
Obligor Financial Information
|
|
|
|
|
|
X
|
|
|||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
|
|
|
|
|
|
|
|||
|
Determining
applicable disclosure threshold
|
|
|
|
|
|
X
|
|
|||
|
Obtain
required financial information or effecting incorporation by
reference
|
|
|
|
|
|
X
|
|
|||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
|
|
|
|
|
|
|
|||
|
Determining
current maximum probable exposure
|
|
|
|
|
|
X
|
|
|||
|
|
|
Determining
current significance percentage
|
|
|
X
|
|
|
|
|
|
|
Notify
derivative counterparty of significance percentage and request
required
financial information
|
|
|
X
|
|
|
|
|
|||
|
Obtain
required financial information or effecting incorporation by
reference
|
|
|
|
|
|
X
|
|
|||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
|
|
|
|
|
|
|
|||
|
Sponsor
(Seller)
|
|
|
|
|
|
|
X
|
|||
|
Depositor
|
|
|
|
|
|
X
|
|
|||
|
Trustee
|
|
|
|
|
|
|
|
|||
|
Issuing
entity
|
|
|
|
|
|
X
|
|
|||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
|
|
|
|
|
|||
|
Securities
Administrator
|
|
|
X
|
|
|
|
|
|||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
|
|
|
|
|
X
|
|
|||
|
Custodian
|
|
|
|
X
|
|
|
|
|||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
|
|
|
|
|
|
|
|||
|
Sponsor
(Seller)
|
|
|
|
|
|
|
X
|
|||
|
Depositor
|
|
|
|
|
|
X
|
|
|||
|
Trustee
|
|
|
|
|
|
|
|
|||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
|
|
|
|
|
|||
|
Securities
Administrator
|
|
|
X
|
|
|
|
|
|||
|
Originator
|
|
|
|
|
|
X
|
|
|||
|
Custodian
|
|
|
|
X
|
|
|
|
|||
|
Credit
Enhancer/Support Provider
|
|
|
|
|
|
X
|
|
|||
|
Significant
Obligor
|
|
|
|
|
|
X
|
|
|||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
X
|
X
|
|
|
|
|||
|
Item
1123 - Servicer Compliance Statement
|
X
|
X
|
|
|
|
|
||||
EXHIBIT
O
Additional
Disclosure Notification
▇▇▇▇▇
Fargo Bank, N.A. as [Securities Administrator]
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn:
Corporate Trust Services - BSARM 2006-2-SEC REPORT PROCESSING
RE:
**Additional Form [ ] Disclosure**Required
Ladies
and Gentlemen:
In
accordance with Section 4.18 of the Pooling and Servicing Agreement, dated
as of
May 1, 2006, among Structured Asset Mortgage Investments II Inc., a Delaware
corporation, as depositor (the “Depositor”), U.S. Bank National Association, a
national banking association, as trustee (the “Trustee”), ▇▇▇▇▇ Fargo Bank,
N.A., as master servicer (in such capacity, the “Master Servicer”) and as
securities administrator (in such capacity, the “Securities Administrator”), and
EMC Mortgage Corporation, as seller (in such capacity, the “Seller”). The
undersigned 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: