EXECUTION COPY
MORTGAGE ASSET SECURITIZATION
TRANSACTIONS, INC.,
Depositor
UBS REAL ESTATE SECURITIES INC.,
Transferor
WELLS FARGO BANK, N.A.,
Master Servicer, Trust Administrator and Custodian
U.S. BANK NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
MASTR ALTERNATIVE LOAN TRUST
2006-1
MORTGAGE PASS-THROUGH CERTIFICATES,
Series 2006-1
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01
Definitions.
6
Section 1.02
Certain Calculations.
44
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01
Conveyance of Mortgage Loans.
44
Section 2.02
Acceptance by Trustee of the Mortgage
Loans.
48
Section 2.03
Remedies for Breaches of Representations
and Warranties.
50
Section 2.04
Representations and Warranties of the
Depositor as to the Mortgage Loans.
53
Section 2.05
[Reserved].
53
Section 2.06
Execution and Delivery of
Certificates.
53
Section 2.07
REMIC Matters.
53
Section 2.08
Covenants of the Master
Servicer.
53
Section 2.09
Representations and Warranties of the
Master Servicer.
54
Section 2.10
Representations and Warranties of the
Custodian.
55
ARTICLE III
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
Section 3.01
Master Servicing of Mortgage
Loans.
56
Section 3.02
Monitoring of Servicers.
57
Section 3.03
[Reserved].
59
Section 3.04
Rights of the Depositor and the Trustee
in Respect of the Master Servicer.
59
Section 3.05
Trustee to Act as Master
Servicer.
59
Section 3.06
Protected Accounts.
60
Section 3.07
Collection of Mortgage Loan Payments;
Collection Account; Distribution Account;
Cap Reserve Fund.
61
Section 3.08
Collection of Taxes, Assessments and
Similar Items; Escrow Accounts.
64
Section 3.09
Access to Certain Documentation and
Information Regarding the Mortgage Loans.
64
Section 3.10
Permitted Withdrawals from the Collection
Account and Distribution Account.
65
Section 3.11
Maintenance of Hazard Insurance;
Maintenance of Primary Insurance Policies.
67
Section 3.12
Presentment of Claims and Collection of
Proceeds.
67
Section 3.13
Maintenance of the Primary Insurance
Policies.
68
Section 3.14
Realization upon Defaulted Mortgage
Loans.
68
Section 3.15
REO Property.
68
Section 3.16
Due-on-Sale Clauses; Assumption
Agreements.
70
Section 3.17
Trustee to Cooperate; Release of Mortgage
Files.
70
Section 3.18
Documents, Records and Funds in
Possession of Master Servicer and Custodian to Be
Held for the Trustee.
71
Section 3.19
Master Servicing Compensation.
71
Section 3.20
Access to Certain
Documentation.
71
Section 3.21
Report on Assessment of Compliance and
Attestation.
71
Section 3.22
Report on Assessment of Compliance and
Attestation.
72
Section 3.23
Errors and Omissions Insurance; Fidelity
Bonds.
75
Section 3.24
Master Servicer to Remit Prepayment
Penalties to the Transferor.
75
ARTICLE IV
DISTRIBUTIONS AND SERVICING ADVANCES
Section 4.01
Advances.
76
Section 4.02
Priorities of Distribution.
76
Section 4.03
Allocation of Realized Losses.
79
Section 4.04
Distribution Date Statements to
Certificateholders.
82
Section 4.05
Determination of LIBOR
84
Section 4.06
Cap Payments.
85
ARTICLE V
THE CERTIFICATES
Section 5.01
The Certificates.
87
Section 5.02
Certificate Register; Registration of
Transfer and Exchange of Certificates.
87
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates.
93
Section 5.04
Persons Deemed Owners.
93
Section 5.05
Access to List of
Certificateholders’ Names and Addresses.
94
Section 5.06
Maintenance of Office or
Agency.
94
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE CUSTODIAN
Section 6.01
Respective Liabilities of the Depositor,
the Master Servicer and the Custodian.
94
Section 6.02
Merger or Consolidation of the Depositor,
the Master Servicer and the Custodian.
94
Section 6.03
Limitation on Liability of the Depositor,
the Transferor, the Master Servicer, the
Custodian and Others.
95
Section 6.04
Limitation on Resignation of Master
Servicer.
96
Section 6.05
Sale and Assignment of Master Servicing
Rights.
96
Section 6.06
Fees of the Custodian.
96
ARTICLE VII
DEFAULT
Section 7.01
Events of Default.
97
Section 7.02
Trustee to Act; Appointment of
Successor.
99
Section 7.03
Notification to
Certificateholders.
100
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01
Duties of Trustee.
100
Section 8.02
Certain Matters Affecting the
Trustee.
102
Section 8.03
Trustee Not Liable for Certificates or
Mortgage Loans.
104
Section 8.04
Trustee May Own Certificates.
104
Section 8.05
Trustee’s Fees and
Expenses.
104
Section 8.06
Eligibility Requirements for
Trustee.
105
Section 8.07
Resignation and Removal of
Trustee.
105
Section 8.08
Successor Trustee.
106
Section 8.09
Merger or Consolidation of
Trustee.
106
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.
107
ARTICLE IX
CONCERNING THE TRUST ADMINISTRATOR AND THE MASTER
SERVICER
Section 9.01
Duties of Trust Administrator.
108
Section 9.02
Certain Matters Affecting the Trust
Administrator.
109
Section 9.03
Trust Administrator Not Liable for
Certificates or Mortgage Loans.
111
Section 9.04
Trust Administrator May Own
Certificates.
111
Section 9.05
Trust Administrator’s Fees and
Expenses.
111
Section 9.06
Eligibility Requirements for Trust
Administrator.
112
Section 9.07
Resignation and Removal of Trust
Administrator.
112
Section 9.08
Successor Trust Administrator.
114
Section 9.09
Merger or Consolidation of Trust
Administrator.
115
Section 9.10
[Reserved].
115
Section 9.11
Tax Matters.
115
Section 9.12
Periodic Filings.
118
ARTICLE X
TERMINATION
Section 10.01
Termination upon Liquidation or Purchase
of All Mortgage Loans.
125
Section 10.02
Final Distribution on the
Certificates.
126
Section 10.03
Additional Termination
Requirements.
127
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment.
128
Section 11.02
Recordation of Agreement;
Counterparts.
130
Section 11.03
Governing Law.
130
Section 11.04
Intention of Parties.
131
Section 11.05
Notices.
131
Section 11.06
Severability of Provisions.
132
Section 11.07
Assignment.
132
Section 11.08
Limitation on Rights of
Certificateholders.
132
Section 11.09
Inspection and Audit Rights.
133
Section 11.10
Certificates Nonassessable and Fully
Paid.
134
Section 11.11
Compliance With Regulation AB.
134
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Representations and Warranties as to the
Mortgage Loans
Schedule III
Class P Prepayment Charges Mortgage Loan
Schedule
EXHIBITS
Exhibit A:
Form of Class A Certificate
Exhibit B:
Form of Class PO Certificate
Exhibit C:
Form of Class A-X Certificate
Exhibit D-1:
Form of Class A-R Certificate
Exhibit D-2:
Form of Class P Certificate
Exhibit D-3:
[Reserved]
Exhibit E-1:
Form of Class B Certificate
Exhibit E-2:
[Reserved]
Exhibit F:
Form of Reverse of
Certificates
Exhibit G:
Form of Initial Certification of
Custodian
Exhibit H:
Form of Final Certification of
Custodian
Exhibit I:
Transfer Affidavit
Exhibit J:
Form of Transferor Certificate
Exhibit K:
Form of Investment Letter (Non Rule
144A)
Exhibit L:
Form of Rule 144A Letter
Exhibit M:
Form of Request for Release
Exhibit N:
[Reserved]
Exhibit O:
Form of Assessment of
Compliance
Exhibit P:
[Reserved]
Exhibit Q:
Form of Cap Contract
Exhibit R:
Additional Form 10-D
Disclosure
Exhibit S:
Additional Form 10-K
Disclosure
Exhibit T:
Form 8-K Disclosure
Information
Exhibit U:
Form of Sarbanes-Oxley
Certification
Exhibit V:
Relevant Servicing Criteria
THIS POOLING AND SERVICING AGREEMENT,
dated as of January 1, 2006, among MORTGAGE ASSET SECURITIZATION
TRANSACTIONS, INC., a Delaware corporation, as depositor (the
“Depositor”), UBS REAL ESTATE SECURITIES INC., a
Delaware corporation, as transferor (the “Transferor”),
WELLS FARGO BANK, N.A., a national banking association
(“Wells Fargo”), as master servicer (in such capacity,
the “Master Servicer”), as trust administrator (in such
capacity, the “Trust Administrator”) and as custodian
(in such capacity, the “Custodian”) and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as trustee
(in such capacity, the “Trustee”).
W I T N E S S E T H T H A
T
In consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust
Fund that is hereby conveyed to the Trustee in return for the
Certificates. The Trust Fund is being conveyed to the Trustee
to create a trust for the benefit of the Certificateholders.
The Trust Fund for federal income tax purposes shall consist
of two REMICs (the “Subsidiary REMIC” and the
“Master REMIC”). The “latest possible
maturity date” for federal income tax purposes of all
interests created hereby shall be the Latest Possible Maturity
Date.
The Subsidiary REMIC shall consist of all
of the assets constituting the Trust Fund (exclusive of the Class P
Prepayment Charges, the Cap Reserve Fund and the Cap Contract) and
shall be evidenced by the uncertificated interests set forth below
that shall be designated as REMIC regular interests (the
“Subsidiary REMIC Regular Interests”). In
addition, the Subsidiary REMIC shall issue the Class A-LR
Certificate and shall designate such interest as its sole class of
residual interest.
The Master REMIC shall consist of the
Subsidiary REMIC Regular Interests and shall be evidenced by the
Classes of Certificates set forth below for the Master REMIC
(which, except for the Class P, Class Y, Class A-LR and Class A-UR
Certificates and, in the case of the Class A-2 Certificates,
exclusive of the entitlement to receive payments from the Cap
Reserve Fund, shall represent the “regular interests”
in the Master REMIC). In addition, the Master REMIC
shall issue the Class A-UR Certificate and shall designate such
interest as its sole class of residual interest.
Subsidiary REMIC:
The Subsidiary REMIC Regular Interests,
each of which is hereby designated a REMIC regular interest for
federal income tax purposes, shall have the following principal
balances, pass-through rates and Corresponding Class in the Master
REMIC in the manner set forth in the following table:
|
Subsidiary
REMIC
Interests
|
Initial
Balance
|
Pass-
Through Rate
|
Corresponding
Class in the Master REMIC
|
|
LT-A-1
|
(3)
|
(2)
|
A-1
|
|
LT-A-2
|
(3)
|
(2)
|
A-2, A-3
|
|
LT-A-4
|
(3)
|
(2)
|
A-4
|
|
LT-A-5
|
(3)
|
(2)
|
A-5
|
|
LT-A-6
|
(3)
|
(2)
|
A-6
|
|
LT-PO
|
(3)
|
0.000%
|
PO
|
|
LT-A-X
|
(1)
|
(2)
|
A-X
|
|
LT-A-UR
|
(3)
|
(2)
|
A-UR
|
|
LT-B-1
|
(3)
|
(2)
|
B-1
|
|
LT-B-2
|
(3)
|
(2)
|
B-2
|
|
LT-B-3
|
(3)
|
(2)
|
B-2
|
|
LT-B-4
|
(3)
|
(2)
|
B-4
|
|
LT-B-5
|
(3)
|
(2)
|
B-5
|
|
LT-B-6
|
(3)
|
(2)
|
B-6
|
_______________
(1)
The Class LT-A-X shall
not have a principal balance. The Class LT-A-X shall be
entitled to the excess interest on the Non-Discount Mortgage
Loans.
(2)
The Required
Coupon.
(3)
The initial principal
balance of each of these Subsidiary REMIC Regular Interests shall
equal the initial Class Principal Balance of its Corresponding
Class of Certificates.
Each Subsidiary REMIC Regular Interest
shall receive principal distributions and allocations of Realized
Losses equal to those for its corresponding class in the Master
REMIC.
Master REMIC:
The following table sets forth
characteristics of the Certificates, together with the minimum
denominations and integral multiples in excess thereof in which
such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different
amount):
|
|
Initial Class Principal Balance
or Notional Amount
|
Initial Pass-Through
Rate
|
|
Integral Multiples
in Excess of Minimum
|
|
Class A-1
|
$123,216,000
|
6.00%
|
$25,000
|
$1
|
|
Class A-2
|
$72,944,000
|
(2)
|
$25,000
|
$1
|
|
Class A-3
|
(3)
|
(4)
|
$25,000
|
$1
|
|
Class A-4
|
$9,857,000
|
6.00%
|
$1,000
|
$1
|
|
Class A-5
|
$41,865,000
|
6.00%
|
$25,000
|
$1
|
|
Class A-6 (1)
|
$6,929,000
|
6.00%
|
$25,000
|
$1
|
|
Class A-LR
|
$50
|
6.00%
|
100%
|
N/A
|
|
Class A-UR
|
$50
|
6.00%
|
100%
|
N/A
|
|
Class PO
|
$4,960,899
|
(5)
|
$25,000
|
$1
|
|
Class A-X
|
(6)
|
6.000%
|
$100,000
|
$1
|
|
Class B-1
|
$8,006,000
|
6.000%
|
$25,000
|
$1
|
|
Class B-2
|
$2,760,000
|
6.000%
|
$25,000
|
$1
|
|
Class B-3
|
$1,656,000
|
6.000%
|
$25,000
|
$1
|
|
Class B-4
|
$1,656,000
|
6.000%
|
$25,000
|
$1
|
|
Class B-5
|
$1,242,000
|
6.000%
|
$25,000
|
$1
|
|
Class B-6
|
$967,820
|
6.000%
|
$25,000
|
$1
|
|
Class P
|
(7)
|
N/A
|
N/A
|
N/A
|
|
Class Y
|
(8)
|
N/A
|
N/A
|
N/A
|
|
Components
|
|
|
|
|
|
Class A-6-1
|
$4,304,000
|
6.00%
|
N/A
|
N/A
|
|
Class A-6-2
|
$2,625,000
|
6.00%
|
N/A
|
N/A
|
___________
(1)
The Class A-6
Certificates will be deemed for purposes of the distribution of
interest and principal to consist of two Components as described in
the table. The Components are not severable.
(2)
Interest will accrue on
the Class A-2 Certificates at a per annum rate equal to (i) LIBOR
plus (ii) 0.70%, subject to a maximum rate of 6.00% per annum.
For purposes of the REMIC Provisions, interest payments
received on the Class A-2 Certificates in excess of 6.00% per annum
will be treated as having been paid by the Cap Contract. The
maximum rate on the Class A-2 certificates, including proceeds from
the Cap Contract, shall be 9.50% per annum.
(3)
The Class A-3
Certificates are Interest Only Certificates, will not be entitled
to distributions in respect of principal and will bear interest on
the related Notional Amount (initially $72,944,000).
(4)
Interest will accrue on
the Class A-3 Certificates at a per annum rate equal to (i) 5.30%
minus (ii) LIBOR, subject to a maximum rate of 5.30% per annum and
a minimum rate of 0.000% per annum. The per annum
Pass-Through Rate on the Class 2-A-2 Certificates for the first
Interest Accrual Period is 0.79%.
(5)
The Class PO
Certificates are Principal Only Certificates and will not be
entitled to distributions in respect of interest.
(6)
The Class A-X
Certificates are Interest Only Certificates, will not be entitled
to distributions in respect of principal and will bear interest on
the related Notional Amount (initially $12,626,365).
(7)
The Class P
Certificates do not have an aggregate principal balance and shall
not be entitled to distributions in respect of principal or
interest. The Class P Certificates shall be entitled to Class
P Prepayment Charges collected. The Class P Certificates do
not represent an interest in any REMIC created hereby.
(8)
The Class Y
Certificates will not have a Class Principal Balance or Notional
Amount. The Class Y Certificates will not be entitled to
distributions of principal or interest.
The foregoing REMIC structure is intended
to cause all of the cash from the Mortgage Loans (exclusive of the
Class P Prepayment Charges) to flow through to the Master REMIC as
cash flow on a REMIC regular interest, without creating any
shortfall—actual or potential (other than for credit losses)
to any REMIC regular interest. To the extent that the
structure is believed to diverge from such intention the party
identifying any ambiguity or drafting error shall notify each of
the parties hereto, and shall, in accordance with Section 10.01 of
this Agreement, attempt to resolve any ambiguities or correct any
drafting errors to accomplish such intention.
Set forth below are designations of
Classes of Certificates to the categories used herein:
Book-Entry Certificates
All Classes of Offered Certificates other
than the Physical Certificates.
ERISA-Restricted Certificates
The Residual Certificates and the Private
Certificates, and any Certificates that do not satisfy the
applicable ratings requirement under the Underwriter’s
Exemption.
ERISA-Restricted Cap
Certificates
The Class A-2 Certificates.
Floating Rate Certificates
The Class A-2 Certificates.
Group 1 Certificates
The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-LR and Class A-UR
Certificates.
Interest Only Certificates
The Class A-3 and Class A-X
Certificates.
Inverse Floating Rate
Certificates
The Class A-3 Certificates.
LIBOR Certificates
The Floating Rate and Inverse Floating
Rate Certificates.
Lockout Certificates
The Class A-5 Certificates.
Offered Certificates
All Classes of Certificates other than
the Private Certificates.
Physical Certificates
The Private Certificates and the Residual
Certificates.
Principal Only Certificates
The PO Certificates.
Private Certificates
The Class B-4, Class B-5, Class B-6 and
Class P Certificates.
Rating Agencies
S&P and Moody’s.
Regular Certificates
All Classes of Certificates, other than
the Residual Certificates and the Class P Certificates.
Residual Certificates
The Class A-LR and Class A-UR
Certificates.
Senior Certificates
The Group 1, Interest Only and Principal
Only Certificates.
Subordinate Certificates
The Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
Defined terms and provisions herein
relating to statistical rating agencies not designated above as
Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Section 1.01
Definitions .
Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accountant’s
Attestation : As defined
in Section 3.22(b)(i).
Accrued Certificate
Interest : With respect
to any Distribution Date and any interest bearing Class of
Certificates, the sum of (i) one month’s interest accrued
during the related Interest Accrual Period at the Pass-Through Rate
for such Class on the related Class Principal Balance or Notional
Amount, as applicable, subject to reduction as provided in Section
4.02(b) plus (ii) any Class Unpaid Interest Amounts for such
Class.
Additional Form 10-D
Disclosure : As defined
in Section 3.22.
Additional Form 10-K
Disclosure : As defined
in Section 3.22.
Additional Servicer
: Each affiliate of each Servicer
that services any of the Mortgage Loans and each person that is not
an affiliate of each such Servicer that services 10% or more to the
Mortgage Loans.
Adjustment Amount
: With respect to the Special
Hazard Loss Coverage Amount and, with respect to each anniversary
of January 1, 2006, the amount, if any, by which the Special Hazard
Loss Coverage Amount (without giving effect to the deduction of the
Adjustment Amount for such anniversary) exceeds the greatest of
(x) the product of 1% and the outstanding principal balance of
all the Mortgage Loans on the Distribution Date immediately
preceding such anniversary, (y) the outstanding principal
balance of Mortgage Loans secured by Mortgaged Properties in the
highest California zip code concentration on the Distribution Date
immediately preceding such anniversary, and (z) twice the
outstanding principal balance of the Mortgage Loan which has the
largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary.
Advance : An advance of principal or interest required
to be made by the applicable Servicer pursuant to the related
Servicing Agreement or required to be made by the Master Servicer
with respect to any Distribution Date pursuant to Section
4.01.
Affiliate : When used with reference to a specified
Person, another Person that (i) directly or indirectly controls or
is controlled by or is under common control with the specified
Person, (ii) is an officer of, partner in or trustee of, or serves
in a similar capacity with respect to, the specified Person or of
which the specified Person is an officer, partner or trustee, or
with respect to which the specified Person serves in a similar
capacity, or (iii) directly or indirectly is the beneficial owner
of 10% or more of any class of equity securities of the specified
Person or of which the specified Person is directly or indirectly
the owner of 10% or more of any class of equity
securities.
Aggregate Pool Principal
Balance : As to any
Distribution Date, the aggregate of the Scheduled Principal
Balances of the Mortgage Loans which were Outstanding Mortgage
Loans on the Due Date in the month preceding the month of such
Distribution Date.
Aggregate Subordinate
Percentage : With
respect to the Subordinate Certificates and as of any Distribution
Date, the aggregate Class Principal Balance for the Subordinate
Certificates divided by the Aggregate Pool Principal Balance
(net of the PO Percentage of the Scheduled Principal Balance of
each Discount Mortgage Loan).
Agreement : This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Allocable Share
: For any Distribution Date and
with respect to each Class of Subordinate Certificates, the portion
of the Subordinate Optimal Principal Amount allocable to such
Class, equal to the product of the Subordinate Optimal Principal
Amount on such Distribution Date and a fraction, the numerator of
which is the related Class Principal Balance thereof and the
denominator of which is the aggregate of the Class Principal
Balances of the Subordinate Certificates.
Amount Available for
Principal : As to any
Distribution Date, Available Funds for such Distribution Date
reduced by the aggregate amount distributable on such Distribution
Date in respect of interest on the Group 1 Certificates pursuant to
Section 4.02(a)(i) priority first .
Amount Available for PO
Recoveries : With respect to
any Distribution Date, the aggregate of the PO Percentage of
Recoveries on each Discount Mortgage Loan for such Distribution
Date.
Amount Held for Future
Distribution : As to any
related Distribution Date and any Mortgage Loan, the aggregate
amount held in the Collection Account at the close of business on
the related Servicer Remittance Date with respect to such Mortgage
Loan at the close of business on the related Servicer Remittance
Date on account of (i) Principal Prepayments received after the
related Prepayment Period, and Liquidation Proceeds and Insurance
Proceeds received in the month of such Distribution Date and (ii)
all Scheduled Payments due after the related Due Date.
Annual Statement of
Compliance: As defined in
Section 3.21(a).
Appraised Value
: With respect to any Mortgage
Loan, the Appraised Value of the related Mortgaged Property shall
be: (i) with respect to a Mortgage Loan other than a
Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the
Mortgaged Property at the time of the origination of such Mortgage
Loan; and (ii) with respect to a Refinancing Mortgage Loan, the
value of the Mortgaged Property based upon the appraisal made at
the time of the origination of such Refinancing Mortgage Loan as
modified by an updated appraisal.
Assessment of Compliance
: As defined in Section
3.22(i)(a).
Assignment : An individual assignment of a Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to reflect of record the sale or
transfer of the Mortgage Loan.
Assignment Agreements
: The following Assignment,
Assumption and Recognition Agreements, each dated as of January 30,
2006, whereby certain Servicing Agreements solely with respect to
the related Mortgage Loans were assigned to the Depositor for the
benefit of the Certificateholders:
(a)
The Assignment, Assumption and
Recognition Agreement among Downey, as company, the Transferor and
the Depositor;
(b)
The Assignment, Assumption and
Recognition Agreement among EverBank, as company, the Transferor
and the Depositor;
(c)
The Assignment, Assumption and
Recognition Agreement among GMACM, as company, the Transferor and
the Depositor;
(d)
The Assignment, Assumption and
Recognition Agreement among Mid America, as company, the Transferor
and the Depositor;
(e)
The Assignment, Assumption and
Recognition Agreement among PHH, as company, the Transferor and the
Depositor;
(f)
The Assignment, Assumption and
Recognition Agreement among Wells Fargo, as company, the Transferor
and the Depositor.
Assignment of Proprietary
Lease : With respect to
a Cooperative Loan, the assignment or mortgage of the related
Proprietary Lease from the Mortgagor to the originator of the
Cooperative Loan.
Available Funds
: As to any Distribution Date, the
sum of (a) the aggregate amount held in the Collection Account at
the close of business on the related Servicer Remittance Date and,
without duplication, on deposit in the Distribution Account at the
close of business on the related Distribution Account Deposit Date,
net of (i) the Amount Held for Future Distribution, (ii) amounts
permitted to be withdrawn from the Collection Account pursuant to
clauses (i)-(viii) inclusive and clauses (ix)(a)(ii) and (iii),
(ix)(b), (x) and (xi) of Section 3.10(a), (iii) after giving effect
to all amounts deposited to the Distribution Account from the
Collection Account, amounts permitted to be withdrawn from the
Distribution Account pursuant to clauses (i)-(iv) inclusive of
Section 3.10(b), and (iv) any amounts representing Fair Market
Value Excess of each Mortgage Loan received in connection with the
termination of the Trust Fund pursuant to Section 10.01 hereof, (b)
the amount of any Advances related to the Mortgage Loans with
respect to such Distribution Date and (c) in connection with each
Deleted Mortgage Loan, the Purchase Price and Substitution
Adjustment Amount of each such Mortgage Loan required to be
deposited on the related Distribution Account Deposit
Date.
Bankruptcy Code
: The United States Bankruptcy
Reform Act of 1978, as amended.
Bankruptcy Coverage Termination
Date : The point in time
at which the Bankruptcy Loss Coverage Amount is reduced to
zero.
Bankruptcy Loss
: With respect to any Mortgage
Loan, a Deficient Valuation or Debt Service Reduction as reported
by the applicable Servicer to the Master Servicer; provided
, however , that a Bankruptcy Loss shall not be deemed a
Bankruptcy Loss hereunder so long as the Master Servicer has
notified the Trustee in writing that either the Master Servicer or
the applicable Servicer is diligently pursuing any remedies that
may exist in connection with the related Mortgage Loan and either
(A) the related Mortgage Loan is not in default with regard to
payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow
payments in respect of such Mortgage Loan are being advanced on a
current basis by either the Master Servicer or the applicable
Servicer, in either case without giving effect to any Debt Service
Reduction or Deficient Valuation.
Bankruptcy Loss Coverage
Amount : With respect to
any Distribution Date, the Bankruptcy Loss Coverage Amount shall
equal the related Initial Bankruptcy Coverage Amount as reduced by
(i) the aggregate amount of Bankruptcy Losses relating to the
Mortgage Loans since January 1, 2006 and (ii) any permissible
reductions in the Bankruptcy Loss Coverage Amount as evidenced by a
letter of each Rating Agency to the Trust Administrator to the
effect that any such reduction or modification will not adversely
affect the then current ratings assigned to the Senior Certificates
rated by it.
Book-Entry Certificates
: As specified in the Preliminary
Statement.
Business Day : Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the City of New
York, New York, Minnesota, Maryland, or any city in which the
Corporate Trust Office of the Trustee or Trust Administrator is
located are authorized or obligated by law or executive order to be
closed.
Cap Contract : The interest rate cap agreement dated January
30, 2006 between the Trust Administrator, on behalf of the Trust,
and the Cap Provider in the form attached hereto as Exhibit Q. The
Cap Contract shall not be an asset of any REMIC formed under this
Agreement.
Cap Contract Notional
Amount : With respect to
any Distribution Date, the calculation amount for such Distribution
Date set forth in the Cap Contract.
Cap Payment : Beginning on the first Distribution Date and
on each Distribution Date thereafter through the Distribution Date
in August 2009, the amount, if any, equal to the lesser of (a)
amounts on deposit in the Cap Reserve Fund and (b) the product of
(1) the excess of one-month LIBOR (as defined in the Cap Contract)
(up to 8.800%) over 5.300% and (2) the lesser of the Class A-2
Certificate Principal Balance for such Distribution Date and the
Cap Notional Balance for such Distribution Date.
Cap Provider : UBS AG, London Branch and any successor
thereto.
Cap Reserve Fund
: The separate Eligible Account or
Accounts created and maintained by the Trust Administrator pursuant
to Section 3.07 with a depository institution in the name of the
Trustee on behalf of Certificateholders and designated
“JPMorgan Chase Bank, N.A., in trust for the registered
holders of Mortgage Asset Securitization Transactions, Inc., MASTR
Alternative Loan Trust 2006-1, Mortgage Pass-Through Certificates,
Series 2006-1.”
Cenlar : Cenlar, FSB, and its successors and assigns,
in its capacity as Servicer of the Cenlar Mortgage
Loans.
Cenlar Serviced Mortgage
Loans : The Mortgage
Loans for which Cenlar is listed as “Servicer” on the
Mortgage Loan Schedule.
Cenlar Servicing Agreement
: Solely with respect to the Cenlar
Serviced Mortgage Loans, the Servicing Agreement, dated as of
January 1, 2006 by and among the Master Servicer, UBS Real Estate
Securities Inc., as seller, and Cenlar, as servicer, as the same
may be amended from time to time.
Certificate : Any one of the Certificates executed by the
Trust Administrator on behalf of the Trust and authenticated by the
Trust Administrator in substantially the forms attached hereto as
Exhibits A through F.
Certificate Owner
: With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal
Balance : With respect
to any Certificate or Component (other than the Interest Only
Certificates, the Class P Certificates and the Class 1-A-6
Certificates) at any date, the maximum dollar amount of principal
to which the Holder thereof is then entitled hereunder, such amount
being equal to the Denomination thereof minus the sum of (i)
all distributions of principal previously made with respect thereto
and (ii) all Realized Losses allocated thereto and, in the case of
any Subordinate Certificates, all other reductions in Certificate
Principal Balance previously allocated thereto pursuant to Section
4.03; provided , however , that pursuant to Section
4.03(d), (a) the Class Principal Balance of a Class of Certificates
(other than the Class A-6 Certificates) may be increased up to the
amount of Realized Losses previously allocated to such Class in the
event that there is a Recovery on a related Mortgage Loan, and the
Certificate Principal Balance of any individual Certificate of such
Class will be increased by its pro rata share of the
increase to such Class and (b) the aggregate Certificate Principal
Balance of a Component may be increased up to the amount of
Realized Losses previously allocated to such Component, in the
event that there is a Recovery on a related Mortgage Loan, and the
Certificate Principal Balance of any individual Component will be
increased by its pro rata share of the increase to the
aggregate Certificate Principal Balance. With respect to the
Class A-6 Certificates at any date, the sum of the Certificate
Principal Balances of Component A-6-1 and Component A-6-2 on such
date.
Certificate Register
: The register maintained pursuant
to Section 5.02 hereof.
Certificateholder or Holder
: The person in whose name a
Certificate is registered in the Certificate Register, except that,
solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Master
Servicer or the Depositor or any affiliate of the Master Servicer
or the Depositor, as applicable, shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount
of Percentage Interests necessary to effect such consent has been
obtained; provided , however , that if any such
Person (including the Master Servicer or the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates,
such Certificates shall be deemed to be Outstanding for purposes of
any provision hereof that requires the consent of the
Holders of Certificates of a particular Class as a condition to the
taking of any action hereunder. The Trust Administrator is
entitled to rely conclusively on a certification of the Master
Servicer or the Depositor or any affiliate of the Master Servicer
or the Depositor, as applicable, in determining which Certificates
are registered in the name of an affiliate of the Master Servicer
or the Depositor.
Certification : As specified in Section 9.12(d).
Certification Parties
: As defined in Section
9.12.
Certifying Person
: As defined in Section 9.12.
Class : All Certificates bearing the same class
designation as set forth in the Preliminary Statement.
Class Interest Shortfall
: As to any Distribution Date and
any interest-bearing Class of Certificates, the amount by which the
amount described in clause (i) of the definition of “Accrued
Certificate Interest” for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution
Date pursuant to such clause (i).
Class P Certificates
: All Certificates bearing the
class designation of “Class P.”
Class P Prepayment Charges
: Any prepayment premium, penalty
or charge to which the Trust is entitled with respect to Mortgage
Loans identified on Schedule III attached hereto.
Class Prepayment Distribution
Trigger : This trigger
is satisfied with respect to any Class of Subordinate Certificates
and any Distribution Date, if either (i) the fraction, the
numerator of which is the aggregate Class Principal Balance of such
Class and each Class of Subordinate Certificates subordinate
thereto, immediately prior to such Distribution Date, and the
denominator of which is the Aggregate Pool Principal Balance with
respect to that Distribution Date, equals or exceeds such
percentage calculated as of the Closing Date or (ii) such Class of
Subordinate Certificates is the only Class of Subordinate
Certificates then outstanding, then the Class Prepayment
Distribution Trigger shall be satisfied for such Class and
Distribution Date.
Class Principal Balance
: With respect to any Class of
Certificates (other than a Class of Interest Only Certificates and
the Class P Certificates) and as to any date of determination, the
aggregate of the Certificate Principal Balances of all Certificates
of such Class as of such date.
Class Unpaid Interest
Amounts : As to any
Distribution Date and any interest-bearing Class of Certificates,
the amount by which the aggregate Class Interest Shortfalls for
such Class on prior Distribution Dates exceeds the amount
distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of “Accrued Certificate
Interest” for such Class.
Class Y Certificates
: All Certificates bearing the
class designation of “Class Y.”
Class Y Distributable
Amount : On the Distribution
Date in September 2009, any amounts on deposit in the Cap Reserve
Fund after the distribution of the Cap Payments pursuant to Section
4.06.
Clean-up Call Mortgage Loan
Price : With respect to
each Mortgage Loan (not including REO Properties) to be purchased
pursuant to Section 10.01(a), the greater of (x) the Par Call Price
for such Mortgage Loan and (y) the Fair Market Value Call Price for
such Mortgage Loan.
Clean-up Call REO Property
Price : With respect to
each REO Property to be purchased pursuant to Section 10.01(a), the
lesser of (x) the appraised value of such REO Property as
determined by the higher of two appraisals completed by two
independent appraisers selected by the Master Servicer at the
expense of the Master Servicer and (y) the unpaid principal balance
of each Mortgage Loan related to such REO Property plus accrued and
unpaid interest thereon at the applicable Net Mortgage
Rate.
Closing Date : January 30, 2006.
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Collection Account
: The separate Eligible Account or
Accounts created and maintained by the Master Servicer pursuant to
Section 3.07 with a depository institution in the name of the
Master Servicer for the benefit of the Trustee on behalf of
Certificateholders and designated “Wells Fargo Bank, National
Association, for the benefit of U.S. Bank National Association, in
trust for the registered Holders of MASTR Alternative Loan Trust
2006-1, Mortgage Pass-Through Certificates Series 2006-1”.
The Collection Account may be deemed to be a sub-account of
the Distribution Account.
Commission : The U.S. Securities and Exchange
Commission.
Compensating Interest
: With respect to any Distribution
Date and any Servicer, the amount required to be paid by such
Servicer under the related Servicing Agreement in connection with
Prepayment Interest Shortfalls that occur on Mortgage Loans
serviced by such Servicer for the related Distribution Date.
If a Servicer fails to make its required payment of
Compensating Interest on any Distribution Date, the Master Servicer
will be required to make such payment of Compensating Interest to
the same extent that such Servicer was required to make such
payment of Compensating Interest.
Component : Component A-6-1 and Component A-6-2, as
applicable.
Cooperative Corporation
: With respect to any Cooperative Loan,
the cooperative apartment corporation that holds legal title to the
related Cooperative Property and grants occupancy rights to units
therein to stockholders through Proprietary Leases or similar
arrangements.
Cooperative Lien Search
: A search for (a) federal tax
liens, mechanics’ liens, lis pendens, judgments of record or
otherwise against (i) the Cooperative Corporation and (ii) the
seller of the Cooperative Unit, (b) filings of Financing Statements
and (c) the deed of the Cooperative Property into the Cooperative
Corporation.
Cooperative Loan
: A Mortgage Loan that is secured
by a first lien on and a perfected security interest in Cooperative
Shares and the related Proprietary Lease granting exclusive rights
to occupy the related Cooperative Unit in the building owned by the
related Cooperative Corporation.
Cooperative Property
: With respect to any Cooperative
Loan, all real property and improvements thereto and rights therein
and thereto owned by a Cooperative Corporation including without
limitation the land, separate dwelling units and all common
elements.
Cooperative Shares
: With respect to any Cooperative
Loan, the shares of stock issued by a Cooperative Corporation and
allocated to a Cooperative Unit and represented by stock
certificates.
Cooperative Unit
: With respect to any Cooperative
Loan, a specific unit in a Cooperative Property.
Corporate Trust Office
: With respect to the Trustee, the
designated office of the Trustee at which at any particular time
its corporate trust business with respect to this Agreement shall
be administered, which office at the date of the execution of this
Agreement is located at EP-MN-WS3D, 60 Livingston Avenue, St. Paul,
Minnesota 55107, Attention: Structured Finance—MASTR
Alternative Loan Trust 2006-1, which is the address to which
appropriate notices to and correspondence with the Trustee should
be directed.
With respect to the Trust Administrator,
the designated office of the Trust Administrator at which at any
particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of
execution of this Agreement is located for certificate transfer
purposes at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, Attention: Corporate Trust Services—MALT
2006-1, and for all other purposes at 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Corporate Trust
Services—MALT 2006-1.
Covered Loan : A Mortgage Loan categorized as Covered
pursuant to Appendix E of Standard & Poor’s
Glossary.
Cross-Over Date
: The Distribution Date on which
the aggregate Class Principal Balance of the Subordinate
Certificates has been reduced to zero.
Custodian : Wells Fargo, and any successor thereto
appointed hereunder.
Cut-off Date : January 1, 2006.
Cut-off Date Pool Balance
: $276,059,820.
Cut-off Date Principal
Balance : As to any
Mortgage Loan, the Scheduled Principal Balance thereof as of the
close of business on the Cut-off Date.
Debt Service Reduction
: With respect to any Mortgage
Loan, a reduction by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code in the Scheduled Payment for
such Mortgage Loan which became final and non-appealable, except
such a reduction resulting from a Deficient Valuation or any
reduction that results in a permanent forgiveness of
principal.
Deficient Valuation
: With respect to any Mortgage
Loan, a valuation by a court of competent jurisdiction of the
Mortgaged Property in an amount less than the then outstanding
indebtedness under the Mortgage Loan, or any reduction in the
amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is
final and non appealable in a proceeding under the Bankruptcy
Code.
Definitive Certificates
: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a
Book-Entry Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan
: Any Mortgage Loan that is
required to be repurchased pursuant to Section 2.02 or
2.03.
Denomination : With respect to each Certificate, the amount
set forth on the face thereof as the “Initial Certificate
Principal Balance of this Certificate” or the “Initial
Notional Amount of this Certificate” or, if neither of the
foregoing, the Percentage Interest appearing on the face
thereof.
With respect to any Component, the
principal balance of that Component on the date of the initial
issuance of the Certificates.
Depositor : Mortgage Asset Securitization Transactions,
Inc., a Delaware corporation, or its successor in
interest.
Depository : The initial Depository shall be The
Depository Trust Company, the nominee of which is CEDE & Co.,
as the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a “clearing
corporation” as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of the State of New York.
Depository Participant
: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a
Depository effects Book-Entry transfers and pledges of securities
deposited with the Depository.
Determination Date
: The date on which a Servicer is
required to determine the amount it is required to advance pursuant
to the applicable Servicing Agreement.
Discount Mortgage Loan
: With regard to any Mortgage Loan
in such with a Net Mortgage Rate that is less than the related
Required Coupon as of the Cut-off Date.
Distribution Account
: The separate Eligible Account
created and maintained by the Trust Administrator pursuant to
Section 3.07 in the name of the Trust Administrator for the benefit
of the Certificateholders and designated “Wells Fargo Bank,
N.A., in trust for registered Holders of MASTR Alternative Loan
Trust 2006-1, Mortgage Pass-Through Certificates, Series
2006-1.” Funds in the Distribution Account shall be
held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement.
Distribution Account Deposit
Date : As to any
Distribution Date, one Business Day prior to such Distribution
Date.
Distribution Date
: The 25th day of each calendar
month after the initial issuance of the Certificates, or if such
25th day is not a Business Day, the next succeeding Business Day,
commencing in February 2005.
Distribution Date Statement
: The statement delivered to the
Certificateholders pursuant to Section 4.04.
Downey : Downey Savings and Loan Association, F.A.,
and its successors and assigns, in its capacity as Servicer of the
Downey Mortgage Loans.
Downey Mortgage Loans
: The Mortgage Loans for which
Downey is listed as “Servicer” on the Mortgage Loan
Schedule.
Downey Servicing Agreement
: Solely with respect to the Downey
Mortgage Loans, the Master Loan Purchase and Servicing Agreement,
dated as of August 1, 2002, between the Transferor, as purchaser,
and Downey, as seller and as servicer, and as the same may be
amended from time to time, and any assignments and conveyances
related to the Downey Mortgage Loans.
Due Date : With respect to any Distribution Date, the
first day of the month in which the related Distribution Date
occurs.
Eligible Account
: Any of (i) an account or accounts
maintained with a federal or state chartered depository institution
or trust company the short-term unsecured debt obligations of which
(or, in the case of a depository institution or trust company that
is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short term
ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by
the FDIC (to the limits established by the FDIC) and the uninsured
deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trust
Administrator and to each Rating Agency, the Certificateholders
have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or
creditors of the depository institution or trust company in which
such account is maintained, or (iii) a non-interest bearing
segregated trust account or accounts maintained with (a) the trust
department of a federal or state chartered depository institution
or (b) a trust company, acting in its fiduciary capacity or (iv)
any other account acceptable to each Rating Agency, as stated by
each such Rating Agency in writing. Eligible Accounts may
bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trust
Administrator.
Eligible Substitute Mortgage
Loan : With respect to a
Mortgage Loan substituted by the Transferor for a Deleted Mortgage
Loan, a Mortgage Loan which must, on the date of such substitution,
(i) have a Scheduled Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of
substitution (or, in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate principal
balance), not in excess of, and not more than 10% less than the
Scheduled Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (iv) have a remaining term to maturity no greater than (and
not more than one year less than that of) the Deleted Mortgage
Loan; (v) comply with each representation and warranty set forth in
Section 2.03 hereof; (vi) be the same credit grade category as the
Deleted Mortgage Loan; (vii) have the same prepayment penalty term;
and (viii) not be a Cooperative Loan unless the Deleted Mortgage
Loan was a Cooperative Loan. Any Mortgage Loan substituted
for a Discount Mortgage Loan shall for all purposes of this
Agreement be treated as having the same interest rate as the
Mortgage Loan it replaced, except that any excess interest shall be
paid to the Class A-X Certificates.
ERISA : The Employee Retirement Income Security Act
of 1974, as amended.
ERISA Qualifying
Underwriting : A best
efforts or firm commitment underwriting or private placement that
meets the requirements (without regard to the ratings requirements)
of an Underwriter’s Exemption.
ERISA-Restricted
Certificate : As
specified in the Preliminary Statement.
ERISA-Restricted Cap
Certificate : As
specified in the Preliminary Statement.
Escrow Account : The Eligible Account or Accounts established
and maintained pursuant to Section 3.08 hereof.
EverBank : EverBank, and its successors and assigns, in
its capacity as Servicer of the EverBank Mortgage Loans.
EverBank Mortgage Loans
: The Mortgage Loans for which
EverBank is listed as “Servicer” on the Mortgage Loan
Schedule.
EverBank Servicing
Agreement : Solely with
respect to the EverBank Mortgage Loans, the Servicing Agreement
dated as of April 1, 2005, between the Transferor, as purchaser,
and EverBank, as seller and as servicer, and as the same may be
amended further from time to time, and any term sheets related to
the EverBank Mortgage Loans.
Excess Loss : With respect to any Mortgage Loan, the amount
of any (i) Fraud Loss realized after the Fraud Loss Coverage
Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii) Deficient
Valuation realized after the Bankruptcy Coverage Termination
Date.
Excess Proceeds
: With respect to any Liquidated
Loan, the amount, if any, by which the sum of any Liquidation
Proceeds of such Mortgage Loan received in the calendar month in
which such Mortgage Loan became a Liquidated Loan, exceeds (i) the
Scheduled Principal Balance of such Liquidated Loan as of the Due
Date in the month in which such Mortgage Loan became a Liquidated
Loan plus (ii) accrued interest at the Mortgage Rate from
the Due Date as to which interest was last paid or advanced (and
not reimbursed) to Certificateholders up to the Due Date applicable
to the Distribution Date immediately following the calendar month
during which such liquidation occurred.
Exchange Act : The Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations
thereunder.
Fair Market Value Call
Price : With respect to
each Mortgage Loan (not including REO Properties) to be purchased
pursuant to Section 10.01(a) hereof, the fair market value of such
Mortgage Loan (to be determined pursuant to a bid procedure set
forth in Section 10.01(b) hereof) plus accrued and unpaid interest
thereon at the applicable Net Mortgage Rate.
Fair Market Value Excess
: With respect to each Mortgage
Loan to be purchased pursuant to Section 10.01(a) hereof, the
excess, if any, of the Fair Market Value Call Price for such
Mortgage Loan, over the Par Call Price for such Mortgage Loan.
Any Fair Market Value Excess will not become part of the
Available Funds, but shall instead be distributed directly to the
Holders of the Class A-LR Certificates pursuant to Section 4.02(i)
hereof.
Fannie Mae : Fannie Mae, a federally chartered and
privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor
thereto.
FDIC : The Federal Deposit Insurance Corporation, or
any successor thereto.
Final Certification
: The certification required to be
delivered by the Custodian not later than 90 days after the Closing
Date to the Depositor, the Trustee and the Transferor in the form
annexed hereto as Exhibit H pursuant to Section 2.02 of this
Agreement.
Final Scheduled Distribution
Date : The Distribution
Date in February 2036.
Financing Statement
: A financing statement in the form
of a UCC-1 or UCC-3, as applicable, filed pursuant to the Uniform
Commercial Code to perfect a security interest in the Cooperative
Shares and Pledge Instruments.
Fitch : Fitch, Inc., or any successor thereto.
If Fitch is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.05(b), the address for
notices to Fitch shall be One State Street Plaza, New York, NY
10004, Attention: MBS Monitoring MASTR Alternative Loan Trust
2006-1, or such other address as Fitch may hereafter furnish to
each party to this Agreement.
Form 8-K Disclosure
Information : As defined
in Section 3.22.
Fraud Loan : A Liquidated Loan as to which a Fraud Loss
has occurred.
Fraud Loss Coverage Amount
: As of the Closing Date,
$8,281,795 subject to reduction from time to time by the aggregate
amount of Fraud Losses that would have been previously allocated to
the Subordinate Certificates in the absence of the Loss Allocation
Limitation since the Cut-off Date. In addition, such Fraud
Loss Coverage Amount will be reduced as follows: (a) on
February 1, 2007 through January 31, 2007 to an amount equal to
$5,521,196 less the aggregate amount of Fraud Losses that
would have been previously allocated to the Subordinate
Certificates in the absence of the Loss Allocation Limitation since
the Cut-off Date, (b) on February 1, 2008 through January 31, 20011
to an amount equal to $2,760,598 less the aggregate amount
of Fraud Losses that would have been previously allocated to the
Subordinate Certificates in the absence of the Loss Allocation
Limitation since the Cut-off Date and (c) after the earlier to
occur of the Cross-Over Date and February 1, 2011, to
zero.
Fraud Loss Coverage Termination
Date : The point in time
at which the Fraud Loss Coverage Amount is reduced to
zero.
Fraud Losses : Realized Losses on Mortgage Loans as to which
a loss is sustained by reason of a default arising from fraud,
dishonesty or misrepresentation in connection with the related
Mortgage Loan, including a loss by reason of the denial of coverage
under any related Primary Insurance Policy because of such fraud,
dishonesty or misrepresentation as reported by the applicable
Servicer to the Master Servicer.
Freddie Mac : Freddie Mac, a corporate instrumentality of
the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
GMACM : GMAC Mortgage Corporation, a Pennsylvania
corporation, and its successors and assigns, in its capacity as
Servicer of the GMACM Mortgage Loans.
GMACM Mortgage Loans
: The Mortgage Loans for which
GMACM is listed as “Servicer” on the Mortgage Loan
Schedule.
GMACM Servicing Agreement
: Solely with respect to the GMACM
Mortgage Loans, the Servicing Agreement, dated as of November 1,
2001, between the Transferor and GMACM, as the same may be amended
from time to time, and any assignments and conveyances related to
the GMACM Mortgage Loans.
Grantor Trust : That portion of the Trust, exclusive of any
REMIC, that holds the rights of the Class P Certificateholders to
receive Class P Prepayment Charges and the rights of the Class Y
Certificateholders with regard to the Cap Reserve Fund.
Group 1 Certificates
: As specified in the Preliminary
Statement.
High Cost Loan : A Mortgage Loan classified as (a) a
“high cost” loan under the Home Ownership and Equity
Protection Act of 1994, (b) a “high cost home,”
“threshold,” “covered,” (excluding New
Jersey “Covered Home Loans” as that term is defined in
clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), “high risk home,”
“predatory” or similar loan under any other 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) or (c) a
Mortgage Loan categorized as High Cost pursuant to Appendix E of
Standard and Poor’s Glossary.
Home Loan : A Mortgage Loan categorized as Home Loan
pursuant to Appendix E of Standard & Poor’s
Glossary.
Independent : When used with respect to any accountants, a
Person who is “independent” within the meaning of Rule
2-01(B) of the Commission’s Regulation S-X. Independent
means, when used with respect to any other Person, a Person who (A)
is in fact independent of another specified Person and any
affiliate of such other Person, (B) does not have any material
direct or indirect financial interest in such other Person or any
affiliate of such other Person, (C) is not connected with such
other Person or any affiliate of such other Person as an officer,
employee, promoter, underwriter, Trustee, partner, director or
Person performing similar functions and (D) is not a member of the
immediate family of a Person defined in clause (B) or (C)
above.
Indirect Participant
: A broker, dealer, bank or other
financial institution or other Person that clears through or
maintains a custodial relationship with a Depository
Participant.
Initial Bankruptcy Coverage
Amount : $150,000.
Initial Certification
: The certification required to be
executed by the Custodian and delivered on the Closing Date to the
Depositor and the Trustee in the form annexed hereto as Exhibit G
pursuant to Section 2.02 of this Agreement.
Initial LIBOR Rate
: 4.51% per annum.
Insolvency Proceeding
: With respect to any Person:
(i) any case, action, or proceeding with respect to such
Person before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding up, or relief of debtors; or (ii) any general
assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of
the creditors generally of such Person or any substantial portion
of such Person’s creditors, in any case undertaken under
federal, state or foreign law, including the Bankruptcy
Code.
Insurance Policy
: With respect to any Mortgage Loan
included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect, including any
replacement policy or policies for any Insurance
Policies.
Insurance Proceeds
: Proceeds paid by an insurer
pursuant to any Insurance Policy, in each case other than any
amount included in such Insurance Proceeds in respect of Insured
Expenses, to the extent such proceeds are not applied to the
restoration of the related Mortgaged Property or released to the
borrower in accordance with the applicable Servicer’s normal
servicing procedures.
Interest Accrual Period
: With respect to each Class of
Certificates (other than the LIBOR Certificates), the Subsidiary
REMIC Regular Interests and any Distribution Date, the period from
and including the first day of the month immediately preceding the
month in which such Distribution Date occurs, commencing January 1,
2006, to and including the last day of such immediately preceding
month, on the basis of a 360-day year consisting of twelve 30-day
months and (ii) with respect to the LIBOR Certificates and any
Distribution Date, the period from and including the Distribution
Date of the month immediately preceding the month in which such
Distribution Date occurs (and in the case of the first Distribution
Date, the 25 th day of the preceding calendar month) to
and including the day preceding such Distribution Date, provided
that each Interest Accrual Period for the LIBOR Certificates will
be treated as being a 30-day period.
Interest Only Certificates
: As specified in the Preliminary
Statement.
Latest Possible Maturity
Date : The Distribution
Date following the third anniversary of the scheduled maturity date
of the Mortgage Loan having the latest scheduled maturity date as
of the Cut-off Date.
Lender-Paid Mortgage Insurance
Loan : Each of the
Mortgage Loans identified on the Mortgage Loan Schedule as having a
Lender-Paid Mortgage Insurance Rate.
Lender-Paid Mortgage Insurance
Rate : With respect to
any Lender-Paid Mortgage Insurance Loan, a per annum rate equal to
the percentage indicated on the Mortgage Loan Schedule under the
heading “Lender-Paid Mortgage Insurance
Rate.”
LIBOR : As to any Distribution Date, the arithmetic
mean of the London Interbank offered rate quotations for one month
U.S. Dollar deposits, as determined by the Trust Administrator in
accordance with Section 4.05.
LIBOR Business Day:
Any day other than (i) a Saturday
or a Sunday or (ii) a day on which banking institutions in the
State of New York or in the City of London, England are required or
authorized by law to be closed.
LIBOR Certificates
: As specified in the Preliminary
Statement.
LIBOR Determination Date
: As to any Distribution Date,
other than the first Distribution Date, and any Class of LIBOR
Certificates, the second LIBOR Business Day prior to the beginning
of the applicable Interest Accrual Period for such Class and such
Distribution Date.
Liquidated Loan
: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which
was liquidated in the calendar month preceding the month of such
Distribution Date and as to which the applicable Servicer or the
Master Servicer, as the case may be, has determined (in accordance
with the applicable Servicing Agreement and this Agreement) that it
has received all amounts it expects to receive in connection with
the liquidation of such Mortgage Loan, including the final
disposition of an REO Property.
Liquidation Proceeds
: Amounts, including Insurance
Proceeds, received in connection with the partial or complete
liquidation of defaulted Mortgage Loans, whether through
trustee’s sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of
a Mortgaged Property and any other proceeds received in connection
with an REO Property, less the sum of related unreimbursed
Servicing Fees, Servicing Advances and Advances.
Loan-to-Value Ratio
: With respect to any Mortgage Loan
and as to any date of determination, the fraction (expressed as a
percentage) the numerator of which is the principal balance of the
related Mortgage Loan at such date of determination and the
denominator of which is the Appraised Value of the related
Mortgaged Property. For purposes of representation (xxxi) of
Schedule II, the Loan-to-Value Ratio will be the loan-to-value
ratio calculated in accordance with applicable state laws regarding
primary mortgage insurance.
Loan Seller : With respect to any Mortgage Loan, the entity
that sold such Mortgage Loan to the Transferor.
Loss Allocation Limitation
: As defined in Section 4.03(c)
hereof.
Lost Mortgage Note
: Any Mortgage Note the original of
which was permanently lost or destroyed and has not been
replaced.
Majority in Interest
: As to any Class of Regular
Certificates, the Holders of Certificates of such Class evidencing,
in the aggregate, at least 51% of the Percentage Interests
evidenced by all Certificates of such Class.
Master REMIC : As specified in the Preliminary
Statement.
Master Servicer
: Wells Fargo Bank, N.A., a
national banking association, and its successors and assigns, in
its capacity as Master Servicer hereunder.
Master Servicer Event of
Termination : As defined
in Section 7.01 hereof.
Master Servicing
Compensation : All
investment earnings on amounts on deposit in the Collection
Account.
Master Servicing Officer
: Any officer of the Master
Servicer involved in, or responsible for, the administration and
master servicing of the Mortgage Loans.
MERS : As defined in Section 2.01.
MidAmerica : MidAmerica Bank, and its successors and
assigns, in its capacity as Servicer of the MidAmerica Mortgage
Loans to the Transferor.
MidAmerica Mortgage Loans
: The Mortgage Loans for which
MidAmerica is listed as “Servicer” on the Mortgage Loan
Schedule.
MidAmerica Servicing
Agreement : Solely with
respect to the MidAmerica Mortgage Loans, the Master Loan Purchase
and Servicing Agreement dated as of September 1, 2002, as amended
and restated to and including December 1, 2005 between the
Transferor and MidAmerica, as the same may be amended from time to
time, and any assignments and conveyances related to the MidAmerica
Mortgage Loans.
Moody’s: Moody’s Investors Service, Inc., or any
successor thereto. If Moody’s is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section
11.05(b), the address for notices to Moody’s shall be
Moody’s Investors Service, Inc., 99 Church Street, New York,
New York 10007, Attention: Residential Mortgage Monitoring
Group, or such other address as Moody’s may hereafter furnish
to each other party to this Agreement.
Mortgage : The mortgage, deed of trust or other
instrument creating a first lien on an estate in fee simple or
leasehold interest in real property securing a Mortgage
Note.
Mortgage File : The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional
documents delivered to the Custodian to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Loan Purchase
Agreement : The Mortgage
Loan Purchase Agreement, dated as of January 1, 2006, between the
Transferor and the Depositor.
Mortgage Loan Schedule
: The list of Mortgage Loans (as
from time to time amended by the Custodian to reflect the addition
of Eligible Substitute Mortgage Loans and the deletion of Deleted
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, attached hereto as Schedule I,
setting forth the following information with respect to each
Mortgage Loan: (1) the Mortgage Loan identifying number; (2)
the Mortgagor’s first and last name; (3) the street address
of the Mortgaged Property including the city, state and zip code;
(4) the original principal balance of the Mortgage Loan; (5) the
Scheduled Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date; (6) the unpaid principal balance of
the Mortgage Loan as of the close of business on the Cut-off Date;
(7) the last scheduled Due Date on which a Scheduled Payment was
applied to the Scheduled Principal Balance; (8) the last Due Date
on which a Scheduled Payment was actually applied to the unpaid
principal balance; (9) the Mortgage Rate in effect immediately
following origination; (10) the Mortgage Rate in effect immediately
following the Cut-off Date (if different from (9)); (11) the amount
of the Scheduled Payment at origination; (12) the amount of the
Scheduled Payment as of the Cut-off Date (if different from (11));
(13) a code indicating whether the Mortgaged Property is owner
occupied, a second home or an investor property; (14) a code
indicating whether the Mortgaged Property is a single family
residence, a two-family residence, a three-family residence, a
four-family residence, a planned unit development, a condominium or
a Cooperative Unit; (15) a code indicating the loan purpose (
i.e. , purchase, rate/term refinance, cash out refinance);
(16) the stated maturity date; (17) the original months to
maturity; (18) the remaining months to maturity from the Cut-off
Date based on the original amortization schedule and, if different,
the remaining months to maturity expressed in the same manner but
based on the actual amortization schedule; (19) the origination
date of the Mortgage Loan; (20) the Loan-to-Value Ratio at
origination; (21) the date on which the first Scheduled Payment was
due on the Mortgage Loan after the origination date; (22) a code
indicating the documentation style of the Mortgage Loan; (23) a
code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy and, if so, the name of the Qualified Mortgage
Insurer, the certificate number and the coverage amount of the
Primary Insurance Policy; (24) the Servicing Fee Rate; (25) a code
indicating whether the Mortgage Loan is subject to a prepayment
penalty and, if so, the term of such prepayment penalty and whether
the same shall be a Class P Prepayment Charge; (26) the credit
score (or mortgage score) of the Mortgagor; (27) the debt-to-income
ratio of the Mortgage Loan; (28) a code indicating the originator
of the Mortgage Loan; (29) a code indicating which Loan Pool such
Mortgage Loan is included in; (30) the date on which the Loan was
transferred to the Transferor; (31) the initial Servicer; (32) a
code indicating whether the Mortgage Loan is a Cooperative Loan,
and (33) a code indicating if the Mortgage Loan is subject to a
“lender-paid” Primary Insurance Policy, and if so, the
name of the Qualified Mortgage Insurer, the certificate number and
the coverage amount of the Primary Insurance Policy, and the
Lender-Paid Mortgage Insurance Rate.
Mortgage Loans : Such of the mortgage loans and cooperative
loans transferred and assigned to the Trustee pursuant to the
provisions hereof as from time to time are held as a part of the
Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged
Property. With respect to each Mortgage Loan that is a
Cooperative Loan, if any, “Mortgage Loan” shall
include, but not be limited to, the related Mortgage Note, Security
Agreement, Assignment of Proprietary Lease, Recognition Agreement,
Cooperative Shares and Proprietary Lease and, with respect to each
Mortgage Loan other than a Cooperative Loan, “Mortgage
Loan” shall include, but not be limited to the related
Mortgage and the related Mortgage Note.
Mortgage Note : The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Rate : The annual rate of interest borne by a
Mortgage Note from time to time.
Mortgaged Property
: The underlying real property
securing a Mortgage Loan or, with respect to a Cooperative Loan,
the related Cooperative Shares and Proprietary Lease.
Mortgagor : The obligor(s) on a Mortgage Note.
Net Mortgage Rate
: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less
(i) the related Servicing Fee Rate and (ii) the Lender-Paid
Mortgage Insurance Fee Rate, if applicable. For purposes of
determining whether any Eligible Substitute Mortgage Loan is a
Discount Mortgage Loan or a Non-Discount Mortgage Loan and for
purposes of calculating the applicable PO Percentage and applicable
Non-PO Percentage, each Eligible Substitute Mortgage Loan shall be
deemed to have a Net Mortgage Rate equal to the Net Mortgage Rate
of the Deleted Mortgage Loan for which it is
substituted.
Net Prepayment Interest
Shortfalls : As to any
Distribution Date, the amount by which the aggregate of Prepayment
Interest Shortfalls during the related Prepayment Period exceeds
the amount of Compensating Interest available for such Distribution
Date.
Non-Discount Mortgage Loan
: With respect to any Mortgage Loan
with a Net Mortgage Rate that is greater than or equal to the
related Required Coupon as of the Cut-off Date.
Non-PO Percentage
: As to any Mortgage Loan (a) that
is a Discount Mortgage Loan, a fraction (expressed as a percentage)
the numerator of which is the Net Mortgage Rate of such Discount
Mortgage Loan and the denominator of which is the related Required
Coupon and (b) that is a Non-Discount Mortgage Loan,
100%.
Non-PO Recoveries
: With respect to any Distribution
Date, an amount that is equal to the excess, if any, of (A) the
amount of Recoveries on the Mortgage Loans for such Distribution
Date, over (B) the amount of PO Recoveries for such Distribution
Date.
Nonrecoverable Advance
: Any portion of an Advance
previously made or proposed to be made by the applicable Servicer
or the Master Servicer, as the case may be, that, in the good faith
judgment of the applicable Servicer or the Master Servicer, will
not be ultimately recoverable by the applicable Servicer or the
Master Servicer from the related Mortgagor, related Liquidation
Proceeds or otherwise.
Notice of Final
Distribution : The
notice to be provided pursuant to Section 10.02 to the effect that
final distribution on any of the Certificates shall be made only
upon presentation and surrender thereof.
Notional Amount
: With respect to any Distribution
Date and the Class A-X Certificates, an amount equal to the product
of (x) the aggregate Scheduled Principal Balance of the
Non-Discount Mortgage Loans and (y) a fraction, (a) the numerator
of which is the weighted average of the Stripped Interest Rates for
the Non-Discount Mortgage Loans in and (b) the denominator of which
is 6.00% per annum.
With respect to any Distribution Date and
the Class A-3 Certificates, the Class Principal Balance of the
Class A-2 Certificates immediately prior to such Distribution
Date.
Offered Certificates
: As specified in the Preliminary
Statement.
Officer’s Certificate
: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii) if
provided for in this Agreement, signed by a Master Servicing
Officer, as the case may be, and delivered to the Depositor, the
Trustee and the Trust Administrator, as the case may be, as
required by this Agreement.
Opinion of Counsel
: A written opinion of counsel, who
may be counsel for the Depositor or the Master Servicer, including
in house counsel, reasonably acceptable to the Trustee or the Trust
Administrator, as applicable; provided, however, that, with respect
to the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the
Master Servicer, (ii) not have any direct financial interest in the
Depositor or the Master Servicer or in any affiliate of either, and
(iii) not be connected with the Depositor or the Master Servicer as
an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination
: The termination of the Trust
created hereunder in connection with the purchase of the Mortgage
Loans pursuant to Section 10.01(a) hereof.
Order : A final nonappealable order of a court or
other body exercising jurisdiction in an Insolvency Proceeding by
or against the Trust, to the effect that a Holder or the Trust
Administrator is required to return or repay all or a portion of a
Preference Amount.
Original Subordinate Principal
Balance : The aggregate
of the Class Principal Balances of the Subordinate Certificates as
of the Closing Date.
OTS : The Office of Thrift Supervision.
Outstanding : With respect to the Certificates as of any
date of determination, all Certificates theretofore executed and
authenticated under this Agreement except:
(a)
Certificates theretofore canceled by the
Trust Administrator or delivered to the Trust Administrator for
cancellation; and
(b)
Certificates in exchange for which or in
lieu of which other Certificates have been executed and delivered
by the Trust Administrator pursuant to this Agreement.
Outstanding Mortgage Loan
: As of any Due Date, a Mortgage
Loan with a Scheduled Principal Balance greater than zero that was
not the subject of a Principal Prepayment in Full prior to such Due
Date and that did not become a Liquidated Loan prior to such Due
Date.
Ownership Interest
: As to any Residual Certificate,
any ownership interest in such Certificate including any interest
in such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or
beneficial.
Par Call Price : With respect to each Mortgage Loan (not
including REO Properties) to be purchased pursuant to Section
10.01(a) hereof, 100% of the unpaid principal balance of such
Mortgage Loan, plus accrued and unpaid interest thereon at the
applicable Net Mortgage Rate.
Pass-Through Rate
: For any interest bearing Class of
Certificates, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
PCAOB : The Public Company Accounting Oversight
Board.
Percentage Interest
: As to any Certificate, the
percentage interest evidenced thereby in distributions required to
be made on the related Class, such percentage interest being set
forth on the face thereof or equal to the percentage obtained by
dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the same Class.
Permitted Investments
: At any time, any one or more of
the following obligations and securities:
(a)
obligations of the United States or any
agency thereof, provided such obligations are backed by the full
faith and credit of the United States;
(b)
general obligations of or obligations
guaranteed by any state of the United States or the District of
Columbia receiving the highest long-term debt rating of each Rating
Agency, or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by
either Rating Agency;
(c)
commercial or finance company paper which
is then receiving the highest commercial or finance company paper
rating of each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by either Rating Agency;
(d)
certificates of deposit, demand or time
deposits, or bankers’ acceptances issued by any depository
institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision
and examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term unsecured debt
obligations of such depository institution or trust company are
then rated in one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or
such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
either Rating Agency;
(e)
demand or time deposits or certificates
of deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured by
the FDIC and are then rated in the highest long-term and the
highest short-term ratings of each Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by either Rating Agency;
(f)
guaranteed reinvestment agreements issued
by any bank, insurance company or other corporation containing, at
the time of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by either Rating
Agency;
(g)
repurchase obligations with respect to
any security described in clauses (a) and (b) above, in either case
entered into with a depository institution or trust company (acting
as principal) described in clause (d) above;
(h)
securities (other than stripped bonds,
stripped coupons or instruments sold at a purchase price in excess
of 115% of the face amount thereof) bearing interest or sold at a
discount issued by any corporation incorporated under the laws of
the United States or any state thereof which, at the time of such
investment, have the highest rating of each Rating Agency, or such
lower rating as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by either Rating
Agency, as evidenced by a signed writing delivered by each Rating
Agency;
(i)
units of a taxable money market portfolio
having the highest rating assigned by each Rating Agency and
restricted to obligations issued or guaranteed by the United States
of America or entities whose obligations are backed by the full
faith and credit of the United States of America and repurchase
agreements collateralized by such obligations;
(j)
any mutual fund, money market fund,
common trust fund or other pooled investment vehicle, the assets of
which are limited to instruments that otherwise would constitute
Permitted Investments hereunder, including any such fund that is
managed by the Trust Administrator or Master Servicer or any
affiliate of the Trust Administrator or Master Servicer or for
which the Trust Administrator or Master Servicer or any affiliate
of the Trust Administrator or Master Servicer acts as an adviser as
long as such fund is rated in at least the highest rating category
by each Rating Agency; and
(k)
such other investments bearing interest
or sold at a discount acceptable to each Rating Agency as will not
result in the downgrading or withdrawal of the rating then assigned
to the Certificates by either Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency;
provided that no such instrument shall be a Permitted
Investment if such instrument evidences the right to receive
interest only payments with respect to the obligations underlying
such instrument.
Permitted Transferee
: Any Person other than (i) the
United States, any State or political subdivision thereof, or any
agency or instrumentality of any of the foregoing, (ii) a foreign
government, international organization or any agency or
instrumentality of either of the foregoing, (iii) an organization
(except certain farmers’ cooperatives described in section
521 of the Code) which is exempt from tax imposed by Chapter 1 of
the Code (including the tax imposed by section 511 of the Code on
unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(l) of the Code) with respect to any
Residual Certificate, (iv) rural electric and telephone
cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a citizen or resident of the United States, a
corporation, partnership (except as provided in applicable Treasury
Regulations), or other entity created or organized in or under the
laws of the United States, any state thereof or the District of
Columbia, 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 Persons
described in this clause (v) have the authority to control all
substantial decisions of the Trust (or, to the extent provided in
applicable Treasury Regulations, certain trusts in existence on
August 20, 1996 which are eligible to elect to be treated as United
States persons) unless such Person has furnished the transferor and
the Trust Administrator with a duly completed Internal Revenue
Service Form W-8ECI or any applicable successor form, (vi) any
Person with respect to whom income on any Residual Certificate is
attributable to a foreign permanent establishment or fixed base,
within the meaning of an applicable income tax treaty, of such
Person or any other Person and (vii) any other Person so designated
by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person
may cause any REMIC hereunder to fail to qualify as a REMIC at any
time that the Certificates are outstanding. The terms
“United States,” “State” and
“international organization” shall have the meanings
set forth in section 7701 of the Code or successor provisions.
A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof
for these purposes if all of its activities are subject to tax and,
with the exception of Freddie Mac, a majority of its board of
directors is not selected by such government unit.
Person : Any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
PHH: PHH Mortgage Corporation (formerly known as Cendant
Mortgage Corporation), a New Jersey corporation, and its successors
and assigns, in its capacity as Servicer of the PHH Mortgage
Loans.
PHH Mortgage Loans
: The Mortgage Loans for which PHH
is listed as “Servicer” on the Mortgage Loan
Schedule.
PHH Servicing Agreement
: Solely with respect to the PHH
Mortgage Loans, the Amended and Restated Mortgage Loan Flow
Purchase, Sale and Servicing Agreement, dated as of November 1,
2003, between the Transferor and PHH, as the same may be amended
from time to time, and any assignments and conveyances related to
the PHH Mortgage Loans.
Physical Certificate
: As specified in the Preliminary
Statement.
Pledge Instruments
: With respect to each Cooperative
Loan, the Stock Power, the Assignment of Proprietary Lease and the
Security Agreement.
PO Deferred Amount
: As to any Distribution Date on or
prior to the Cross-Over Date, the sum of (i) the sum for all of the
Discount Mortgage Loans of the applicable PO Percentage for each
such Mortgage Loan of the principal portion of each Realized Loss,
other than an Excess Loss, on such Discount Mortgage Loan to be
allocated to the Class PO Certificates on such Distribution Date
and (ii) all amounts previously allocated to the Class PO
Certificates in respect of such losses and not distributed to the
Class PO Certificates on prior Distribution Dates. After the
Cross-Over Date, the PO Deferred Amount shall be zero.
PO Principal Distribution
Amount : As to any
Distribution Date, the sum for all of the Discount Mortgage Loans
of the applicable PO Percentage of (a) the principal portion of
each Scheduled Payment (without giving effect, prior to the
Bankruptcy Coverage Termination Date, to any reductions thereof
caused by any Debt Service Reductions or Deficient Valuations) due
on such Mortgage Loan on the related Due Date, (b) the Scheduled
Principal Balance of such Mortgage Loan if it was repurchased by
the Transferor pursuant to this Agreement as of such Distribution
Date, (c) the Substitution Adjustment Amount in connection with any
Deleted Mortgage Loan received with respect to such Distribution
Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable
to recoveries of principal of such Mortgage Loan, to the extent
such Mortgage Loan is not yet a Liquidated Loan, received during
the calendar month preceding the month of such Distribution Date,
(e) to the extent such Mortgage Loan became a Liquidated Loan
during the month preceding the calendar month of such Distribution
Date, the lesser of (i) the Scheduled Principal Balance of such
Mortgage Loan and (ii) the amount of Liquidation Proceeds allocable
to principal received during the month preceding the month of such
Distribution Date with respect to such Mortgage Loan and (f) the
sum of (i) any Principal Prepayments in full with respect to such
Mortgage Loan received during the related Prepayment Period and
(ii) all partial Principal Prepayments with respect to such
Mortgage Loan applied during the related Prepayment Period;
provided , however , that if a Bankruptcy Loss that
is an Excess Loss is sustained with respect to a Discount Mortgage
Loan that is not a Liquidated Loan, the PO Principal Distribution
Amount will be reduced on the related Distribution Date by the
applicable PO Percentage of the principal portion of such
Bankruptcy Loss.
PO Percentage : As to any Discount Mortgage Loan, 100%
minus the Non-PO Percentage for such Discount Mortgage Loan.
As to any Non-Discount Mortgage Loan, 0%.
PO Recoveries : With respect to any Distribution Date, an
amount equal to the lesser of (a) the Amount Available for PO
Recoveries and (b) the PO Deferred Amount.
PO Recovery
Excess :
With respect to any Distribution Date, the excess, if any of (a)
the Amount Available for PO Recoveries over (b) the PO Deferred
Amount.
Prepayment Interest
Shortfall : As to any
Distribution Date, Mortgage Loan and Principal Prepayment received
or, in the case of partial Principal Prepayments, applied, during
the applicable Prepayment Period, the amount, if any, by which one
month’s interest at the related Net Mortgage Rate on such
Principal Prepayment exceeds the amount of interest at the Net
Mortgage Rate paid in connection with such Principal
Prepayment.
Prepayment Period
: As to any Distribution Date, and
with respect to any voluntary Principal Prepayment of a Mortgage
Loan the calendar month preceding the month in which such
Distribution Date occurs.
Primary Insurance Policy
: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect
to any Mortgage Loan.
Principal Only Certificates
: As specified in the Preliminary
Statement.
Principal Prepayment
: Any payment of principal by a
Mortgagor on a Mortgage Loan that is received in advance of its
scheduled Due Date, excluding any prepayment penalty or premium
thereon and is not accompanied by an amount representing scheduled
interest due on any date or dates in any month or months subsequent
to the month of prepayment. Partial Principal Prepayments
will be applied by the applicable Servicers in accordance with the
terms of the related Servicing Agreements and in accordance with
the terms of the related Mortgage Note, and to the extent the
Mortgage Note does not provide otherwise, shall be applied in the
Prepayment Period preceding the receipt thereof.
Principal Prepayment in
Full : Any Principal
Prepayment made by a Mortgagor of the entire principal balance of a
Mortgage Loan.
Priority Percentage
: With respect to any Distribution
Date, a fraction, expressed as a percentage (a) the numerator of
which is equal to the sum of (i) the aggregate Class Principal
Balance of the Class A-5 and Class A-6 Certificates immediately
prior to such Distribution Date and (ii) $18,975,000, and (b) the
denominator of which is equal to the aggregate Class Principal
Balance of the Senior Certificates immediately prior to such
Distribution Date.
Priority Prepayment Distribution
Percentage : For any
Distribution Date, the Priority Percentage multiplied by the
Stepdown Percentage for such Distribution Date.
Priority Principal Distribution
Amount : For any
Distribution Date, the lesser of (a) 98% of the Senior Optimal
Principal Amount and (b) the sum of (A) the aggregate of the
Priority Scheduled Distribution Percentage multiplied by each of
the amounts referred to in clauses (i) and (ii) of the definition
“Senior Optimal Principal Amount”; and (B) the
aggregate of the Priority Prepayment Distribution Percentage
multiplied by each of the amounts referred to in clauses (iii) and
(iv) of the definition “Senior Optimal Principal
Amount”; provided , however , that if a
Bankruptcy Loss that is an Excess Loss is sustained with respect to
a Mortgage Loan that is not a Liquidated Loan, the Priority
Principal Distribution Amount will be reduced on the related
Distribution Date by the Priority Scheduled Distribution Percentage
multiplied by the Senior Percentage related to the Senior
Certificates multiplied by the applicable Non-PO Percentage
relating to the Mortgage Loans of the principal portion of such
Bankruptcy Loss multiplied by the Applicable Fraction of such
Mortgage Loan.
Priority Scheduled Distribution
Percentage: With respect
to (i) any Distribution Date prior to the Distribution Date in
February 2011, 0%; and (ii) any Distribution Date on or after the
Distribution Date in February 2011, the Priority Percentage for
such Distribution Date.
Private Certificate
: As specified in the Preliminary
Statement.
Proprietary Lease
: The lease on a Cooperative Unit
evidencing the possessory interest of the owner of the Cooperative
Shares in such Cooperative Unit.
Prospectus Supplement
: The Prospectus Supplement dated
January 26, 2006 relating to the Offered 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.
Each Protected Account is required to be an Eligible Account.
Purchase Price : With respect to any Mortgage Loan required to
be purchased by the Transferor pursuant to Section 2.02 or 2.03
hereof, an amount equal to (a) the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such
purchase, (ii) accrued and unpaid interest thereon at the
applicable Mortgage Rate from the date through which interest was
last paid by the Mortgagor or the applicable Servicer or the Master
Servicer, as the case may be, made an Advance in respect thereof
(which was not reimbursed) to the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders and
(iii) in the event that such Mortgage Loan is repurchased by the
Transferor due to a breach of the Transferor's representations and
warranties listed in clauses (xiii) or (xxxiv) of Schedule II to
this Agreement relating to applicable anti-predatory and abusive
lending laws, any costs and damages incurred by the Trust in
connection with a violation of a predatory or abusive lending law
with respect to such Mortgage Loan, less (b) any Amounts
Held for Future Distribution related to such Mortgage Loan with
respect to the Distribution Date in the month in which the Purchase
Price is to be distributed to Certificateholders.
Qualified Insurer
: A mortgage guaranty insurance
company duly qualified as such under the laws of the state of its
principal place of business and each state having jurisdiction over
such insurer in connection with the insurance policy issued by such
insurer, duly authorized and licensed in such states to transact a
mortgage guaranty insurance business in such states and to write
the insurance provided by the insurance policy issued by it,
approved as a Fannie Mae approved mortgage insurer and having a
claims paying ability rating of at least “AA” or
equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing
Date.
Qualified Mortgage Insurer
: Any mortgage insurer that is
Fannie Mae and Freddie Mac approved.
Rating Agency : Each of the Rating Agencies specified in the
Preliminary Statement. If any such organization or a
successor is no longer in existence, “Rating Agency”
shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the
Trustee, the Trust Administrator. References herein to a
given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized Loss : With respect to each Mortgage Loan that is a
Liquidated Loan, an amount (not less than zero or more than the
Scheduled Principal Balance of the Mortgage Loan) as of the date of
such liquidation, equal to (i) the unpaid principal balance of the
Liquidated Loan as of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which
Liquidation Proceeds are required to be distributed on the
Scheduled Principal Balance of such Liquidated Loan from time to
time, minus (iii) the Liquidation Proceeds, if any, received
during the month in which such liquidation occurred, to the extent
applied as recoveries of interest at the Net Mortgage Rate and to
principal of the Liquidated Loan. With respect to each
Mortgage Loan which has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage
Note has been reduced, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan
as reduced by the Deficient Valuation.
Recognition Agreement
: An Agreement among a Cooperative
Corporation, a lender and a Mortgagor with respect to a Cooperative
Loan whereby such parties (i) acknowledge that such lender may
make, or intends to make, such Cooperative Loan, (ii) make certain
agreements with respect to such Cooperative Loan.
Record Date : With respect to any Distribution Date and any
Class of Certificates, the close of business on the last Business
Day of the month preceding the month in which such Distribution
Date occurs.
Recovery : With respect to any Distribution Date and any
Mortgage Loan, an amount, net of any reimbursable expenses,
received in respect of principal on such Mortgage Loan during the
related Prepayment Period, which has previously been allocated as a
Realized Loss to a Class of Certificates.
Refinancing Mortgage Loan
: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage
loan.
Regular Certificates
: As specified in the Preliminary
Statement.
Regulation AB : Subpart 229.1100 – Asset Backed
Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed Reg. 1,506, 1.531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff
from time to time.
Relevant Servicing Criteria
: The Servicing Criteria applicable
to each party, as set forth on Exhibit V attached hereto.
Multiple parties can have responsibility for the same
Relevant Servicing Criteria. With respect to a Servicing
Function Participant engaged by any of the Master Servicer, the
Trust Administrator or each Servicer, the term Relevant Servicing
Criteria may refer to a portion of the Relevant Servicing Criteria
applicable to such parties.
Relief Act : The Servicemembers Civil Relief Act, as
amended or any comparable state or local statute (including the
comparable provisions under the California Military and Veterans
Code, as amended).
Relief Act Reduction
: With respect to any Distribution
Date and any Mortgage Loan as to which there has been a reduction
in the amount of interest collectible thereon for the most recently
ended calendar month as a result of the application of the Relief
Act, the amount, if any, by which (i) interest collectible on such
Mortgage Loan for the most recently ended calendar month is less
than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC : A “real estate mortgage investment
conduit” within the meaning of section 860D of the
Code.
REMIC Change of Law
: Any proposed, temporary or final
regulation, revenue ruling, revenue procedure or other official
announcement or interpretation relating to REMICs and the REMIC
Provisions issued after the Closing Date.
REMIC Provisions
: Provisions of the federal income
tax law relating to real estate mortgage investment conduits, which
appear at sections 860A through 860G of Subchapter M of Chapter 1
of the Code, and related provisions, and regulations promulgated
thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
Reportable Event
: As defined in Section
9.12.
REO Property : A Mortgaged Property acquired by the Trust
Fund through foreclosure, deed-in-lieu of foreclosure, repossession
or otherwise in connection with a defaulted Mortgage
Loan.
Required Coupon
: 6.000% per annum.
Required Insurance Policy
: With respect to any Mortgage
Loan, any insurance policy that is required to be maintained from
time to time under the applicable Servicing Agreement.
Residual Interests
: As specified in the Preliminary
Statement.
Responsible Officer
: When used with respect to the
Trustee or the Trust Administrator, any Director, any Managing
Director, any Associate, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, any Trust
Officer or any other officer of the Trustee or Trust Administrator,
as applicable, customarily performing functions similar to those
performed by any of the above designated officers having direct
responsibility for the administration of this Agreement and also to
whom, with respect to a particular matter, such matter is referred
because of such officer’s knowledge of and familiarity with
the particular subject.
Restricted Classes
: As defined in Section
4.02(d).
S&P : Standard and Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., or any successor
thereto. If S&P is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 11.05(b), the
address for notices to S&P shall be Standard and Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc., 55
Water Street, New York, New York 10041, Attention:
Residential Mortgage Monitoring Group, or such other address
as S&P may hereafter furnish to each other party to this
Agreement.
Sarbanes-Oxley Act
: The Sarbanes-Oxley Act of 2002
and the rules and regulations of the Commission promulgated
thereunder (including any interpretations thereof by the
Commission’s staff).
Sarbanes-Oxley
Certification : As
defined in Section 9.12.
Scheduled Payment
: The scheduled monthly payment on
a Mortgage Loan due on any Due Date allocable to principal and/or
interest on such Mortgage Loan which, unless otherwise specified
herein, shall give effect to any related Debt Service Reduction and
any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Scheduled Principal Balance
: As to any Mortgage Loan and any
Distribution Date, the unpaid principal balance of such Mortgage
Loan as of such Due Date in the month preceding the month in which
such Distribution Date occurs, as specified in the amortization
schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to
principal received during the Prepayment Period for the prior
Distribution Date (other than with respect to any Liquidated Loan),
and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related
Mortgagor. The Scheduled Principal Balance of any Mortgage
Loan that has been prepaid in full or has become a Liquidated Loan
during the related Prepayment Period shall be zero.
Securities Act : The Securities Act of 1933, as
amended.
Security Agreement
: With respect to a Cooperative Loan, the
agreement or mortgage creating a security interest in favor of the
originator of the Cooperative Loan in the related Cooperative
Shares.
Senior Certificates
: As specified in the Preliminary
Statement.
Senior Final Distribution
Date : With respect to
any Group, the Distribution Date on which the respective Class
Principal Balances of the Senior Certificates in each such Group
have each been reduced to zero.
Senior Optimal Principal
Amount : For any
Distribution Date, the sum for all Mortgage Loans of (i) the Senior
Percentage of the applicable Non-PO Percentage of: (a) the
principal portion of each Scheduled Payment (without giving effect,
prior to the Bankruptcy Coverage Termination Date, to any
reductions thereof caused by any Debt Service Reductions or
Deficient Valuations) due on each such Mortgage Loan on the related
Due Date, (b) the principal portion of the Purchase Price of each
such Mortgage Loan that was repurchased by the Transferor pursuant
to this Agreement as of such Distribution Date, (c) the
Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan received with respect to such Distribution Date and
(d) any Liquidation Proceeds (including Insurance Proceeds)
allocable to recoveries of principal of Mortgage Loans that are not
yet Liquidated Loans received during the calendar month preceding
the month of such Distribution Date, (ii) with respect to each such
Mortgage Loan that became a Liquidated Loan during the calendar
month preceding the month of such Distribution Date, the lesser of
(a) the Senior Percentage of the applicable Non-PO Percentage of
the Scheduled Principal Balance of such Mortgage Loan, or (b)
either (A) the Senior Prepayment Percentage, or (B) if an Excess
Loss was sustained with respect to such Liquidated Loan during such
prior calendar month, the Senior Percentage, of the applicable
Non-PO Percentage of the amount of the Liquidation Proceeds
allocable to principal received with respect to such Mortgage Loan,
(iii) the Senior Prepayment Percentage of the applicable Non-PO
Percentage of the sum of (a) all Principal Prepayments in Full
received on the Mortgage Loans during the related Prepayment Period
and (b) all partial Principal Prepayments on the Mortgage Loans
applied during the related Prepayment Period, and (iv) with respect
to any Distribution Date prior to the Cross-Over Date only, the
Senior Prepayment Percentage of the Non-PO Recoveries received
during the related Prepayment Period; provided ,
however , that if a Bankruptcy Loss that is an Excess Loss
is sustained with respect to such Mortgage Loan that is not a
Liquidated Loan, the Senior Optimal Principal Amount will be
reduced on the related Distribution Date by the Senior Percentage
of the applicable Non-PO Percentage of the principal portion of
such Bankruptcy Loss.
Senior Percentage
: As to any Distribution Date and
the Group 1 Certificates, the lesser of (a) 100% and (b) the
percentage equivalent of a fraction the numerator of which is the
aggregate of the Class Principal Balances of each Class of Senior
Certificates (other than the Interest Only Certificates and the
related Class PO Certificates) immediately preceding such
Distribution Date and the denominator of which is the aggregate of
the applicable Non-PO Percentage multiplied by the Scheduled
Principal Balance of each Mortgage Loan for such Distribution
Date.
Senior Prepayment
Percentage : For any
Distribution Date during the five years beginning on the first
Distribution Date, 100%. The Senior Prepayment Percentage for
any Distribution Date occurring on or after the fifth anniversary
of the first Distribution Date will, except as provided herein, be
as follows: for any Distribution Date in the first year
thereafter, the Senior Percentage plus 70% of the related
Subordinate Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the Senior
Percentage plus 60% of the related Subordinate Percentage
for such Distribution Date; for any Distribution Date in the third
year thereafter, the Senior Percentage plus 40% of the
related Subordinate Percentage for such Distribution Date; for any
Distribution Date in the fourth year thereafter, the Senior
Percentage plus 20% of the related Subordinate Percentage
for such Distribution Date; and for any Distribution Date
thereafter, the Senior Percentage for such Distribution Date
(unless on any Distribution Date the Senior Percentage exceeds the
initial Senior Percentage, in which case the Senior Prepayment
Percentage for such Distribution Date will once again equal 100%).
Notwithstanding the foregoing, no decrease in the Senior
Prepayment Percentage will occur unless both of the Senior Stepdown
Conditions are satisfied; provided , however , that
if on any Distribution Date the Senior Prepayment Percentage is not
permitted to decrease because one or both of the Senior Stepdown
Conditions are not satisfied, such Senior Stepdown Conditions shall
be tested on each succeeding Distribution Date and if both Senior
Stepdown Conditions are satisfied the Senior Prepayment Percentage
shall decrease; and provided, further, that upon the occurrence of
a decrease in the Senior Prepayment Percentage during one of the
periods described in the definition of “Senior Stepdown
Conditions,” such decrease shall remain in effect for the
remainder of such period.
Senior Stepdown Conditions
: As of the last day of the month
preceding the applicable Distribution Date as to which any decrease
in the Senior Prepayment Percentage applies, (i) the aggregate
Scheduled Principal Balance of all of the Mortgage Loans delinquent
60 days or more (including delinquent Mortgage Loans in bankruptcy,
and all Mortgage Loans in foreclosure and REO Properties), as a
percentage of the aggregate Class Principal Balance of the
Subordinate Certificates on such Distribution Date, does not equal
or exceed 50% and (ii) cumulative Realized Losses with respect to
all of the Mortgage Loans do not exceed (a) with respect to the
Distribution Date on the fifth anniversary of the first
Distribution Date, 30% of the Original Subordinate Principal
Balance, (b) with respect to the Distribution Date on the sixth
anniversary of the first Distribution Date, 35% of the related
Original Subordinate Principal Balance, (c) with respect to the
Distribution Date on the seventh anniversary of the first
Distribution Date, 40% of the related Original Subordinate
Principal Balance, (d) with respect to the Distribution Date on the
eighth anniversary of the first Distribution Date, 45% of the
related Original Subordinate Principal Balance and (e) with respect
to the Distribution Date on the ninth anniversary of the first
Distribution Date, 50% of the related Original Subordinate
Principal Balance.
Servicer : Each of Cenlar, Downey, EverBank, GMACM, Mid
America, PHH and Wells Fargo, as applicable.
Servicer Remittance Date
: With respect to any Servicer and
any Distribution Date, the 18th day of each calendar month, or if
such 18th day is not a Business Day, either the immediately
preceding Business Day or the immediately succeeding Business Day,
as specified in the related Servicing Agreement.
Servicing Advances
: All customary, reasonable and
necessary “out of pocket” costs and expenses incurred
in the performance by the Master Servicer of its master servicing
obligations or the applicable Servicer, as the case may be, of its
servicing obligations, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any expenses reimbursable to the Master Servicer or
the applicable Servicer, as the case may be, pursuant to Section
3.11 and any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO
Property and (iv) compliance with the obligations under Section
3.09.
Servicing Agreements
:
(a)
the Cenlar Servicing
Agreement;
(b)
the Downey Servicing
Agreement;
(c)
the EverBank Servicing
Agreement
(d)
the GMAC Servicing Agreement;
(e)
the MidAmerica Servicing
Agreement;
(f)
the PHH Servicing Agreement;
(g)
the Wells Fargo Servicing Agreement;
and
(h)
the Assignment Agreements.
Servicing Criteria
: The “servicing
criteria” set forth in Item 1122(d) of Regulation AB, as such
may be amended from time to time.
Servicing Fee : As to each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest
received on such Mortgage Loan and equal to one twelfth of the
Servicing Fee Rate multiplied by the Scheduled Principal
Balance of such Mortgage Loan as of the Due Date in the month
immediately preceding the month in which such Distribution Date
occurs (after giving effect to any Scheduled Payments due on such
Mortgage Loan on such Due Date), subject to reduction for any
Compensating Interest payments required to be made by the
applicable Servicer.
Servicing Fee Rate
: With respect to each Mortgage
Loan, the per annum rate set forth on the Mortgage Loan
Schedule.
Servicing Function
Participant : Any
Sub-Servicer, Subcontractor or any other Person, other than a
Servicer, the Master Servicer and the Trust Administrator, that is
participating in the servicing function within the meaning of
Regulation AB, unless such Person’s activities relate only to
5% or less of the Mortgage Loans (calculated by Aggregate Pool
Principal Balance).
Special Hazard Coverage Termination
Date : The point in time
at which the Special Hazard Loss Coverage Amount is reduced to
zero.
Special Hazard Loss
: Any Realized Loss as reported by
the applicable Servicer to the Master Servicer suffered by a
Mortgaged Property on account of direct physical loss but not
including (i) any loss of a type covered by a hazard insurance
policy or a flood insurance policy required to be maintained with
respect to such Mortgaged Property pursuant to Section 3.11 to the
extent of the amount of such loss covered thereby, or (ii) any loss
caused by or resulting from:
(a)
normal wear and tear;
(b)
fraud, conversion or other dishonest act
on the part of the Trustee, the Trust Administrator, any Servicer
the Master Servicer or any of their agents or employees (without
regard to any portion of the loss not covered by any errors and
omissions policy);
(c)
errors in design, faulty workmanship or
faulty materials, unless the collapse of the property or a part
thereof ensues and then only for the ensuing loss;
(d)
nuclear or chemical reaction or nuclear
radiation or radioactive or chemical contamination, all whether
controlled or uncontrolled, and whether such loss be direct or
indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition
of the term “Special Hazard Loss”;
(e)
hostile or warlike action in time of
peace and war, including action in hindering, combating or
defending against an actual, impending or expected
attack:
(i)
by any government or sovereign power,
de jure or de facto , or by any authority maintaining
or using military, naval or air forces; or
(ii)
by military, naval or air forces;
or
(iii)
by an agent of any such government,
power, authority or forces;
(f)
any weapon of war employing nuclear
fission, fusion or other radioactive force, whether in time of
peace or war; or
(g)
insurrection, rebellion, revolution,
civil war, usurped power or action taken by governmental authority
in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations,
confiscation by order of any government or public authority or
risks of contraband or illegal transportation or trade.
Special Hazard Loss Coverage
Amount : With respect to
any Distribution Date, $3,900,000 less (i) the aggregate
amount of Special Hazard Losses that would have been previously
allocated to the Subordinate Certificates in the absence of the
Loss Allocation Limitation and (ii) the related Adjustment Amount
as of the most recent anniversary of January 1, 2006. As of
any Distribution Date on or after the Cross-Over Date, the Special
Hazard Loss Coverage Amount shall be zero.
All principal balances for the purpose of
this definition will be calculated as of the first day of the
calendar month preceding the month of such Distribution Date after
giving effect to Scheduled Payments on the Mortgage Loans then due,
whether or not paid.
Special Hazard Mortgage
Loan : A Liquidated Loan
as to which a Special Hazard Loss has occurred.
Standard & Poor’s
Glossary : The current
Standard & Poor’s LEVELS® Glossary, as may be in
effect from time to time.
Startup Day : The Closing Date.
Stepdown Percentage
: With respect to any Distribution Date,
the percentage indicated below:
Distribution Date Occurring
|
|
|
February 2006 through January 2011
|
0%
|
|
February 2011 through January 2012
|
30%
|
|
February 2012 through January 2013
|
40%
|
|
February 2013 through January 2014
|
60%
|
|
February 2014 through January 2015
|
80%
|
|
After January 2015
|
100%
|
Stock Power : With respect to a Cooperative Loan, an
assignment of the stock certificate or an assignment of the
Cooperative Shares issued by the Cooperative
Corporation.
Stripped Interest Rate
: With respect to each Non-Discount
Mortgage Loan, the excess of the Net Mortgage Rate for such
Mortgage Loan over the Required Coupon for such Mortgage
Loan.
Subcontractor : Any outsourcer that performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to more than 5% but less than 10% of the Mortgage Loans
under the direction or authority of the Master Servicer, the Trust
Administrator, the Custodian or a Servicer (measured by Aggregate
Pool Principal Balance of the Mortgage Loans, annually at the
commencement of the calendar year prior to the year in which an
Assessment of Compliance is required to be delivered, multiplied by
a fraction, the numerator of which is the number of months during
which such Subcontractor performs such discrete functions and the
denominator of which is 12, or, in the case of the year in which
the Closing Date occurs, the number of months elapsed in such
calendar year).
Subordinate Certificates
: As specified in the Preliminary
Statement.
Subordinate Optimal Principal
Amount : For any
Distribution Date, the sum for each Mortgage Loan of (i) the
Subordinate Percentage of the applicable Non-PO Percentage of: (a)
the principal portion of each Scheduled Payment (without giving
effect, prior to the Bankruptcy Coverage Termination Date, to any
reductions thereof caused by any Debt Service Reductions or
Deficient Valuations) due on each such Mortgage Loan on the related
Due Date, (b) the principal portion of the Purchase Price of each
such Mortgage Loan that was repurchased by the Transferor pursuant
to this Agreement as of such Distribution Date, (c) the
Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan received with respect to such Distribution Date and
(d) any Liquidation Proceeds (including Insurance Proceeds)
allocable to recoveries of principal of Mortgage Loans that are not
yet Liquidated Loans received during the calendar month preceding
the month of such Distribution Date, (ii) with respect to each such
Mortgage Loan that became a Liquidated Loan during the calendar
month preceding the month of such Distribution Date, the portion of
the applicable Non-PO Percentage of the amount of the Liquidation
Proceeds allocable to principal received with respect to such
Mortgage Loan that was not included in clause (ii) of the
definition of “Senior Optimal Principal Amount” with
respect to such Distribution Date, (iii) the Subordinate Prepayment
Percentage of the applicable Non-PO Percentage of the sum of (A)
all Principal Prepayments in full received on the Mortgage Loans
during the related Prepayment Period and (B) all partial Principal
Prepayments on the Mortgage Loans applied during the related
Prepayment Period, and (iv) with respect to any Distribution Date
prior to the Cross-Over Date only, the Subordinate Prepayment
Percentage of the Non-PO Recoveries received during the related
Prepayment Period; provided , however , that if a
Bankruptcy Loss that is an Excess Loss is sustained with respect to
a Mortgage Loan that is not a Liquidated Loan, the Subordinate
Optimal Principal Amount will be reduced on the related
Distribution Date by the Subordinate Percentage of the applicable
Non-PO Percentage of the principal portion of such Bankruptcy
Loss.
Subordinate Percentage
: As to any Distribution Date, 100%
minus the Senior Percentage for such Distribution
Date.
Subordinate Prepayment
Percentage : As to any
Distribution Date, 100% minus the Senior Prepayment
Percentage for such Distribution Date, except that, on any
Distribution Date after the Senior Final Distribution Date, the
Subordinate Prepayment Percentage will equal 100%.
Subordinate Principal Distribution
Amount : With respect to
the Subordinate Certificates, the aggregate amount which would be
payable as principal on the Subordinate Certificates from Available
Funds, after application of Available Funds (i) to make payments on
the Senior Certificates, in accordance with Section 4.02(a)(i)
items first and second and Section 4.02(e) and (ii)
to make payments of Accrued Certificate Interest to the Subordinate
Certificates in accordance with Section 4.02(a)(i) priority
fifth .
Subservicer : Any Person that services Mortgage Loans on
behalf of a Servicer pursuant to a Subservicing Agreement and is
responsible for the performance of the material servicing functions
required to be performed by the related Servicer under the related
Servicing Agreement that are identified in Item 1122(d) of
Regulation AB with respect to 10% or more of the Mortgage Loans
under the direction or authority of a Servicer (measured by
Aggregate Pool Principal Balance of the Mortgage Loans, annually at
the commencement of the calendar year prior to the year in which an
Assessment of Compliance is required to be delivered, multiplied by
a fraction, the numerator of which is the number of months during
which such Subservicer services the related Mortgage Loans and the
denominator of which is 12, or, in the case of the year in which
the Closing Date occurs, the number of months elapsed in such
calendar year).
Subsidiary REMIC
: As specified in the Preliminary
Statement.
Subsidiary REMIC Regular
Interest : As specified
in the Preliminary Statement.
Substitution Adjustment
Amount : The meaning
ascribed to such term pursuant to Section 2.03.
Supplemental Interest Trust
: A trust created pursuant to
Section 4.07 of this Agreement, separate from the Trust Fund, the
corpus of which shall be held by the Trust Administrator, in trust,
for the benefit of the holders of the Class A-2 Certificates and
the Class Y Certificates.
Tax Matters Person
: In the case of each REMIC created
by this Agreement, the person designated as “tax matters
person” in the manner provided under Treasury Regulations
Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1 for such REMIC.
Transfer : Any direct or indirect transfer or sale of
any Ownership Interest in a Residual Certificate.
Transferor : UBS Real Estate Securities Inc., a Delaware
corporation, seller of the Mortgage Loans to the Depositor pursuant
to the Mortgage Loan Purchase Agreement.
Trust : As defined in Section 2.01(c).
Trust Administrator
: Wells Fargo Bank, N.A., a
national banking association, and its successors and assigns, in
its capacity as Trust Administrator hereunder.
Trust Administrator
Compensation : All
investment earnings on amounts on deposit in the Distribution
Account.
Trust Fund : The corpus of the trust created hereunder
consisting of: (a) the Mortgage Loan Purchase Agreement and
the Servicing Agreements solely as each such Servicing Agreement
relates to the Mortgage Loans being serviced by the related
Servicer (other than those rights under the Servicing Agreements
that do not relate to servicing of the Mortgage Loans (including,
without limitation, the representations and warranties made by the
applicable Servicer (with respect to the Mortgage Loans sold to the
Transferor) and the document delivery requirements of such Servicer
and the remedies (including indemnification) available for breaches
thereto), which rights were retained by the Transferor pursuant to
the Assignment Agreements); (b) the Mortgage Loans and all interest
and principal received on or with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof; (c) the Collection Account and the
Distribution Account, and all amounts deposited therein pursuant to
the applicable provisions of this Agreement (other than, in the
case of the Collection Account, any prepayment penalties (exclusive
of the Class P Prepayment Charges) deposited therein which shall be
retained by the Transferor); (d) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; and (e) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trustee : U.S. Bank, and, if a successor trustee is
appointed hereunder, such successor.
Underwriter’s
Exemption : Prohibited
Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), as
amended (or any successor thereto), or any substantially similar
administrative exemption granted by the U.S. Department of
Labor.
U.S. Bank : U.S. Bank National Association, a national
banking association, and its successors and assigns.
Voting Rights : The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. As of
any date of determination, (a) the Interest Only Certificates will
be entitled to 1% in the aggregate of all Voting Rights (such
Voting Rights to be allocated among the Holders of Certificates of
each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the
Class P Certificates and (c) the remaining Voting Rights (and the
Voting Rights allocated to the Interest Only Certificates if there
are no Interest Only Certificates) shall be allocated among Holders
of the remaining Classes of Certificates in proportion to the
Certificate Principal Balances of their respective Certificates on
such date.
Wells Fargo : Wells Fargo Bank, N.A., and its successors
and assigns in its capacity as Master Servicer, Trust Administrator
or Custodian, or as Servicer of the Wells Fargo Serviced Mortgage
Loans, as the case may be, hereunder.
Wells Fargo Serviced Mortgage
Loans : The Mortgage
Loans for which Wells Fargo is listed as “Servicer” on
the Mortgage Loan Schedule.
Wells Fargo Servicing
Agreement : Solely with
respect to the Wells Fargo Serviced Mortgage Loans, the Master
Seller’s Warranties and Servicing Agreement, dated as of
July 1, 2002, between the Transferor and Wells Fargo (f/k/a
Wells Fargo Home Mortgage, Inc.), as amended by the First Addendum,
dated as of January 1, 2003, the Amendment Number One, dated as of
February 28, 2003, and as further amended by the Second Addendum,
dated as of April 1, 2005, and as the same may be further amended
from time to time, and any assignments and conveyances relating to
the Wells Fargo Serviced Mortgage Loans.
Section 1.02
Certain Calculations
.
Unless otherwise specified herein, for
purposes of determining amounts with respect to the Certificates
and the rights and obligations of the parties hereto, all
calculations of interest (other than as provided in the Mortgage
Loan documents) provided for herein shall be made on the basis of a
360-day year consisting of twelve 30 day months.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage
Loans .
(a)
The Depositor, concurrently with the
execution and delivery hereof, hereby sells, transfers, assigns,
sets over and otherwise conveys to the Trustee for the benefit of
the Certificateholders, without recourse, all the right, title and
interest of the Depositor in and to the Trust Fund. In
connection with the foregoing assignments, the Transferor has
caused each Servicer to enter into the related Assignment
Agreement.
(b)
(i) In connection with the transfer
and assignment set forth in clause (a) above, the Depositor has
delivered or caused to be delivered to the Custodian, on behalf of
the Trustee, for the benefit of the Certificateholders the
following documents or instruments with respect to each Mortgage
Loan that is not a Cooperative Loan so assigned:
(A)
the original Mortgage Note endorsed by
manual or facsimile signature in blank in the following form:
“Pay to the order of ___________ without
recourse,” with all intervening endorsements showing a
complete chain of endorsement from the originator to the Person
endorsing the Mortgage Note (each such endorsement being sufficient
to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note); or, with respect to any Lost Mortgage Note, a lost
note affidavit from the related originator or the Transferor
stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(B)
except as provided below, the original
recorded Mortgage or a copy of such Mortgage certified by the
related originator as being a true and complete copy of the
Mortgage;
(C)
a duly executed assignment of the
Mortgage (which may be included in a blanket assignment or
assignments), endorsed in the following form: “U.S.
Bank National Association, in trust for the MASTR Alternative Loan
Trust 2006-1 for the benefit of the Holders of the Mortgage
Pass-Through Certificates, Series 2006-1” together with,
except as provided below, all interim recorded assignments of such
mortgage (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to which
the assignment relates); provided that, if the related
Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the information
to be provided by the recording office;
(D)
the original or copies of each
assumption, modification, written assurance or substitution
agreement, if any; and
(E)
except as provided below, the original or
duplicate original lender’s title policy and all riders
thereto.
(ii)
In connection with the transfer and
assignment set forth in clause (a) above, the Depositor has
delivered or caused to be delivered to the Custodian, on behalf of
the Trustee, for the benefit of the Certificateholders the
following documents or instruments with respect to each Cooperative
Loan so assigned:
(A)
the Cooperative Shares, together with the
Stock Power in blank;
(B)
the executed Security
Agreement;
(C)
the executed Proprietary Lease and the
Assignment of Proprietary Lease to the originator of the
Cooperative Loan;
(D)
the executed Recognition
Agreement;
(E)
copies of the original Financing
Statement, and any continuation statements, filed by the originator
of such Cooperative Loan as secured party, each with evidence of
recording thereof, evidencing the interest of the originator under
the Security Agreement and the Assignment of Proprietary
Lease;
(F)
copies of the filed UCC assignments or
amendments of the security interest referenced in clause (v) above
showing an unbroken chain of title from the originator to the Trust
Fund, each with evidence of recording thereof, evidencing the
interest of the assignee under the Security Agreement and the
Assignment of Proprietary Lease;
(G)
an executed assignment of the interest of
the originator in the Security Agreement, the Assignment of
Proprietary Lease and the Recognition Agreement, showing an
unbroken chain of title from the originator to the Trust;
and
(H)
for any Cooperative Loan that has been
modified or amended, the original instrument or instruments
effecting such modification or amendment.
Notwithstanding the foregoing, if any
Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. (“MERS”) or its designee, no
assignment of Mortgage in favor of the Trustee will be required to
be prepared or delivered and instead, the Master Servicer shall
enforce the obligations of the applicable Servicer under its
related Servicing Agreement to cause the Trustee to be shown as the
owner of the related Mortgage Loan on the records of MERS for the
purpose of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
If in connection with any Mortgage Loan
the Depositor cannot deliver (a) the original recorded Mortgage,
(b) all interim recorded assignments or (c) the lender’s
title policy (together with all riders thereto) satisfying the
requirements of clause (b)(i)(B), (C) or (E) above, respectively,
concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable
public recording office in the case of clause (b)(i)(B) or (C)
above, or because the title policy has not been delivered to either
the Custodian or the Depositor by the applicable title insurer in
the case of clause (b)(i)(E) above, the Depositor shall promptly
deliver to the Custodian, in the case of clause (b)(i)(B) or (C)
above, such original Mortgage or such interim assignment, as the
case may be, with evidence of recording indicated thereon upon
receipt thereof from the public recording office, or a copy
thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original
Mortgage and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, be
made later than one year following the Closing Date, or, in the
case of clause (b)(i)(E) above, no later than 120 days following
the Closing Date; provided , however , in the event
the Depositor is unable to deliver by such date each Mortgage and
each such interim assignment by reason of the fact that any such
documents have not been returned by the appropriate recording
office, or, in the case of each such interim assignment, because
the related Mortgage has not been returned by the appropriate
recording office, the Depositor shall deliver such documents to the
Custodian as promptly as possible upon receipt thereof and, in any
event, within 720 days following the Closing Date. The
Depositor shall forward or cause to be forwarded to the Custodian
(a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor to the
Custodian. In the event that the original Mortgage is not
delivered and in connection with the payment in full of the related
Mortgage Loan and the public recording office requires the
presentation of a “lost instruments affidavit and
indemnity” or any equivalent document, because only a copy of
the Mortgage can be delivered with the instrument of satisfaction
or reconveyance, the Custodian shall execute and deliver or cause
to be executed and delivered such a document to the public
recording office. In the case where a public recording office
retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office,
the Transferor shall deliver to the Custodian a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
As promptly as practicable subsequent to
such transfer and assignment, set forth in clause (a) above and in
any event, within ninety (90) days thereafter, the Custodian shall
affix the Trustee’s name to each assignment of Mortgage, as
the assignee thereof, and, subject to Section 2.02, the Master
Servicer shall enforce the obligations of the related Servicer
pursuant to the related Servicing Agreement to (i) cause such
assignment to be in proper form for recording in the appropriate
public office for real property records and (ii) cause to be
delivered for recording in the appropriate public office for real
property records the assignments of the Mortgages to the Trustee,
except that, with respect to any assignments of Mortgage as to
which the related Servicer has not received the information
required to prepare such assignment in recordable form, the related
Servicer’s obligation to do so and to deliver the same for
such recording shall be as soon as practicable after receipt of
such information and in any event within ninety (90) days after
receipt thereof and except that the related Servicer need not cause
to be recorded any assignment which relates to a Mortgage Loan (a)
in any state where, in an Opinion of Counsel addressed to the
Trustee, such recording is not required to protect the
Trustee’s interests in the Mortgage Loan against the claim of
any subsequent transferee or any successor to or creditor of the
Depositor or the Transferor, (b) in any state where recordation is
not required by either Rating Agency to obtain the initial ratings
on the Certificates set forth in the Prospectus Supplement or (c)
with respect to any Mortgage which has been recorded in the name of
MERS, or its designee. As of the date hereof, recordation is
not required in any state by either Rating Agency to obtain the
initial rating on the Certificates (upon which statement the Master
Servicer, the Trustee and the Custodian may each conclusively
rely).
In the case of Mortgage Loans that have
been prepaid in full as of the Closing Date, the Depositor, in lieu
of delivering the above documents to the Master Servicer on behalf
of the Trustee, will deposit in the Collection Account the portion
of such payment that is required to be deposited in the Collection
Account pursuant to Section 3.07 hereof.
(c)
The Depositor does hereby establish,
pursuant to the further provisions of this Agreement and the laws
of the State of New York, an express trust (the
“Trust”) to be known, for convenience, as “MASTR
Alternative Loan Trust 2006-1” and U.S. Bank National
Association is hereby appointed as Trustee in accordance with the
provisions of this Agreement.
(d)
[Reserved].
(e)
Each of the Collection Account and
Distribution Account shall at all times be an Eligible Account,
provided that the Collection Account may be deemed to be a
sub-account of the Distribution Account. If at any time
either the Collection Account or the Distribution Account ceases to
be an Eligible Account, the Master Servicer or the Trust
Administrator, as applicable, shall immediately establish and
maintain a new Collection Account or Distribution Account, as
applicable, that is an Eligible Account, and shall immediately
transfer all funds on deposit in the former Collection Account or
Distribution Account, as applicable, to the new Collection Account
or Distribution Account, as applicable.
(f)
It is agreed and understood by the
Trustee, the Trust Administrator, the Depositor and the Transferor
that it is not intended that any mortgage loan be included in the
Trust that is a “High-Cost Home Loan” as defined in the
New Jersey Home Ownership Act, effective as of November 27, 2003,
or The Home Loan Protection Act of New Mexico, effective as of
January 1, 2004, or that is a “High Cost Home Mortgage
Loan” as defined in the Massachusetts Predatory Home Loan
Practices Act, effective as of November 7, 2004, or that is an
“Indiana High Cost Home Mortgage Loan” as defined in
the Indiana High Cost Home Loan Act, effective as of January 1,
2005.
(g)
The Depositor hereby directs the Trust
Administrator to execute, deliver and perform its obligations under
the Cap Contract. The Transferor, the Depositor, the Master
Servicer, the Trustee and the Holders of the Class A-2 Certificates
by their acceptance of such Certificates acknowledge and agree that
the Trust Administrator shall execute, deliver and perform its
obligations under the Cap Contract and shall do so solely in its
capacity as Trust Administrator, and not in its individual
capacity. Every provision of this Agreement relating to the conduct
or affecting the liability of or affording protection to the Trust
Administrator shall apply to the Trust Administrator’s
execution of the Cap Contract, and to the performance of its duties
and satisfaction of its obligations thereunder. The Depositor
represents that the representations to be made by the Trust
Administrator on behalf of the Trust in the Cap Contract are true
and correct.
(h)
The Depositor hereby authorizes and
directs the Trustee to execute, deliver and perform its obligations
under the Termination Agreement, dated as of January 31, 2006, by
and between the Trustee and GMAC Mortgage Corporation, and as
acknowledged by UBS Real Estate Securities Inc., Mortgage Asset
Securitization Transactions, Inc. and Wells Fargo Bank,
N.A.
Section 2.02
Acceptance by Trustee of the Mortgage
Loans .
The Custodian, on behalf of the Trustee,
acknowledges receipt of the documents identified in the Initial
Certification issued by it in the form annexed hereto as Exhibit G
and declares that it holds and will hold such related documents and
the other documents delivered to it constituting the Mortgage
Files, and the Custodian and Trustee together declare that it holds
or will hold such other assets as are included in the Trust Fund,
in trust for the exclusive use and benefit of all present and
future Certificateholders. The Custodian acknowledges that it
will maintain possession of the Mortgage Notes held by it in the
State of Minnesota, unless otherwise permitted by the Rating
Agencies and the Trustee.
The Custodian agrees to execute and
deliver on the Closing Date to the Depositor and the Trustee an
Initial Certification in the form annexed hereto as Exhibit G.
Based on its review and examination, and only as to the
documents identified in such Initial Certification, the Custodian
acknowledges, subject to any applicable exceptions noted on Exhibit
G, that such documents appear regular on their face and relate to
such Mortgage Loan. The Custodian shall not be under any duty
or obligation to (i) 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 in the real estate
records or that they are other than what they purport to be on
their face or (ii) determine whether the Mortgage File should
include any of the documents specified in Section 2.01(b)(i)(D)
with respect to each Mortgage Loan that is not a Cooperative Loan
and Section 2.01(b)(ii)(H) with respect to each Cooperative Loan,
unless the Mortgage Loan Schedule indicates that such documents are
applicable.
Not later than 90 days after the Closing
Date, the Custodian shall deliver to the Depositor, the Trustee and
the Transferor a Final Certification in the form annexed hereto as
Exhibit H, with any applicable exceptions noted thereon. The
Custodian shall make available, upon request of any
Certificateholder, a copy of any exceptions noted on the Initial
Certification or the Final Certification. The Custodian shall
make available, upon request of the Trustee, the identity of the
originator for any Mortgage Loan with a material
exception.
If, in the course of such review, the
Custodian finds any document constituting a part of a related
Mortgage File which does not meet the requirements of Section 2.01,
the Custodian shall list such as an exception in the Final
Certification; provided , however , that the
Custodian shall not make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest
of the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note, (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to
the assignee thereof under the mortgage to which the assignment
relates or (iii) the Mortgage File should include any of the
documents specified in Section 2.01(b)(i)(D) with respect to each
Mortgage Loan that is not a Cooperative Loan and Section
2.01(b)(ii)(H) with respect to each Cooperative Loan, unless the
Mortgage Loan Schedule indicates that such documents are
applicable.
Upon receiving each Final Certification
from the Custodian, the Trustee shall notify the Transferor of any
document defects listed as exceptions in each such Final
Certification. The Transferor shall promptly correct or cure
such document defects, and if the Transferor fails to correct or
cure the defect within ninety (90) days of the earlier of its
discovery or its receipt of written notice from the Trustee, and
such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Transferor
shall repurchase the affected Mortgage Loan from the Trustee at the
Purchase Price. Any such purchase of a Mortgage Loan shall
not be effected prior to the delivery to the Custodian of a Request
for Release substantially in the form of Exhibit M. The
Purchase Price for any such Mortgage Loan shall be paid by the
Transferor to the Master Servicer for deposit in the Collection
Account on or prior to the Distribution Account Deposit Date for
the Distribution Date in the month following the month of
repurchase and, upon receipt of such deposit, the Master Servicer
shall instruct the Custodian to release, and the Custodian shall
release, the related Mortgage File to the Transferor and the
Trustee shall execute and deliver at the Transferor’s written
request such instruments of transfer or assignment prepared by the
Transferor, in each case without recourse, representation or
warranty, as shall be necessary to vest in the Transferor, or a
designee, the Trustee’s interest in any Mortgage Loan
released pursuant hereto. The Transferor shall promptly
reimburse the Master Servicer and the Trustee for any expenses
reasonably incurred by the Master Servicer or the Trustee in
respect of enforcing such repurchase by the Transferor.
The Custodian shall retain possession and
custody of each related Mortgage File in accordance with and
subject to the terms and conditions set forth herein.
Pursuant to the terms of the related Servicing Agreement, the
Master Servicer shall cause each of the related Servicers to
promptly deliver to the Custodian who shall thereupon promptly
deposit within each Mortgage File, upon the execution or receipt
thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the
related Servicers from time to time.
It is understood and agreed that the
obligations of the Transferor hereunder to purchase any Mortgage
Loan which does not meet the requirements of Section 2.01 above or
substitute for the related Mortgage Loan an Eligible Substitute
Mortgage Loan shall constitute the sole remedies respecting such
defect available to the Trustee, the Master Servicer, the Depositor
and any Certificateholder.
Section 2.03
Remedies for Breaches of
Representations and Warranties .
The Transferor hereby makes the
representations and warranties set forth in Schedule II hereto, and
by this reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as of
the Cut-off Date. With respect to any of the representations
and warranties set forth on Schedule II hereto which are made to
the best of the Transferor’s knowledge, if it is discovered
by any of the Depositor, the Master Servicer, the Transferor, any
Servicer, the Trustee or the Trust Administrator that the substance
of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interests of the Certificateholders
therein, notwithstanding the Transferor’s lack of knowledge
with respect to the substance of such representation or warranty,
such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Upon discovery by any of the parties
hereto of a breach of a representation or warranty made by the
Transferor pursuant to this Section 2.03 that materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt
notice thereof to the other parties. A breach which causes a
Mortgage Loan not to constitute a “qualified mortgage”
within the meaning of Section 860G(a)(3) of the Code, will be
deemed automatically to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan.
Upon receiving notice of a breach, the Trustee shall in turn
notify the Transferor of such breach. The Trustee shall
enforce the obligations of the Transferor in accordance with this
Section 2.03 to correct or cure any such breach of a representation
or warranty made herein, and if the Transferor 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
Transferor’s obligations hereunder to (i) purchase such
Mortgage Loan at the Purchase Price or (ii) substitute for the
related Mortgage Loan an Eligible Substitute Mortgage Loan.
In each case, such Mortgage Loan (a “Deleted Mortgage
Loan”) will be removed from the Trust Fund.
The Transferor hereby covenants that
within ninety (90) days of the earlier of its discovery or its
receipt of written notice from any party of a breach of any
representation or warranty made pursuant to this Section 2.03 which
materially and adversely affects the interest of the
Certificateholders in any Mortgage Loan, it shall cure such breach
in all material respects, and if such breach is not so cured,
shall, (i) if such ninety (90) day period expires prior to the
second anniversary of the Closing Date, remove such Deleted
Mortgage Loan from the Trust Fund and substitute in its place an
Eligible Substitute Mortgage Loan or Loans into the Trust Fund, in
the manner and subject to the conditions set forth in this Section;
or (ii) repurchase the affected Mortgage Loan or Mortgage Loans
from the Trustee at the Purchase Price in the manner set forth
below. The Transferor shall promptly reimburse the Master
Servicer and the Trustee for any expenses reasonably incurred by
the Master Servicer or the Trustee in respect of enforcing the
remedies for such breach by the Transferor.
With respect to any Eligible Substitute
Mortgage Loan or Loans, the Transferor shall deliver to the
Custodian on behalf of the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related
assignment of the Mortgage, and such other documents and agreements
as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made on any day in any calendar
month after the Determination Date for such month.
With respect to substitutions made by the
Transferor, Scheduled Payments due with respect to Eligible
Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Transferor on
the next succeeding Distribution Date. For the month of
substitution, distributions to Certificateholders will include the
monthly payment due on any Deleted Mortgage Loan for such month and
thereafter the Transferor shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The
Custodian shall amend the Mortgage Loan Schedule for the benefit of
the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Eligible Substitute
Mortgage Loan or Loans and the Custodian shall deliver the amended
Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Eligible Substitute Mortgage Loan or Loans shall
be subject to the terms of this Agreement in all respects, and the
Transferor shall be deemed to have made with respect to such
Eligible Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to
this Section 2.03 with respect to such Mortgage Loan. Upon
any such substitution and the deposit to the Collection Account of
the amount required to be deposited therein in connection with such
substitution as described in the following paragraph shall release
the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Transferor and shall
execute and deliver or cause the Trustee to execute and deliver at
the Transferor’s direction such instruments of transfer or
assignment prepared by the Transferor, without recourse,
representation or warranty, as shall be necessary to vest title in
the Transferor, as applicable, or its designee, the Trustee’s
interest in any Deleted Mortgage Loan substituted for pursuant to
this Section 2.03.
For any month in which the Transferor
substitutes one or more Eligible Substitute Mortgage Loans for one
or more Deleted Mortgage Loans, the Master Servicer will determine
the amount (if any) by which the aggregate principal balance of all
such Eligible Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Scheduled Principal Balance
of all such Deleted Mortgage Loans (after application of the
scheduled principal portion of the monthly payments due in the
month of substitution). The amount of such shortage (the
“Substitution Adjustment Amount”) plus an amount
equal to the aggregate of any unreimbursed Advances with respect to
such Deleted Mortgage Loans shall be remitted by the Transferor to
the Master Servicer, and the Master Servicer shall deposit such
amounts received from the Transferor into the Collection Account on
or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during
which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that the Transferor shall
have repurchased a Mortgage Loan, the Purchase Price therefor shall
be deposited in the Collection Account pursuant to Section 3.07 on
or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the
Transferor became obligated hereunder to repurchase or replace such
Mortgage Loan and upon such deposit of the Purchase Price and
receipt of a Request for Release in the form of Exhibit M hereto,
the Custodian shall release the related Mortgage File held for the
benefit of the Certificateholders to the Transferor, and the
Trustee shall execute and deliver at the Transferor’s
direction such instruments of transfer or assignment prepared by
the Transferor, in each case without recourse, representation or
warranty, as shall be necessary to transfer title from the Trustee.
It is understood and agreed that the obligation under this
Agreement of the Transferor to cure, repurchase or replace any
Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedies against the Transferor
respecting such matters available to Certificateholders, the Master
Servicer, the Depositor, the Trust Administrator or the Trustee on
their behalf.
The provisions of this Section 2.03 shall
survive the conveyance and assignment of the Mortgage Files to the
Trustee and the delivery of the respective Mortgage Files to the
Custodian for the benefit of the Trustee and the
Certificateholders.
Section 2.04
Representations and Warranties of the
Depositor as to the Mortgage Loans .
The Depositor hereby represents and
warrants to the Trustee, the Trust Administrator and the Master
Servicer with respect to each Mortgage Loan as of the date hereof
or such other date set forth herein that as of the Closing Date,
and following the transfer of the Mortgage Loans to it by the
Transferor, the Depositor had good title to the Mortgage Loans and
the Mortgage Notes were subject to no offsets, liens, defenses or
counterclaims.
It is understood and agreed that the
representations and warranties set forth in this Section 2.04 shall
survive delivery of the Mortgage Files to the Custodian. Upon
discovery by the Depositor, the Transferor, the Master Servicer,
the Trust Administrator or the Trustee of a breach of any of the
foregoing representations and warranties set forth in this Section
2.04 (referred to herein as a “breach”), which breach
materially and adversely affects the interest of the
Certificateholders, the party discovering such breach shall give
prompt written notice to the other parties hereto and to each
Rating Agency.
Section 2.05
[Reserved] .
Section 2.06
Execution and Delivery of
Certificates .
The Trustee acknowledges the transfer and
assignment to it of the Trust Fund and acknowledges the issuance of
the REMIC interests as described in the Preliminary Statement in
exchange therefor. The Trustee further acknowledges the
transfer and assignment to it of the uncertificated REMIC interests
described in the Preliminary Statement and, concurrently with such
transfer and assignment, the Trust Administrator, on its behalf,
has executed, authenticated and delivered to or upon the order of
the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust
Fund. The Trustee agrees to hold the Trust Fund and the
uncertificated REMIC interests described in the Preliminary
Statement and to exercise the rights referred to above for the
benefit of all present and future Holders of the Certificates and
to perform the duties set forth in this Agreement to the best of
its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively
protected.
Section 2.07
REMIC Matters .
The Preliminary Statement sets forth the
designations as “regular interests” or “residual
interests” and “latest possible maturity date”
for federal income tax purposes of all interests created hereby.
The “Startup Day” for purposes of the REMIC
Provisions shall be the Closing Date. Each REMIC’s
fiscal year shall be the calendar year.
Section 2.08
Covenants of the Master
Servicer .
The Master Servicer hereby covenants to
the Depositor and the Trustee as follows:
(a)
subject to Section 3.01, the Master
Servicer shall cause each Servicer to perform its obligations under
the applicable Servicing Agreement; and
(b)
no written information, certificate of an
officer, statement furnished in writing or written report delivered
to the Depositor, any affiliate of the Depositor or the Trustee and
prepared by the Master Servicer pursuant to this Agreement will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make such information, certificate,
statement or report not misleading at the time provided.
Section 2.09
Representations and Warranties of the
Master Servicer .
The Master Servicer hereby represents and
warrants to the Depositor, the Trustee and the Custodian, as of the
Closing Date, or if so specified herein, as of the Cut-off
Date:
(a)
The Master Servicer is duly organized as
a national banking association and is validly existing and in good
standing under the laws of the United States of America and is duly
authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or
is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to master service the Mortgage
Loans in accordance with the terms of this Agreement and to perform
any of its other obligations under this Agreement in accordance
with the terms hereof.
(b)
The Master Servicer has the full power
and authority to master service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized
by all necessary action on the part of the Master Servicer the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with its terms, except that (i) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors’ rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(c)
The execution and delivery of this
Agreement by the Master Servicer, and the master servicing of the
Mortgage Loans by the Master Servicer under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of the Master
Servicer and will not (i) result in a material breach of any term
or provision of the articles of incorporation or by-laws of the
Master Servicer, (ii) materially conflict with, result in a
material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement
or instrument to which the Master Servicer is a party or by which
it may be bound, or (iii) constitute a material violation of any
statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Master Servicer; and the Master
Servicer is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Master
Servicer’s ability to perform or meet any of its obligations
under this Agreement.
(d)
The Master Servicer or an affiliate
thereof is an approved servicer of conventional mortgage loans for
Fannie Mae or Freddie Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act.
(e)
No litigation is pending or, to the
knowledge of the Master Servicer, threatened against the Master
Servicer that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the
Master Servicer to master service the Mortgage Loans or to perform
any of its other obligations under this Agreement in accordance
with the terms thereof.
(f)
No consent, approval, authorization or,
to the knowledge of the Master Servicer, order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the
Master Servicer with, this Agreement or the consummation of the
transactions contemplated thereby, or if any such consent,
approval, authorization or order is required, the Master Servicer
has obtained the same.
Section 2.10
Representations and Warranties of the
Custodian .
The Custodian hereby represents and
warrants to the Depositor, the Master Servicer, the Trust
Administrator and the Trustee, as of the Closing Date, or if so
specified herein, as of the Cut-off Date:
(a)
The Custodian is duly organized as a
national banking association and is validly existing and in good
standing under the laws of the United States of America and is duly
authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Custodian in
any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and,
in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to perform any of its
obligations under this Agreement in accordance with the terms
thereof.
(b)
The Custodian has the full power and
authority to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary action on the part of the
Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of the Custodian,
enforceable against the Custodian in accordance with its terms,
except that (i) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors’ rights generally and (ii) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(c)
The execution and delivery of this
Agreement by the Custodian, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of the Custodian and will not (i) result in a material
breach of any term or provision of the articles of incorporation or
by-laws of the Custodian, (ii) materially conflict with, result in
a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement
or instrument to which the Custodian is a party or by which it may
be bound, or (iii) constitute a material violation of any statute,
order or regulation applicable to the Custodian of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Custodian; and the Custodian is not in breach
or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation
of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or
violation may materially impair the Custodian’s ability to
perform or meet any of its obligations under this
Agreement.
(d)
No litigation is pending or, to the
knowledge of the Custodian, threatened against the Custodian that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Custodian to
perform any of its obligations under this Agreement in accordance
with the terms thereof.
(e)
No consent, approval, authorization or
order of any court or governmental agency or body is required for
the execution, delivery and performance by the Custodian of, or
compliance by the Custodian with, this Agreement or the
consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, the
Custodian has obtained the same.
ARTICLE III
ADMINISTRATION AND MASTER
SERVICING OF MORTGAGE LOANS
Section 3.01
Master Servicing of Mortgage
Loans .
For and on behalf of the
Certificateholders, the Master Servicer shall supervise, monitor
and oversee the obligation of the Servicers to service and
administer their respective Mortgage Loans in accordance with the
terms of the applicable Servicing Agreement and shall have full
power and authority to do any and all things which it may deem
necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with this
Agreement, subject to the prior two sentences, and with customary
and usual standards of practice of prudent mortgage loan master
servicers. Furthermore, the Master Servicer shall oversee and
consult with each Servicer as necessary from time to time to carry
out the Master Servicer’s obligations hereunder, shall
receive, review and evaluate all reports, information and other
data provided to the Master Servicer by each Servicer and shall
cause each Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by such
Servicer under the applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each
Servicer’s servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis
and coordinate corrective adjustments to the Servicers’ and
Master Servicer’s records, and based on such reconciled and
corrected information, prepare the statements specified in Section
4.04 and any other information and statements required hereunder.
The Master Servicer shall reconcile the results of its
Mortgage Loan monitoring with the actual remittances of the
Servicers to the Collection Account pursuant to the applicable
Servicing Agreements.
In accordance with the standards of the
preceding paragraph and to the extent the related Servicer does not
make such advance, the Master Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the
payment of taxes and assessments on the Mortgaged Properties, which
advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.08. The costs incurred by
the Master Servicer, if any, in effecting the timely payment of
taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the
Scheduled Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
Section 3.02
Monitoring of Servicers
.
(a)
The Master Servicer shall be responsible
for reporting to the Trustee, the Trust Administrator and the
Depositor the compliance by each Servicer with its duties under the
related Servicing Agreement. In the review of each
Servicer’s activities, the Master Servicer may rely upon an
officer’s certificate of the Servicer with regard to such
Servicer’s compliance with the terms of its Servicing
Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in
accordance with its Servicing Agreement, or that a notice should be
sent pursuant to such Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds
for such termination, the Master Servicer shall notify the
Depositor, the Trust Administrator and the Trustee thereof and the
Master Servicer shall issue such notice or take such other action
as it deems appropriate.
(b)
The Master Servicer, for the benefit of
the Trustee, the Trust Administrator and the Certificateholders,
shall enforce the obligations of each Servicer under the related
Servicing Agreement, and shall, in the event that a Servicer fails
to perform its obligations in accordance with the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights
and obligations of such Servicer thereunder and act as successor
Servicer of the related Mortgage Loans or 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
will be a period of transition (not to exceed 90 days) before the
actual servicing functions can be fully transferred to such
successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies,
shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans.
The Master Servicer shall pay the costs of such enforcement
at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the
extent that the Master Servicer shall have received reasonable
indemnity for its costs and expenses in pursuing such
action.
(c)
To the extent that the costs and expenses
of the Master Servicer related to any termination of a Servicer,
appointment of a successor Servicer or the transfer and assumption
of servicing by the Master Servicer with respect to any Servicing
Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with
an evaluation of the potential termination of the 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 shall be
entitled to reimbursement of such costs and expenses from the
Collection Account.
(d)
The Master Servicer shall require each
Servicer to comply with the remittance requirements and other
obligations set forth in the related Servicing
Agreement.
(e)
If the Master Servicer acts as Servicer,
it will not assume liability for the representations and warranties
of the Servicer, if any, that it replaces.
(f)
If a Servicer fails to make its required
payment of Compensating Interest on any Distribution Date, the
Master Servicer will be required to make such payment of
Compensating Interest to the same extent that such Servicer was
required to make such payment of Compensating Interest.
(g)
To the extent a Servicer is obligated
under the related Servicing Agreement to procure the consent of the
Master Servicer in connection with the Servicer’s engagement
of a Subservicer to perform any servicing responsibilities under
the related Servicing Agreement with respect to the related
Mortgage Loans, the Master Servicer will only give such consent if
that Subservicer first agrees in writing with such Servicer and the
Master Servicer to deliver an Annual Statement of Compliance, an
Assessment of Compliance and an Accountant’s Attestation in
such manner and at such times that permit that Servicer and the
Master Servicer to comply with Sections 3.21 and 3.22 of this
Agreement.
(h)
The Master Servicer shall enforce any
negative covenant in the related Servicing Agreement which
prohibits a Servicer from outsourcing one or more separate
servicing functions under the related Servicing Agreement with
respect to the Mortgage Loans to any Subcontractor unless that
Subcontractor first agrees in writing with such Servicer and the
Master Servicer to deliver an Assessment of Compliance and an
Accountant’s Attestation in such manner and at such times
that permits that Servicer and the Master Servicer to comply with
Section 3.22 of this Agreement.
Section 3.03
[ Reserved ].
Section 3.04
Rights of the Depositor and the
Trustee in Respect of the Master Servicer .
The Depositor may, but is not obligated
to, enforce the obligations of the Master Servicer hereunder and
may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer hereunder
and in connection with any such defaulted obligation to exercise
the related rights of the Master Servicer hereunder; provided that
the Master Servicer shall not be relieved of any of its obligations
hereunder by virtue of such performance by the Depositor or its
designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by
the Master Servicer or any Servicer nor shall the Trustee or the
Depositor be obligated to supervise the performance of the Master
Servicer hereunder or any Servicer under any Servicing Agreement or
otherwise.
Section 3.05
Trustee to Act as Master
Servicer .
In the event that the Master Servicer
shall for any reason no longer be the Master Servicer hereunder
(including by reason of a Master Servicer Event of Termination),
the Trustee or its successor shall in accordance with Section 7.02
thereupon assume all of the rights and obligations of the Master
Servicer hereunder arising thereafter (except that the Trustee
shall not be (i) liable for losses of the predecessor Master
Servicer pursuant to Section 3.09 hereof (or any acts or omissions
of the predecessor Master Servicer hereunder), (ii) obligated to
make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including, but not limited to, repurchases
or substitutions of Mortgage Loans pursuant to Section 2.02 or 2.03
hereof, (iv) responsible for expenses of the Master Servicer
pursuant to Section 2.03 hereof, (v) deemed to have made any
representations and warranties of the Master Servicer pursuant to
Section 2.09 hereunder or (vi) obligated to perform any obligation
of the Master Servicer under Section 3.21 or 3.22 with respect to
any period of time the Trustee was not the Master Servicer).
Any such assumption shall be subject to Section 7.02 hereof.
If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Master Servicer Event
of Termination), the Trustee or its successor may, but shall not be
obligated to, succeed to any rights and obligations of the Master
Servicer under each subservicing agreement.
The Master Servicer shall, upon request
of the Trustee, but at the expense of the Master Servicer, deliver
to the assuming party all documents and records relating to each
subservicing agreement or substitute subservicing agreement and the
Mortgage Loans then being serviced thereunder and an accounting of
amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of each subservicing
agreement or substitute subservicing agreement to the assuming
party.
The Trustee or successor master servicer
shall be entitled to be reimbursed from the Master Servicer for all
costs associated with the transfer of master servicing from the
Master Servicer, including, without limitation, any costs or
expenses associated with the complete transfer of all master
servicing data and the completion, correction or manipulation of
such master servicing data as may be required by the Trustee or
successor master servicer to correct any errors or insufficiencies
in the master servicing data or otherwise to enable the Trustee or
successor master servicer to master service the Mortgage Loans
properly and effectively.
If the Master Servicer does not pay such
reimbursement within thirty (30) days of its receipt of an invoice
therefor, such reimbursement shall be an expense of the Trust and
the Trustee shall be entitled to such reimbursement from amounts on
deposit in the Distribution Account pursuant to Section
3.10(b)(iv); provided that the Master Servicer shall
reimburse the Trust for any such expense incurred by the
Trust.
Section 3.06
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 or amounts received with respect to
any REO Property, 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 Master Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for
purposes required or permitted by this Agreement. Permitted
Investments of funds in Protected Accounts must mature at least one
Business Day before the subsequent Distribution Date.
(b)
In accordance with the terms of the
applicable Servicing Agreement, amounts on deposit in a Protected
Account shall be invested by the applicable Servicer in Permitted
Investments. The income earned from investments made pursuant
to this Section 3.06 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.
Section 3.07
Collection of Mortgage Loan Payments;
Collection Account; Distribution Account; Cap Reserve
Fund.
(a)
The Master Servicer shall enforce the
obligation of the Servicers to collect all payments called for
under the terms and provisions of the Mortgage Loans to the extent
such procedures shall be consistent with the applicable Servicing
Agreement and the terms and provisions of any related Required
Insurance Policy.
(b)
The Master Servicer shall establish and
maintain a Collection Account, which account may be deemed to be a
sub-account of the Distribution Account, into which the Master
Servicer shall deposit or cause to be deposited within two Business
Days of receipt, except as otherwise specifically provided herein,
the following payments and collections remitted by the Servicers or
received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due
on the Mortgage Loans on or before the Cut-off Date) and the
following amounts required to be deposited hereunder:
(i)
all payments on account of principal on
the Mortgage Loans, including Principal Prepayments;
(ii)
all payments on account of interest on
the Mortgage Loans, net of the related Servicing Fee;
(iii)
all Liquidation Proceeds (including
Insurance Proceeds), other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the applicable Servicer’s or
Master Servicer’s normal servicing procedures, and all
Recoveries;
(iv)
any amount required to be deposited by
the Master Servicer pursuant to Section 3.07(e) in connection with
any losses on Permitted Investments;
(v)
any amounts required to be deposited by
the Master Servicer pursuant to Section 2.01(d), Section 3.15(b)
and 3.15(d), and in respect of net monthly rental income from REO
Property pursuant to Section 3.15 hereof;
(vi)
all Substitution Adjustment
Amounts;
(vii)
all Advances made by the Master Servicer
pursuant to Section 4.01;
(viii)
any prepayment penalties received from
any Servicer;
(ix)
any Compensating Interest
payments;
(x)
any amounts deposited by the Master
Servicer in connection with a deductible clause in any blanket
hazard insurance policy in respect of the Mortgage
Loans;
(xi)
all proceeds of any primary mortgage
guaranty insurance policy in respect of the Mortgage
Loans;
(xii)
any Class P Prepayment Charges;
and
(xiii)
any other amounts required to be
deposited hereunder.
In the event that the Master Servicer
shall deposit into the Collection Account any amount not required
to be deposited, it may at any time withdraw such amount from the
Collection Account, any provision herein to the contrary
notwithstanding. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this
Section. All funds deposited in the Collection Account shall
be held in trust for the Certificateholders until withdrawn in
accordance with Section 3.10.
(c)
[Reserved].
(d)
The Trust Administrator shall establish
and maintain, on behalf of the Certificateholders, the Distribution
Account. The Trust Administrator shall, promptly upon receipt
but no later than on the Distribution Account Deposit Date, deposit
in the Distribution Account and retain therein the
following:
(i)
the aggregate amount remitted by the
Master Servicer to the Trust Administrator pursuant to Section
3.10(a)(ix)(a);
(ii)
any amount deposited by the Master
Servicer or the Trust Administrator pursuant to Section 3.07(e) in
connection with any losses on Permitted Investments;
(iii)
[reserved];
(iv)
[reserved]; and
(v)
any other amounts described hereunder
which are required to be deposited in the Distribution
Account.
In the event that the Master Servicer
shall remit any amount not required to be remitted, it may at any
time direct the Trust Administrator in writing to withdraw such
amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished
by delivering an Officer’s Certificate to the Trust
Administrator which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution
Account shall be held by the Trust Administrator in trust for the
Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.10. Funds
deposited in the Distribution Account in respect of the Class P
Prepayment Charges shall not be treated as assets of any REMIC, but
shall be treated as assets of a separate sub-account of the
Distribution Account which shall be an asset of the Grantor Trust
for the benefit of the Class P Certificates. In no event
shall the Trust Administrator incur liability for withdrawals from
the Distribution Account at the direction of the Master
Servicer.
(e)
Each institution at which the Collection
Account is maintained shall invest the funds on deposit in the
Collection Account as directed in writing by the Master Servicer,
in Permitted Investments. Each institution at which the
Distribution Account is maintained shall invest the funds on
deposit in the Distribution Account as directed in writing by the
Trust Administrator, in Permitted Investments. Funds invested
in the Collection Account shall mature not later than the Business
Day next preceding the related Distribution Account Deposit Date
(except that if such Permitted Investment is an obligation of or is
managed by the institution that maintains such account, then such
Permitted Investment shall mature not later than such Distribution
Account Deposit Date). The Trust Administrator shall without
direction either (i) hold funds on deposit in the Distribution
Account uninvested in a trust or deposit account of the Trust
Administrator or (ii) invest funds on deposit in the Distribution
Account in Permitted Investments, which Permitted Investments shall
mature not later than the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an
obligation of or is managed by the institution that maintains such
fund or account, then such Permitted Investment shall mature not
later than such Distribution Date). Permitted Investments in
respect of the Collection Account or the Distribution Account shall
not be sold or disposed of prior to their maturity. All such
Permitted Investments shall be made in the name of the Trustee, for
the benefit of the Certificateholders. All income and gain
net of any losses realized from any such investment of funds on
deposit in the Collection Account shall be for the benefit of the
Master Servicer as master servicing compensation and shall be
remitted to it monthly as provided herein. The amount of any
realized losses in the Collection Account incurred in any such
account in respect of any such investments shall promptly be
deposited by the Master Servicer (from its own funds without any
right of reimbursement) in the Collection Account or paid to the
Trust Administrator by wire transfer of immediately available funds
for deposit into the Distribution Account. All income and
gain (net of any losses realized from any such investment of funds
on deposit in the Distribution Account) shall be for the benefit of
the Trust Administrator as compensation and shall be remitted to it
monthly as provided herein. The amount of any realized losses
in the Distribution Account incurred in any such account in respect
of any such investments shall promptly be deposited by the Trust
Administrator in the Distribution Account. The Trust
Administrator shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of
funds held in the Collection Account (except to the extent the
Trust Administrator is the obligor and has defaulted thereon) and
made in accordance with this Section 3.07. In the absence of
written instructions by the Trust Administrator, all funds on
deposit in the Distribution Account shall remain
uninvested.
(f)
The Master Servicer shall give notice to
the Trustee, the Trust Administrator, each Rating Agency and the
Depositor of any proposed change of the location of the Collection
Account prior to any change thereof. The Trust Administrator
shall give notice to the Trustee, the Master Servicer, each Rating
Agency and the Depositor of any proposed change of the location of
the Distribution Account prior to any change thereof.
(g)
On the Closing Date, the Trust
Administrator shall establish and maintain the Cap Reserve Fund,
held in the name of the Trustee on behalf of the Class A-2 and
Class Y Certificateholders, into which the Depositor shall deposit
$2,500 on the Closing Date. The Trust Administrator shall
deposit in the Cap Reserve Fund on the date received by it, any
amount received from the Cap Provider under the Cap Contract for
the related Distribution Date.
Amounts on deposit in the Cap Reserve
Fund shall not be invested. The Trust Administrator shall
account for the Cap Reserve Fund as an asset of the Supplemental
Interest Trust and not as an asset of any REMIC created pursuant to
this Agreement. The beneficial owner of the Cap Reserve Fund is the
Class Y Certificateholder.
Section 3.08
Collection of Taxes, Assessments and
Similar Items; Escrow Accounts .
To the extent required by the related
Servicing Agreement and by the related Mortgage Note and not
violative of current law, the Master Servicer shall require each
Servicer to establish and maintain one or more accounts (each, an
“Escrow Account”) and deposit and retain therein all
collections from the Mortgagors (or advances by such Servicer) for
the payment of taxes, assessments, hazard insurance premiums or
comparable items for the account of the Mortgagors. Nothing
herein shall require the Master Servicer to compel a Servicer to
establish an Escrow Account in violation of applicable
law.
Section 3.09
Access to Certain Documentation and
Information Regarding the Mortgage Loans .
The Master Servicer and the Custodian
shall afford and the Master Servicer shall require the Servicers to
afford the Depositor, the Trustee and Trust Administrator and their
respective agents or representatives reasonable access to all
records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this
Agreement or the Servicing Agreement, such access being afforded
without charge, but only upon reasonable request and during normal
business hours at the office designated by the Master Servicer, the
applicable Servicer or the Custodian, to the extent set forth in
the applicable Servicing Agreement.
Upon reasonable advance notice in
writing, the Master Servicer and the Custodian will provide or the
Master Servicer shall require the Servicers, to the extent set
forth in the applicable Servicing Agreement, to provide to each
Certificateholder which is a savings and loan association, bank or
insurance company certain reports and reasonable access to
information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities
with respect to investment in the Certificates; provided
that the Master Servicer, the applicable Servicer or the Custodian
shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Master Servicer, the applicable
Servicer or the Custodian in providing such reports and
access.
Section 3.10
Permitted Withdrawals from the
Collection Account and Distribution Account .
(a)
The Master Servicer may from time to time
make withdrawals from the Collection Account for the following
purposes:
(i)
to pay to the Servicers (to the extent
not previously retained by them), the servicing compensation to
which they are entitled pursuant to Section 3.19, and to pay to the
Master Servicer, earnings on or investment income with respect to
funds in or credited to the Collection Account;
(ii)
to reimburse each of the Servicers or the
Master Servicer for unreimbursed Advances made by it, such right of
reimbursement pursuant to this subclause (ii) being limited to
amounts received on the Mortgage Loan(s) in respect of which any
such Advance was made;
(iii)
to reimburse the Servicers or the Master
Servicer for any Nonrecoverable Advance previously made;
(iv)
to reimburse the Servicers or the Master
Servicer for Insured Expenses from the related Insurance
Proceeds;
(v)
to reimburse the Servicers or the Master
Servicer for (a) unreimbursed Servicing Advances, the
Servicers’ or the Master Servicer’s right to
reimbursement pursuant to this clause (a) with respect to any
Mortgage Loan being limited to amounts received on such Mortgage
Loan(s) which represent late recoveries of the payments for which
such advances were made pursuant to Section 3.01 or Section 3.06
and (b) for unpaid Servicing Fees as provided in Section 3.15
hereof;
(vi)
to pay to the purchaser, with respect to
each Mortgage Loan or property acquired in respect thereof that has
been purchased pursuant to Section 2.02 or 2.03, all amounts
received thereon after the date of such purchase;
(vii)
to reimburse the Transferor, the Master
Servicer or the Depositor for expenses or indemnities incurred by
any of them and reimbursable pursuant to Section 6.03
hereof;
(viii)
to withdraw any amount deposited in the
Collection Account and not required to be deposited
therein;
(ix)
on or prior to the Distribution Account
Deposit Date, to (a) withdraw (i) an amount equal to the related
Available Funds, for such Distribution Date, (ii) any PO Recoveries
received during the calendar month prior to that Distribution Date
and (iii) on or after the Cross-Over Date only, any Recoveries
received during the calendar month prior to that Distribution Date,
and remit by wire transfer of immediately available funds such
amounts to the Trust Administrator for deposit in the Distribution
Account and (b) withdraw any prepayment penalties (other than any
Class P Prepayment Charges) received from any Servicer and remit by
wire transfer of immediately available funds such amounts to the
Transferor pursuant to Section 3.24;
(x)
to reimburse the Master Servicer for any
costs or expenses incurred by it and reimbursable pursuant to
Section 3.02; and
(xi)
to clear and terminate the Collection
Account upon termination of this Agreement pursuant to Section
10.01 hereof.
The Master Servicer shall keep and
maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv), (v)
and (vi). Prior to making any withdrawal from the Collection
Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trust Administrator an Officer’s Certificate
of a Master Servicing Officer indicating the amount of any previous
Advance determined by the Master Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loans(s), and their
respective portions of such Nonrecoverable Advance.
(b)
The Trust Administrator shall withdraw
funds from the Distribution Account for distributions to
Certificateholders, in the manner specified in this Agreement (and
withhold from the amounts so withdrawn, the amount of any taxes
that it is authorized to withhold pursuant to the last paragraph of
Section 9.11). In addition, the Trust Administrator may from
time to time make withdrawals from the Distribution Account for the
following purposes:
(i)
to pay to the Trust Administrator the
earnings on or investment income, if any, on funds in or credited
to the Distribution Account;
(ii)
to withdraw and return to the Master
Servicer, with respect to any other amount, any amount deposited in
the Distribution Account and not required to be deposited therein
in accordance with Section 3.07(d);
(iii)
to withdraw any indemnity, expense or
other reimbursement owed to it, the Master Servicer or the Trustee
pursuant to this Agreement, including, without limitation, Section
3.05, Section 7.02, Section 8.05 and Section 9.05; and
(iv)
to clear and terminate the Distribution
Account upon termination of the Agreement pursuant to Section 10.01
hereof.
Section 3.11
Maintenance of Hazard Insurance;
Maintenance of Primary Insurance Policies .
(a)
For each Mortgage Loan, the Master
Servicer shall enforce any obligation of the Servicers under the
related Servicing Agreements to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related
Servicing Agreements. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility
requirements set forth in the applicable Servicing Agreement and
that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in
respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall
require such additional insurance.
(b)
Pursuant to Sections 3.07 and 3.08, any
amounts collected by 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
Collection Account, subject to withdrawal pursuant to Sections 3.07
and 3.08. Any cost incurred by the Master Servicer or any
Servicer in maintaining any such insurance if the Mortgagor
defaults in its obligation to do so shall be added to the amount
owing under the Mortgage Loan where the terms of the Mortgage Loan
so permit; provided , however , that the addition of
any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and
shall be recoverable by the Master Servicer or such Servicer
pursuant to Sections 3.07 and 3.08.
Section 3.12
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 Collection Account
upon receipt, except that any amounts realized that are to be
applied to the repair or restoration of the related Mortgaged
Property as a condition precedent to the presentation of claims on
the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 3.13
Maintenance of the Primary Insurance
Policies .
(a)
The Master Servicer shall not take, or
permit any Servicer (to the extent such action is prohibited under
the applicable Servicing Agreement) to take, any action that would
result in noncoverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of such Master Servicer or
Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each
Servicer (to the extent required under the related Servicing
Agreement) to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance),
primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable. The Master Servicer shall
not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to
renew any such Primary 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
Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary
Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Sections 3.07 and 3.08, any amounts collected by
the Master Servicer or any Servicer under any Primary Mortgage
Insurance Policies shall be deposited in the Collection Account,
subject to withdrawal pursuant to Sections 3.07 and
3.08.
Section 3.14
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 3.15
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, subject to the REMIC Provisions.
(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)
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 Collection Account.
In the event that the Trust Fund acquires
any Mortgaged Property as aforesaid or otherwise in connection with
a default or imminent default on a Mortgage Loan, the Master
Servicer shall enforce the obligation of the related Servicer to
dispose of such Mortgaged Property prior to the close of the third
calendar year after the year in which the Trust Fund acquires such
Mortgaged Property unless the Servicer shall have applied for and
received an extension of such period from the Internal Revenue
Service, in which case the Trust Fund may continue to hold such
Mortgaged Property for the period of such extension.
Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used for the
production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as “foreclosure property”
within the meaning of Section 860G(a)(8) of the Code or (ii)
subject any REMIC hereunder to the imposition of any federal, state
or local income taxes on the income earned from such Mortgaged
Property under Section 860G(c) of the Code or otherwise, unless the
Master Servicer or related Servicer, as applicable, has agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
In the event of a default on a Mortgage
Loan one or more of whose obligor is not a United States Person, as
that term is defined in Section 7701(a)(30) of the Code, in
connection with any foreclosure or acquisition of a deed in lieu of
foreclosure (together, “foreclosure”) in respect of
such Mortgage Loan, the Master Servicer will cause the applicable
Servicer to comply with the provisions of Treasury Regulation
Section 1.1445-2(d)(3) (or any successor thereto) necessary to
assure that no withholding tax obligation arises with respect to
the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the
obligors on such Mortgage Loan.
Section 3.16
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 3.17
Trustee to Cooperate; Release of
Mortgage Files .
Upon (i) the payment in full of any
Mortgage Loan, or the receipt by the Master Servicer of a
notification that payment in full will be escrowed in a manner
customary for such purposes or (ii) otherwise in connection with
the servicing of any Mortgage Loan, the Master Servicer shall, upon
receipt of notification from the related Servicer pursuant to the
applicable Servicing Agreement which notification shall state that
such payment in full has been deposited in the Collection Account
or has otherwise been escrowed in a manner customary for such
purposes, instruct the Custodian to, and the Custodian shall,
release the related Mortgage File to the related Servicer.
Upon notification, the Trustee shall at the Custodian’s
direction execute and deliver to the Custodian the request for
reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in
each case provided by the Custodian, together with the Mortgage
Note with written evidence of cancellation thereon. Expenses
incurred in connection with any instrument of satisfaction or deed
of reconveyance shall be chargeable to the related
Mortgagor.
If the Master Servicer or any related
Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement
or the Servicing Agreement, the Master Servicer or any related
Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for
trustee’s sale or other documents necessary to effectuate
such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to
obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise
available at law or in equity.
Subject to this Section 3.17, the Trustee
shall execute, at the written request of the Master Servicer, and
furnish to the Master Servicer and any Servicer such documents as
are necessary or appropriate to enable the Master Servicer or any
Servicer to carry out their servicing and administrative duties
hereunder. The Trustee shall not be liable for the actions of
the Master Servicer or any Servicers under such powers of
attorney.
Section 3.18
Documents, Records and Funds in
Possession of Master Servicer and Custodian to Be Held for the
Trustee .
Notwithstanding any other provisions of
this Agreement, the Master Servicer shall forward to the Custodian
with an instruction to, and the Custodian shall, place within the
Mortgage File and the Master Servicer shall cause each Servicer to
transmit to the Custodian as required by this Agreement and the
related Servicing Agreement all documents and instruments in
respect of a Mortgage Loan coming into the possession of the Master
Servicer or related Servicer from time to time and shall account
fully to the Trustee for any funds received by the Master Servicer
or related Servicer or which otherwise are collected by the Master
Servicer, or related Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files
and funds collected or held by, or under the control of, the Master
Servicer, the related Servicer or the Custodian in respect of any
Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account or any
Protected Account, shall be held by the Master Servicer, the
related Servicer or the Custodian for and on behalf of the Trustee
and shall be and remain the sole and exclusive property of the
Trust, subject to the applicable provisions of this Agreement and
the related Servicing Agreement. Each of the Master Servicer
and the Custodian also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the
Collection Account, Distribution Account or any Escrow Account, or
any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim,
lien, security interest, judgment, levy, writ of attachment or
other encumbrance, or assert by legal action or otherwise any claim
or right of setoff against any Mortgage File or any funds collected
on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct
from any such funds any amounts that are properly due and payable
to the Master Servicer under this Agreement.
Section 3.19
Master Servicing
Compensation .
As compensation for its activities
hereunder, the Master Servicer shall be entitled to retain or
withdraw from the Collection Account an amount equal to all
investment income gained on amounts held in the Collection Account
.
Section 3.20
Access to Certain
Documentation .
The Master Servicer and the Custodian
shall provide and the Master Servicer shall cause each Servicer to
provide in accordance with the related Servicing Agreement to the
OTS and the FDIC and to comparable regulatory authorities
supervising Holders of Subordinate Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon
reasonable and prior written request and during normal business
hours at the offices designated by the Master Servicer, the
Custodian and the related Servicer. Nothing in this Section
shall limit the obligation of the Master Servicer, the Custodian
and the related Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure
of the Master Servicer, the Custodian or the related Servicer to
provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Agreement.
In fulfilling such requests, the Master Servicer and the
Custodian shall not be responsible to determine the sufficiency of
such information.
Section 3.21
Annual Statement of
Compliance.
(a)
The Master Servicer and the Trust
Administrator shall deliver or otherwise make available to the
Depositor and the Trust Administrator on or before March 10 (with a
5 calendar day cure period but in no event later than March 15) of
each year, commencing in March 2007, an Officer’s Certificate
(an “
Annual Statement of Compliance ”) stating, as to the
signer thereof, that (A) a review of such party’s activities
during the preceding calendar year or portion thereof and of such
party’s performance under this Agreement, has been made under
such officer’s supervision and (B) to the best of such
officer’s knowledge, based on such review, such party has
fulfilled all its obligations under this Agreement, in all material
respects throughout such year or portion thereof, or, if there has
been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the
nature and status thereof. Promptly after receipt of each
such Officer’s Certificate, the Depositor shall review such
Officer’s Certificate and, if applicable, consult with each
such party, as applicable, as to the nature of any failures by such
party, in the fulfillment of any of such party’s obligations
hereunder.
(b)
The Master Servicer shall enforce any
obligation of the Servicers, to the extent set forth in the related
Servicing Agreement, to deliver to the Master Servicer an annual
statement of compliance (with respect to such Servicer and with
respect to any Subservicer engaged by such Servicer) within the
time frame set forth in, and in such form and substance as may be
required pursuant to, the related Servicing Agreement The Master
Servicer shall include such annual statements of compliance with
its own annual statement of compliance to be submitted to the Trust
Administrator pursuant to this Section.
Section 3.22
Report on Assessment of Compliance and
Attestation .
(a)
(i)
By March 10 (with a 5 calendar day cure
period but in no
event later than March 15) of each year, commencing in March 2007,
the Master Servicer, the Trust Administrator, and the Custodian,
each at its own expense, shall furnish or otherwise make available,
and each such party shall cause any Servicing Function Participant
engaged by it to furnish, each at its own expense, to the Trust
Administrator and the Depositor, a report on an assessment of
compliance with the Relevant Servicing Criteria substantially in
the form of Exhibit O (an “ Assessment of Compliance
”) that contains (A) a statement by such party of its
responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Servicing
Criteria to assess compliance with the Relevant Servicing Criteria,
(C) such party’s assessment of compliance with the Relevant
Servicing Criteria as of and for the fiscal year covered by the
Form 10-K required to be filed pursuant to Section 3.22, including,
if there has been any material instance of noncompliance with the
Relevant Servicing Criteria, a discussion of each such failure and
the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report
on such party’s assessment of compliance with the Relevant
Servicing Criteria as of and for such period.
(ii)
No later than the end of each fiscal year
for the Trust Fund for which a 10-K is required to be filed, the
Master Servicer and the Custodian shall each forward to the Trust
Administrator the name of each Servicing Function Participant
engaged by it and what Relevant Servicing Criteria will be
addressed in the Assessment of Compliance prepared by such
Servicing Function Participant. When the Master Servicer, the
Custodian and the Trust Administrator (or any Servicing Function
Participant engaged by them) submit their Assessments of Compliance
to the Trust Administrator, such parties will also at such time
include the Assessment of Compliance (and Accountant’s
Attestation pursuant to Section 3.22(b)(i)) of each Servicing
Function Participant engaged by it.
(iii)
Promptly after receipt of each Assessment
of Compliance, (A) the Depositor shall review each such report and,
if applicable, consult with the Master Servicer, the Trust
Administrator, the Custodian and any Servicing Function Participant
engaged by such parties as to the nature of any material instance
of noncompliance with the Relevant Servicing Criteria by each such
party, and (B) the Trust Administrator shall confirm that the
Assessments of Compliance, taken individually, address the Relevant
Servicing Criteria for each party as set forth on Exhibit V and on
any similar exhibit set forth in each Servicing Agreement in
respect of each Servicer and notify the Depositor of any
exceptions.
(iv)
The Master Servicer shall enforce any
obligation of the Servicers, to the extent set forth in the related
Servicing Agreement, to deliver to the Master Servicer an annual
Assessment of Compliance within the time frame set forth in, and in
such form and substance as may be required pursuant to, the related
Servicing Agreement. The Master Servicer shall include such
Assessment of Compliance with its own Assessment of Compliance to
be submitted to the Trust Administrator pursuant to this
Section.
(b)
(i)
By March 10 (with a 5 calendar day cure
period but in no event later than March 15) of each year,
commencing in March 2007, the Master Servicer, the Trust
Administrator, and the Custodian, each at its own expense, shall
cause, and each such party shall cause any Servicing Function
Participant engaged by it to cause, each at its own expense, a
registered public accounting firm (which may also render services
to the Master Servicer, the Custodian, the Trust Administrator, or
such other Servicing Function Participants, as the case may be) and
that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Trust Administrator and the
Depositor (an “ Accountant’s Attestation
”), to the effect that (A) it has obtained a representation
regarding certain matters from the management of such party, which
includes an assertion that such party has complied with the
Relevant Servicing Criteria, and (B) on the basis of an examination
conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the PCAOB, it is expressing an
opinion as to whether such party’s compliance with the
Relevant Servicing Criteria was fairly stated in all material
respects, or it cannot express an overall opinion regarding such
party’s assessment of compliance with the Relevant Servicing
Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in
such report why it was unable to express such an opinion.
Such report must be available for general use and not contain
restricted use language.
(ii)
Promptly after receipt of such report
from the Master Servicer, the Custodian, the Trust Administrator or
any Servicing Function Participant engaged by such parties, (A) the
Depositor shall review such report and, if applicable, consult with
each such party as to the nature of any defaults by such party, in
the fulfillment of any of such party’s obligations hereunder
or under any other applicable agreement, and (B) the Trust
Administrator shall confirm that each assessment submitted pursuant
to Section 3.22(a)(i) is coupled with an attestation that appears
on its face to meet the requirements of this Section and notify the
Depositor of any exceptions.
(iii)
The Master Servicer shall enforce any
obligation of the Servicers, to the extent set forth in the related
Servicing Agreement, to deliver to the Master Servicer an
attestation within the time frame set forth in, and in such form
and substance as may be required pursuant to, the related Servicing
Agreement. The Master Servicer shall include each such
attestation with its own attestation to be submitted to the Trust
Administrator pursuant to this Section.
(c)
(i)
The Master Servicer agrees to indemnify
and hold harmless each of the Depositor and each Person, if any,
who “controls” the Depositor or the Trust Administrator
within the meaning of the Securities Act and 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 that such Person may sustain arising out of third party
claims based on (i) the failure of the Master Servicer (or any
Servicing Function Participant engaged by it) to deliver or cause
to be delivered when required any Assessment of Compliance or
Accountant’s Attestation required pursuant to Section
3.22(a)(i) or 3.22(b)(i), as applicable, or (ii) any material
misstatement or omissio
