Exhibit 4.1
EXECUTION VERSION
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
XXXXXX LOAN SERVICING LP
Servicer
and
LASALLE BANK NATIONAL ASSOCIATION
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2006
----------
OWNIT MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-4
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.................................................... 11
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.. 61
SECTION 2.01. Conveyance of Mortgage Loans........................... 61
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans........ 64
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.............................................. 66
SECTION 2.04. Representations and Warranties of the Servicer......... 70
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that
are not "Qualified Mortgages."......................... 71
SECTION 2.06. Authentication and Delivery of Certificates............ 72
SECTION 2.07. REMIC Elections........................................ 72
SECTION 2.08. [RESERVED]............................................. 77
SECTION 2.09. Covenants of the Servicer.............................. 77
SECTION 2.10. [RESERVED]............................................. 77
SECTION 2.11. Permitted Activities of the Trust...................... 77
SECTION 2.12. Qualifying Special Purpose Entity...................... 77
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 77
SECTION 3.01. Servicer to Service Mortgage Loans..................... 77
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer................................ 80
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
the Servicer........................................... 80
SECTION 3.04. Trustee to Act as Servicer............................. 80
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account; Certificate Account........................... 81
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts........................................ 85
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans........................... 85
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.................................... 86
SECTION 3.09. [RESERVED]............................................. 88
SECTION 3.10. Maintenance of Hazard Insurance........................ 88
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements............................................. 89
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds....................... 90
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files........ 93
SECTION 3.14. Documents, Records and Funds in Possession of Servicer
to be Held for the Trustee............................. 95
SECTION 3.15. Servicing Compensation................................. 95
SECTION 3.16. Access to Certain Documentation........................ 95
SECTION 3.17. Annual Statement as to Compliance...................... 96
SECTION 3.18. Reports on Assessment of Compliance and Attestation.... 96
SECTION 3.19. Rights of the NIMs Insurer............................. 98
SECTION 3.20. [RESERVED]............................................. 98
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TABLE OF CONTENTS
PAGE
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SECTION 3.21. [RESERVED]............................................. 98
SECTION 3.22. [RESERVED]............................................. 98
SECTION 3.23. Prepayment Charge Reporting Requirements............... 98
SECTION 3.24. Statements to Trustee.................................. 98
SECTION 3.25. Indemnification........................................ 98
SECTION 3.26. Nonsolicitation........................................ 99
SECTION 3.27. Periodic Filings....................................... 99
ARTICLE IV DISTRIBUTIONS................................................. 105
SECTION 4.01. Advances............................................... 105
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls......................... 106
SECTION 4.03. Distributions on the REMIC Interests................... 106
SECTION 4.04. Distributions.......................................... 107
SECTION 4.05. Monthly Statements to Certificateholders............... 115
ARTICLE V THE CERTIFICATES............................................... 119
SECTION 5.01. The Certificates....................................... 119
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates............................... 120
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...... 123
SECTION 5.04. Persons Deemed Owners.................................. 124
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.............................................. 124
SECTION 5.06. Book-Entry Certificates................................ 124
SECTION 5.07. Notices to Depository.................................. 125
SECTION 5.08. Definitive Certificates................................ 125
SECTION 5.09. Maintenance of Office or Agency........................ 126
SECTION 5.10. Authenticating Agent................................... 126
ARTICLE VI THE DEPOSITOR AND THE SERVICER................................ 127
SECTION 6.01. Respective Liabilities of the Depositor and the
Servicer............................................... 127
SECTION 6.02. Merger or Consolidation of the Depositor or the
Servicer............................................... 127
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer
and Others............................................. 127
SECTION 6.04. Limitation on Resignation of Servicer.................. 128
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds......... 128
ARTICLE VII DEFAULT; TERMINATION OF SERVICER............................. 129
SECTION 7.01. Events of Default...................................... 129
SECTION 7.02. Trustee to Act; Appointment of Successor............... 130
SECTION 7.03. Notification to Certificateholders..................... 132
ARTICLE VIII CONCERNING THE TRUSTEE...................................... 132
SECTION 8.01. Duties of the Trustee.................................. 132
SECTION 8.02. Certain Matters Affecting the Trustee.................. 133
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.. 134
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TABLE OF CONTENTS
PAGE
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SECTION 8.04. Trustee May Own Certificates........................... 135
SECTION 8.05. Trustee's Fees and Expenses............................ 135
SECTION 8.06. Indemnification and Expenses of Trustee................ 135
SECTION 8.07. Eligibility Requirements for Trustee................... 136
SECTION 8.08. Resignation and Removal of Trustee..................... 136
SECTION 8.09. Successor Trustee...................................... 137
SECTION 8.10. Merger or Consolidation of Trustee..................... 137
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.......... 138
SECTION 8.12. Tax Matters............................................ 139
ARTICLE IX TERMINATION................................................... 141
SECTION 9.01. Termination upon Liquidation or Auction of all Mortgage
Loans.................................................. 141
SECTION 9.02. Final Distribution on the Certificates................. 142
SECTION 9.03. Additional Termination Requirements.................... 143
ARTICLE X MISCELLANEOUS PROVISIONS....................................... 144
SECTION 10.01. Amendment.............................................. 144
SECTION 10.02. Counterparts........................................... 146
SECTION 10.03. Governing Law.......................................... 146
SECTION 10.04. Intention of Parties................................... 146
SECTION 10.05. Notices................................................ 146
SECTION 10.06. Severability of Provisions............................. 147
SECTION 10.07. Assignment............................................. 147
SECTION 10.08. Limitation on Rights of Certificateholders............. 147
SECTION 10.09. Inspection and Audit Rights............................ 148
SECTION 10.10. Certificates Nonassessable and Fully Paid.............. 148
SECTION 10.11. Third Party Rights..................................... 149
SECTION 10.12. Additional Rights of the NIMs Insurer.................. 149
SECTION 10.13. Assignment; Sales; Advance Facilities.................. 149
SECTION 10.14. Compliance with Regulation AB.......................... 151
iv
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PAGE
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EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF CLASS R TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF CLASS R TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G [FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)]
EXHIBIT H [RESERVED]
EXHIBIT I [FORM OF REQUEST FOR RELEASE]
EXHIBIT J [RESERVED]
EXHIBIT K [RESERVED]
EXHIBIT L [RESERVED]
EXHIBIT M-1 [RESERVED]
EXHIBIT M-2 [RESERVED]
EXHIBIT M-3 [RESERVED]
EXHIBIT N-1 FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2 FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3 FORM OF SUBORDINATE CERTIFICATES CAP CONTRACT
EXHIBIT O-1 ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP CONTRACT
EXHIBIT O-2 ONE-MONTH LIBOR CAP TABLE - CLASS A-2 CAP CONTRACT
EXHIBIT O-3 ONE-MONTH LIBOR CAP TABLE - SUBORDINATE CERTIFICATES CAP
CONTRACT
EXHIBIT P FORM OF POWER OF ATTORNEY
EXHIBIT Q [RESERVED]
EXHIBIT R [RESERVED]
EXHIBIT S FORM OF SWAP AGREEMENT
EXHIBIT T-1 FORM OF ASSESSMENT OF COMPLIANCE
EXHIBIT T-2 SERVICING CRITERIA (EXHIBIT A TO FORM OF ASSESSMENT OF
COMPLIANCE)
EXHIBIT T-3 FORM OF XXXXXXXX-XXXXX CERTIFICATION (SERVICER)
EXHIBIT T-4 FORM OF ITEM 1123 CERTIFICATION (SERVICER)
EXHIBIT T-5 FORM OF OFFICER'S CERTIFICATE (TRUSTEE)
EXHIBIT U [RESERVED]
EXHIBIT V [RESERVED]
EXHIBIT W [RESERVED]
EXHIBIT X ITEMS FOR FORM 8-K
EXHIBIT Y ITEMS FOR FORM 10-D
EXHIBIT Z ITEMS FOR FORM 10-K
EXHIBIT Z-1 ADDITIONAL DISCLOSURE INFORMATION
v
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of June 1,
2006, among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), XXXXXX LOAN SERVICING LP, a Delaware limited
partnership, as servicer (the "Servicer") and LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. The Trust Fund for federal income tax
purposes will consist of (i) three real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and the Cap
Contract Account, (iv) the grantor trusts described in Section 2.07 hereof and
(v) the Supplemental Interest Trust, which in turn will hold the Swap Agreement.
The SWAP REMIC will consist of all of the assets constituting the Trust Fund
(other than the assets described in clauses (ii), (iii), (iv) and (v) above,
other than the SWAP REMIC Regular Interests and other than the Lower Tier REMIC
Regular Interests) and will be evidenced by the SWAP REMIC Regular Interests
(which will be uncertificated and will represent the "regular interests" in the
SWAP REMIC) and the Class SWR Interest as the single "residual interest" in the
SWAP REMIC. The Lower Tier REMIC will consist of SWAP REMIC Regular Interests
and will be evidenced by the Lower Tier REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular Interests (which will represent the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in the Upper Tier REMIC. The Class R Certificate will
represent beneficial ownership of the Class SWR Interest, the Class LTR Interest
and the Residual Interest. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest Possible
Maturity Date.
All covenants and agreements made by the Transferor in the Transfer
Agreement, by the Sponsor in the Sale Agreement and by the Depositor and the
Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates and, to the extent provided herein, the NIMs Insurer.
THE SWAP REMIC
The following table sets forth the designations, initial principal balances and
interest rates for each interest in the SWAP REMIC:
Class Initial Principal Balance Interest Rate
----- ------------------------- -------------
1-SW1 $40,977,022.239 (1)
1-SW1A $ 4,437,203.972 (2)
1-SW1B $ 4,437,203.972 (3)
1-SW2A $ 4,965,485.276 (2)
1-SW2B $ 4,965,485.276 (3)
1-SW3A $ 5,494,328.820 (2)
1-SW3B $ 5,494,328.820 (3)
1-SW4A $ 6,039,264.249 (2)
1-SW4B $ 6,039,264.249 (3)
1-SW5A $ 6,402,656.125 (2)
1-SW5B $ 6,402,656.125 (3)
1-SW6A $ 6,382,697.000 (2)
1-SW6B $ 6,382,697.000 (3)
1-SW7A $ 5,998,317.680 (2)
1-SW7B $ 5,998,317.680 (3)
1-SW8A $ 5,618,673.195 (2)
1-SW8B $ 5,618,673.195 (3)
1-SW9A $ 5,271,170.410 (2)
1-SW9B $ 5,271,170.410 (3)
1-SW10A $ 4,956,277.339 (2)
1-SW10B $ 4,956,277.339 (3)
1-SW11A $ 4,641,762.326 (2)
1-SW11B $ 4,641,762.326 (3)
1-SW12A $ 4,355,026.032 (2)
1-SW12B $ 4,355,026.032 (3)
1-SW13A $ 4,088,960.775 (2)
1-SW13B $ 4,088,960.775 (3)
1-SW14A $ 3,915,456.089 (2)
1-SW14B $ 3,915,456.089 (3)
1-SW15A $ 3,934,086.002 (2)
1-SW15B $ 3,934,086.002 (3)
1-SW16A $ 4,141,318.679 (2)
1-SW16B $ 4,141,318.679 (3)
1-SW17A $ 4,280,901.692 (2)
1-SW17B $ 4,280,901.692 (3)
1-SW18A $ 3,958,672.749 (2)
1-SW18B $ 3,958,672.749 (3)
1-SW19A $ 3,413,472.486 (2)
1-SW19B $ 3,413,472.486 (3)
1-SW20A $ 2,973,886.451 (2)
1-SW20B $ 2,973,886.451 (3)
1-SW21A $ 2,636,580.951 (2)
1-SW21B $ 2,636,580.951 (3)
1-SW22A $ 2,374,537.647 (2)
1-SW22B $ 2,374,537.647 (3)
1-SW23A $ 2,161,708.358 (2)
1-SW23B $ 2,161,708.358 (3)
1-SW24A $ 2,000,006.830 (2)
1-SW24B $ 2,000,006.830 (3)
1-SW25A $ 1,872,811.124 (2)
1-SW25B $ 1,872,811.124 (3)
1-SW26A $ 1,928,637.078 (2)
1-SW26B $ 1,928,637.078 (3)
1-SW27A $ 1,417,042.470 (2)
1-SW27B $ 1,417,042.470 (3)
1-SW28A $ 557,125.757 (2)
1-SW28B $ 557,125.757 (3)
1-SW29A $ 2,446,333.927 (2)
1-SW29B $ 2,446,333.927 (3)
2
1-SW30A $ 2,136,412.219 (2)
1-SW30B $ 2,136,412.219 (3)
1-SW31A $ 1,730,851.193 (2)
1-SW31B $ 1,730,851.193 (3)
1-SW32A $ 1,428,965.444 (2)
1-SW32B $ 1,428,965.444 (3)
1-SW33A $ 1,238,008.446 (2)
1-SW33B $ 1,238,008.446 (3)
1-SW34A $ 1,098,034.967 (2)
1-SW34B $ 1,098,034.967 (3)
1-SW35A $ 979,823.465 (2)
1-SW35B $ 979,823.465 (3)
1-SW36A $ 877,636.961 (2)
1-SW36B $ 877,636.961 (3)
1-SW37A $ 788,834.866 (2)
1-SW37B $ 788,834.866 (3)
1-SW38A $ 713,795.626 (2)
1-SW38B $ 713,795.626 (3)
1-SW39A $ 650,460.862 (2)
1-SW39B $ 650,460.862 (3)
1-SW40A $ 596,468.391 (2)
1-SW40B $ 596,468.391 (3)
1-SW41A $ 550,106.484 (2)
1-SW41B $ 550,106.484 (3)
1-SW42A $ 509,386.944 (2)
1-SW42B $ 509,386.944 (3)
1-SW43A $ 473,273.312 (2)
1-SW43B $ 473,273.312 (3)
1-SW44A $ 440,987.757 (2)
1-SW44B $ 440,987.757 (3)
1-SW45A $ 411,632.247 (2)
1-SW45B $ 411,632.247 (3)
1-SW46A $ 385,051.875 (2)
1-SW46B $ 385,051.875 (3)
1-SW47A $ 361,199.142 (2)
1-SW47B $ 361,199.142 (3)
1-SW48A $ 339,649.459 (2)
1-SW48B $ 339,649.459 (3)
1-SW49A $ 320,163.584 (2)
1-SW49B $ 320,163.584 (3)
1-SW50A $ 7,147,754.162 (2)
1-SW50B $ 7,147,754.162 (3)
2-SW2 $64,701,517.171 (4)
2-SW1A $ 7,006,215.028 (5)
2-SW1B $ 7,006,215.028 (6)
2-SW2A $ 7,840,355.724 (5)
2-SW2B $ 7,840,355.724 (6)
2-SW3A $ 8,675,384.180 (5)
3
2-SW3B $ 8,675,384.180 (6)
2-SW4A $ 9,535,821.251 (5)
2-SW4B $ 9,535,821.251 (6)
2-SW5A $10,109,606.375 (5)
2-SW5B $10,109,606.375 (6)
2-SW6A $10,078,091.500 (5)
2-SW6B $10,078,091.500 (6)
2-SW7A $ 9,471,167.820 (5)
2-SW7B $ 9,471,167.820 (6)
2-SW8A $ 8,871,720.305 (5)
2-SW8B $ 8,871,720.305 (6)
2-SW9A $ 8,323,023.590 (5)
2-SW9B $ 8,323,023.590 (6)
2-SW10A $ 7,825,816.661 (5)
2-SW10B $ 7,825,816.661 (6)
2-SW11A $ 7,329,206.674 (5)
2-SW11B $ 7,329,206.674 (6)
2-SW12A $ 6,876,458.468 (5)
2-SW12B $ 6,876,458.468 (6)
2-SW13A $ 6,456,349.225 (5)
2-SW13B $ 6,456,349.225 (6)
2-SW14A $ 6,182,390.411 (5)
2-SW14B $ 6,182,390.411 (6)
2-SW15A $ 6,211,806.498 (5)
2-SW15B $ 6,211,806.498 (6)
2-SW16A $ 6,539,020.821 (5)
2-SW16B $ 6,539,020.821 (6)
2-SW17A $ 6,759,418.308 (5)
2-SW17B $ 6,759,418.308 (6)
2-SW18A $ 6,250,628.251 (5)
2-SW18B $ 6,250,628.251 (6)
2-SW19A $ 5,389,773.014 (5)
2-SW19B $ 5,389,773.014 (6)
2-SW20A $ 4,695,679.549 (5)
2-SW20B $ 4,695,679.549 (6)
2-SW21A $ 4,163,084.049 (5)
2-SW21B $ 4,163,084.049 (6)
2-SW22A $ 3,749,325.353 (5)
2-SW22B $ 3,749,325.353 (6)
2-SW23A $ 3,413,274.142 (5)
2-SW23B $ 3,413,274.142 (6)
2-SW24A $ 3,157,952.170 (5)
2-SW24B $ 3,157,952.170 (6)
2-SW25A $ 2,957,113.876 (5)
2-SW25B $ 2,957,113.876 (6)
2-SW26A $ 3,045,261.422 (5)
2-SW26B $ 3,045,261.422 (6)
2-SW27A $ 2,237,468.530 (5)
4
2-SW27B $ 2,237,468.530 (6)
2-SW28A $ 879,685.243 (5)
2-SW28B $ 879,685.243 (6)
2-SW29A $ 3,862,689.573 (5)
2-SW29B $ 3,862,689.573 (6)
2-SW30A $ 3,373,332.281 (5)
2-SW30B $ 3,373,332.281 (6)
2-SW31A $ 2,732,963.307 (5)
2-SW31B $ 2,732,963.307 (6)
2-SW32A $ 2,256,294.556 (5)
2-SW32B $ 2,256,294.556 (6)
2-SW33A $ 1,954,779.054 (5)
2-SW33B $ 1,954,779.054 (6)
2-SW34A $ 1,733,765.033 (5)
2-SW34B $ 1,733,765.033 (6)
2-SW35A $ 1,547,112.535 (5)
2-SW35B $ 1,547,112.535 (6)
2-SW36A $ 1,385,763.039 (5)
2-SW36B $ 1,385,763.039 (6)
2-SW37A $ 1,245,547.134 (5)
2-SW37B $ 1,245,547.134 (6)
2-SW38A $ 1,127,062.374 (5)
2-SW38B $ 1,127,062.374 (6)
2-SW39A $ 1,027,058.638 (5)
2-SW39B $ 1,027,058.638 (6)
2-SW40A $ 941,806.109 (5)
2-SW40B $ 941,806.109 (6)
2-SW41A $ 868,602.016 (5)
2-SW41B $ 868,602.016 (6)
2-SW42A $ 804,307.056 (5)
2-SW42B $ 804,307.056 (6)
2-SW43A $ 747,284.688 (5)
2-SW43B $ 747,284.688 (6)
2-SW44A $ 696,306.743 (5)
2-SW44B $ 696,306.743 (6)
2-SW45A $ 649,955.253 (5)
2-SW45B $ 649,955.253 (6)
2-SW46A $ 607,985.625 (5)
2-SW46B $ 607,985.625 (6)
2-SW47A $ 570,322.858 (5)
2-SW47B $ 570,322.858 (6)
2-SW48A $ 536,296.541 (5)
2-SW48B $ 536,296.541 (6)
2-SW49A $ 505,528.916 (5)
2-SW49B $ 505,528.916 (6)
2-SW50A $11,286,094.338 (5)
2-SW50B $11,286,094.338 (6)
SWR (7) (7)
5
(1) The interest rate on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group One Net WAC.
(2) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation
"A" shall be a per annum rate equal to 2 times the Group One Net WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for such
Distribution Date.
(3) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation
"B" shall be a per annum rate equal to the greater of (x) the excess, if
any, of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC Swap
Rate for such Distribution Date and (y) 0.00%.
(4) The interest rate on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group Two Net WAC.
(5) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation
"A" shall be a per annum rate equal to 2 times the Group Two Net WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for such
Distribution Date.
(6) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation
"B" shall be a per annum rate equal to the greater of (x) the excess, if
any, of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC Swap
Rate for such Distribution Date and (y) 0.00%.
(7) The Class SWR Interest shall have no principal amount and shall bear no
interest.
THE LOWER TIER REMIC
The following table sets forth the designations, initial principal balances,
interest rates, Corresponding Classes of Certificates and related Mortgage Group
for each interest in the Lower Tier REMIC:
Class(es) of
Corresponding
Initial Certificates
Principal or Related
Class Balance Interest Rate Mortgage Group
------ --------- ------------- --------------
LTA-1 (1) (8) A-1, R
LTA-2A (1) (8) A-2A
LTA-2B (1) (8) A-2B
LTA-2C (1) (8) A-2C
LTA-2D (1) (8) A-2D
LTM-1 (1) (8) M-1
LTM-2 (1) (8) M-2
LTM-3 (1) (8) M-3
LTM-4 (1) (8) M-4
LTM-5 (1) (8) M-5
LTM-6 (1) (8) M-6
LTB-1 (1) (8) B-1
LTB-2 (1) (8) B-2
LTB-3 (1) (8) B-3
LTIX (2) (8) N/A
6
LTII1A (3) (8) Group One
LTII1B (4) (9) Group One
LTII2A (5) (8) Group Two
LTII2B (6) (10) Group Two
LTIIX (7) (8) N/A
LT-IO (11) (11) N/A
LTR (12) (12) N/A
(1) The initial principal balance of each of these Lower Tier REMIC Regular
Interests shall equal 1/4 of the initial Certificate Principal Balance of
its Corresponding Certificates.
(2) The initial principal balance of the Class LTIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance of the
Mortgage Loans over (ii) the initial principal balance of the Lower Tier
REMIC I Marker Interests.
(3) The initial principal balance of the Class LTII1A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal Balance of
the Group One Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group One.
(4) The initial principal balance of the Class LTII1B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group One
Mortgage Loans.
(5) The initial principal balance of the Class LTII2A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal Balance of
the Group Two Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group Two.
(6) The initial principal balance of the Class LTII2B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group Two
Mortgage Loans.
(7) The initial principal balance of the Class LTIIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance of the
Mortgage Loans over (ii) the initial principal balance of the Lower Tier
REMIC II Marker Interests.
(8) For each Distribution Date, the interest rate for each of the Lower Tier
REMIC Regular Interests (other than the Class LTII1B, the Class LTII2B and
the Class LT-IO Interests) shall be a per annum rate (but not less than
zero) equal to the product of (i) the weighted average of the interest
rates on the SWAP REMIC Regular Interests for such Distribution Date and
(ii) a fraction the numerator of which is 30 and the denominator of which
is the actual number of days in the Accrual Period for the LIBOR
Certificates, provided however, that for any Distribution Date on which the
Class LT-IO Interest is entitled to a portion of interest accruals on a
SWAP REMIC Regular Interest ending with a designation "A" as described in
footnote 11 below, such weighted average shall be computed by first
subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
Swap LIBOR for such Distribution Date.
(9) For each Distribution Date, the interest rate for the Class LTII1B Interest
shall be a per annum rate equal to the product of (i) the weighted average
of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "1" for such Distribution Date and (ii) a fraction the
numerator of which is 30 and the denominator of which is the actual number
of days in the Accrual Period for the LIBOR Certificates, provided,
however, that for any Distribution Date on which the Class LT-IO Interest
is entitled to a portion of interest accruals on a SWAP REMIC Regular
Interest ending with a designation "A" as described in footnote 11 below,
such weighted average shall be computed by first subjecting the rate on
such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such
Distribution Date.
(10) For each Distribution Date, the interest rate for the Class LTII2B Interest
shall be a per annum rate equal to the product of (i) the weighted average
of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "2" for such Distribution Date and (ii) a fraction the
numerator of which is 30 and the denominator
7
of which is the actual number of days in the Accrual Period for the LIBOR
Certificates, provided, however, that for any Distribution Date on which
the Class LT-IO Interest is entitled to a portion of interest accruals on a
SWAP REMIC Regular Interest ending with a designation "A" as described in
footnote 11 below, such weighted average shall be computed by first
subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
Swap LIBOR for such Distribution Date.
(11) The Class LT-IO Interest is an interest-only class that does not have a
principal balance. For only those Distribution Dates listed in the first
column of the table below, the Class LT1-IO shall be entitled to interest
accrued on the SWAP REMIC Regular Interest listed in the second column
below at a per annum rate equal to the excess, if any, of (i) the interest
rate for such SWAP REMIC Regular Interest for such Distribution Date over
(ii) Swap LIBOR for such Distribution Date.
Distribution Date SWAP REMIC Regular Interest
----------------- ---------------------------
7 Class 1-SW1A
Class 2-SW1A
7-8 Class 1-SW2A
Class 2-SW2A
7-9 Class 1-SW3A
Class 2-SW3A
7-10 Class 1-SW4A
Class 2-SW4A
7-11 Class 1-SW5A
Class 2-SW5A
7-12 Class 1-SW6A
Class 2-SW6A
7-13 Class 1-SW7A
Class 2-SW7A
7-14 Class 1-SW8A
Class 2-SW8A
7-15 Class 1-SW9A
Class 2-SW9A
7-16 Class 1-SW10A
Class 2-SW10A
7-17 Class 1-SW11A
Class 2-SW11A
7-18 Class 1-SW12A
Class 2-SW12A
7-19 Class 1-SW13A
Class 2-SW13A
7-20 Class 1-SW14A
Class 2-SW14A
7-21 Class 1-SW15A
Class 2-SW15A
7-22 Class 1-SW16A
Class 2-SW16A
7-23 Class 1-SW17A
Class 2-SW17A
7-24 Class 1-SW18A
Class 2-SW18A
7-25 Class 1-SW19A
Class 2-SW19A
7-26 Class 1-SW20A
Class 2-SW20A
7-27 Class 1-SW21A
8
Class 2-SW21A
7-28 Class 1-SW22A
Class 2-SW22A
7-29 Class 1-SW23A
Class 2-SW23A
7-30 Class 1-SW24A
Class 2-SW24A
7-31 Class 1-SW25A
Class 2-SW25A
7-32 Class 1-SW26A
Class 2-SW26A
7-33 Class 1-SW27A
Class 2-SW27A
7-35 Class 1-SW28A
Class 2-SW28A
7-36 Class 1-SW29A
Class 2-SW29A
7-37 Class 1-SW30A
Class 2-SW30A
7-38 Class 1-SW31A
Class 2-SW31A
7-39 Class 1-SW32A
Class 2-SW32A
7-40 Class 1-SW33A
Class 2-SW33A
7-41 Class 1-SW34A
Class 2-SW34A
7-42 Class 1-SW35A
Class 2-SW35A
7-43 Class 1-SW36A
Class 2-SW36A
7-44 Class 1-SW37A
Class 2-SW37A
7-45 Class 1-SW38A
Class 2-SW38A
7-46 Class 1-SW39A
Class 2-SW39A
7-47 Class 1-SW40A
Class 2-SW40A
7-48 Class 1-SW41A
Class 2-SW41A
7-49 Class 1-SW42A
Class 2-SW42A
7-50 Class 1-SW43A
Class 2-SW43A
7-51 Class 1-SW44A
Class 2-SW44A
7-52 Class 1-SW45A
Class 2-SW45A
7-53 Class 1-SW46A
Class 2-SW46A
7-54 Class 1-SW47A
Class 2-SW47A
7-55 Class 1-SW48A
Class 2-SW48A
7-56 Class 1-SW49A
9
Class 2-SW49A
7-57 Class 1-SW50A
Class 2-SW50A
(12) The Class LTR Interest shall have no principal amount and shall bear no
interest.
UPPER TIER REMIC
The following table sets forth the designation, the initial principal balances,
the interest rates and Classes of Related Certificates for each of the interests
in the Upper Tier REMIC.
Initial Class of
Principal Related
Class Balance Rate Certificates
----- --------- ---- ------------
UTA-1 (1) (2) A-1
UTA-2A (1) (2) A-2A
UTA-2B (1) (2) A-2B
UTA-2C (1) (2) A-2C
UTA-2D (1) (2) A-2D
UTM-1 (1) (2) M-1
UTM-2 (1) (2) M-2
UTM-3 (1) (2) M-3
UTM-4 (1) (2) M-4
UTM-5 (1) (2) M-5
UTM-6 (1) (2) M-6
UTB-1 (1) (2) B-1
UTB-2 (1) (2) B-2
UTB-3 (1) (2) B-3
Uncertificated Class C Interest (3) (3) N/A
UT-IO (4) (4) N/A
Residual Interest (1) (2) R
(1) The initial principal balance of each of these REMIC Regular Interests
shall equal the initial principal balance of its Class of Related
Certificates.
(2) The interest rates on each of these REMIC Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the Class of Related
Certificates, provided that in lieu of the applicable Available Funds Caps
set forth in the definition of an applicable Pass-Through Rate, the
applicable Upper Tier REMIC Net WAC Cap shall be used.
(3) The Uncertificated Class C Interest shall have an initial principal balance
equal to the initial Overcollateralization Amount. The Uncertificated Class
C Interest shall accrue interest on a notional balance set forth in the
definition of Class C Current Interest at a rate equal to the Class C
Distributable Interest Rate. The Uncertificated Class C Interest shall be
represented by the Class C Certificates.
(4) The Class UT-IO Interest shall have no principal amount and will not have
an interest rate, but will be entitled to 100% of the interest accrued with
respect to the Class LT-IO Interest. The Class UT-IO Interest shall be
represented by the Class C Certificates.
THE CERTIFICATES
10
The following table sets forth the Class designation, interest rate and initial
Class principal amount for each Class of Certificates comprising interests in
the Trust Fund.
Initial
Class
Principal Interest
Class Amount Rate
----- --------- --------
A-1 (1) (2)
A-2A (1) (2)
A-2B (1) (2)
A-2C (1) (2)
A-2D (1) (2)
M-1 (1) (2)
M-2 (1) (2)
M-3 (1) (2)
M-4 (1) (2)
M-5 (1) (2)
M-6 (1) (2)
B-1 (1) (2)
B-2 (1) (2)
B-3 (1) (2)
C (3) (3)
P (4) (4)
R (1) (2)(5)
(1) Each of these Classes of Certificates shall have initial principal balances
as set forth in Section 5.01 hereof.
(2) Each of these Classes of Certificates shall bear interest at a per annum
rate equal to the Pass-Through Rate for such Certificates set forth in the
definitions herein.
(3) For federal income tax purposes, the Class C Certificate shall represent
(i) the right to receive all distributions with respect to the REMIC
Regular Interests represented by the Uncertificated Class C Interest and
the Class UT-IO Interest and (ii) certain rights and obligations with
respect to notional principal contracts as described in Section 2.07.
(4) The Class P Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC regular
interest.
(5) The Class R Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.
In consideration of the mutual agreements herein contained, the Depositor,
the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions that service for their own
11
account mortgage loans of the same type as the Mortgages Loans in the
jurisdictions in which the related Mortgaged Properties (or Underlying Mortgaged
Properties in the case of Co-op Loans) are located.
Accountant's Attestation: As defined in Section 3.18.
Accrual Period: With respect to each Class of Certificates and their
Corresponding REMIC Regular Interests and the Lower Tier REMIC Interests and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. With
respect to the SWAP REMIC Regular Interests and any Distribution Date, the
calendar month immediately preceding the month in which such Distribution Date
occurs. All calculations of interest on each Class of Certificates and their
Corresponding REMIC Regular Interests and the Lower Tier REMIC Interests will be
made on the basis of the actual number of days elapsed in the related Accrual
Period and a 360 day year. All calculations of interest on the SWAP REMIC
Regular Interests will be made on the basis of a 360-day year consisting of
twelve 30-day months.
Additional Disclosure Notification: the form of notification to be included
with any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or
Form 8-K Disclosure Information, which is attached hereto as Exhibit Z-1.
Additional Form 10-D Disclosure: Has the meaning set forth in Section 3.27.
Additional Form 10-K Disclosure: Has the meaning set forth in Section 3.27.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate amount of all payments
of principal and interest (net of the Servicing Fee) on the Mortgage Loans that
were due during the applicable Due Period and not received as of the close of
business on the related Determination Date (other than the principal portion of
any Balloon Amount), less the aggregate amount of any such Delinquent payments
that the Servicer has determined would constitute a Non-Recoverable Advance were
an advance to be made with respect thereto; provided, however, that with respect
to any Mortgage Loan that has been converted to an REO Property, the obligation
to make advances shall be limited to payments of interest.
Advance Facility: A financing or other facility as described in Section
10.13.
Advance Facility Notice: As defined in Section 10.13(b).
Advance Financing Person: As defined in Section 10.13(a).
Advance Reimbursement Amount: As defined in Section 10.13(b).
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
12
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A Certificate
Principal Balance, the Class A-2B Certificate Principal Balance, the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance and the Class B-3 Certificate Principal Balance, in each case as of such
date of determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which were
used to purchase the related Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan)
is the lesser of (1) the appraised value based on an appraisal made for the
Sponsor by an independent fee appraiser at the time of the origination of the
related Mortgage Loan, and (2) the sales price of such Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) based upon the appraisal obtained at the time of
refinancing.
Assessment of Compliance: As defined in Section 3.18.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is endorsed in
blank), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap or the Weighted Average Available Funds Cap.
Back-Up Certification: Has the meaning set forth in Section 3.27(k).
13
Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 30 years, which provides for level monthly payments of principal
and interest based on a 40-year or 45-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant," or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A (other than the Class R Certificate), Class M and Class B
Certificates constitutes a Class of Book-Entry Certificates.
Bring Down Letter: Those certain letter agreements, dated as of June 26,
2006 between Ownit and the Sponsor, with respect to the Mortgage Loans.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Illinois,
State of Texas and in the City of New York, New York are authorized or obligated
by law or executive order to be closed.
Cap Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap Contract
or the Subordinate Certificates Cap Contract.
Cap Contract Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(k)(i) in the name of the Trustee for the
benefit of the Trust Fund and designated "LaSalle Bank National Association, as
trustee, in trust for registered holders of Ownit Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-4." Funds in the Cap Contract
Account shall be held in trust for the Trust Fund for the uses and purposes set
forth in this Agreement.
Cap Contract Counterparty: The Bank of New York.
Cap Contract Notional Balance: Any of the Class A-1 Cap Contract Notional
Balance, the Class A-2 Cap Contract Notional Balance or the Subordinate
Certificates Cap Contract Notional Balance.
Cap Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or the Subordinate
Certificates Cap Contract Termination Date.
Certificate: Any one of the certificates of any Class executed by the
Trustee and authenticated by the Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(e) in the name of the Trustee for the
benefit of the Certificateholders and designated "LaSalle Bank National
Association, as trustee, in trust for registered holders of Ownit Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-4." Funds in the
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For purposes
of Section 2.07 hereof, Certificate Group One shall be related to Group One.
14
Certificate Group Two: The Class A-2A, Class A-2B Certificates, Class A-2C
Certificates and Class A-2D Certificates. For purposes of Section 2.07 hereof,
Certificate Group Two shall be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount) will be added to the aggregate Certificate
Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer or on any
Distribution Date on which amounts are to be distributed in respect of principal
from the Supplemental Interest Trust pursuant to Section 4.04(l)(v), the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders and amounts to be
distributed in respect of principal from the Supplemental Interest Trust
pursuant to Section 4.04(l)(v) on such Distribution Date (reduced by the amount
of the increase in the Certificate Principal Balance of any more senior Class of
Certificates pursuant to this sentence on such Distribution 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 (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor 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 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 Trustee is entitled to rely conclusively on a certification of
the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.
Certification Parties: Has the meaning set forth in Section 3.27(k).
Certifying Person: Has the meaning set forth in Section 3.27(k).
Class: All Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.
Class A Certificate Principal Balance: As of any date of determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A Certificate
Principal Balance, the Class X-0X Xxxxxxxxxxx
00
Xxxxxxxxx Xxxxxxx, the Class A-2C Certificate Principal Balance, the Class A-2D
Certificate Principal Balance and the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the related Stepdown Date or any Distribution Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution Amount for
such Distribution Date and (2) on or after the Stepdown Date where a Stepdown
Trigger Event does not exist, the excess of (A) the Class A Certificate
Principal Balance immediately prior to such Distribution Date over (B) the
lesser of (i) 55.80% of the aggregate Stated Principal Balance of the Mortgage
Loans as of such Distribution Date and (ii) the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount; provided, however, that in no
event will the Class A Principal Distribution Amount with respect to any
Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest on the Mortgage Loans in Group One based on the Net Mortgage
Rates in effect on the related Due Date, less the pro rata portion (calculated
based on the ratio of the Group One Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group One Mortgage Loans of any Net Swap Payments and
Swap Termination Payments (other than Defaulted Swap Termination Payments) owed
to the Swap Counterparty for such Distribution Date in effect on the related Due
Date divided by (y) the aggregate Stated Principal Balance of the Mortgage Loans
in Group One as of the first day of the related Accrual Period (or, in the case
of the first Distribution Date, as of the Cut-off Date) and (iii) a fraction,
the numerator of which is 30, and the denominator of which is the actual number
of days in the related Accrual Period.
Class A-1 Cap Contract: The confirmation and agreement between the Trustee
on behalf of the Issuing Entity and the Cap Contract Counterparty (in the form
of Exhibit N-1 hereto).
Class A-1 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table attached hereto as
Exhibit O-1.
Class A-1 Cap Contract Termination Date: The Distribution Date in December
2006.
Class A-1 Certificates: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1 Certificates.
Class A-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1 Certificates.
16
Class A-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.140% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.280% per annum.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group One Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Group One Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group One Mortgage Loans of any Net Swap Payments and
Swap Termination Payments owed to the Swap Counterparty for such Distribution
Date (other than Defaulted Swap Termination Payments), divided by (y) the
aggregate Stated Principal Balance of the Group One Mortgage Loans as of the
first day of the related Accrual Period and (iii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-1 Pass-Through Rate: For the first Distribution Date, 5.4625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such Distribution
Date.
Class A-1 Upper Collar: With respect to each Distribution Date with respect
to which payments are received on the Class A-1 Cap Contract, a rate equal to
the lesser of One-Month LIBOR and 9.860% per annum.
Class A-2 Available Funds Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest on the Group Two Mortgage Loans based on the Net Mortgage
Rates in effect on the related Due Date, less the pro rata portion (calculated
based on the ratio of the Group Two Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap Payments and
Swap Termination Payments (other than Defaulted Swap Termination Payments) owed
to the Swap Counterparty for such Distribution Date, divided by (y) the
aggregate Stated Principal Balance of the Group Two Mortgage Loans as of the
first day of the related Accrual Period and (iii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-2 Cap Contract: The confirmation and agreement between the Trustee
on behalf of the Issuing Entity and the Cap Contract Counterparty (in the form
of Exhibit N-2 hereto).
Class A-2 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table attached hereto as
Exhibit O-2.
Class A-2 Cap Contract Termination Date: The Distribution Date in December
2006.
17
Class A-2 Certificates: Any of the Class A-2A, Class A-2B, Class A-2C and
Class A-2D Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group Two Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Group Two Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap Payments and
Swap Termination Payments owed to the Swap Counterparty for such Distribution
Date (other than Defaulted Swap Termination Payments), divided by (y) the
aggregate Stated Principal Balance of the Group Two Mortgage Loans as of the
first day of the related Accrual Period and (iii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-2 Upper Collar: With respect to each Distribution Date with respect
to which payments are received on the Class A-2 Cap Contract, a rate equal to
the lesser of One-Month LIBOR and 10.500% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.
Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.030% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.060% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date, 5.3525% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
18
Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.
Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.090% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.180% per annum.
Class A-2B Pass-Through Rate: For the first Distribution Date, 5.4125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C Certificates.
Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2C Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.150% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.300% per annum.
19
Class A-2C Pass-Through Rate: For the first Distribution Date, 5.4725% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class A-2D Certificate: Any Certificate designated as a "Class A-2D
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2D Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2D Certificates.
Class A-2D Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2D Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2D Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2D Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2D Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2D Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2D Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2D Pass-Through Rate for the related Accrual Period.
Class A-2D Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.240% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.480% per annum.
Class A-2D Pass-Through Rate: For the first Distribution Date, 5.5625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class B Certificates: Any of the Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as "Class B-1 Certificate
"on the face thereof in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a
20
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-1 Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.970% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.455% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 6.2925% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M Certificate Principal Balance, have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date, (F) the Class
M-5 Certificate Principal Balance (after taking into account distributions of
the Class M-5 Principal Distribution Amount on such Distribution Date, (G) the
Class M-6 Certificate Principal Balance (after taking into account distributions
of the Class M-6 Principal Distribution Amount on such Distribution Date and (H)
the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 86.40% of the Stated Principal
Balance of the Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated Principal Balance of the Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Class A Certificates and Class M
Certificates has been reduced to zero, the Class B-1 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A and Class M
Certificates and (II) in no event will the Class B-1 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-1 Certificate
Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-1 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
21
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.050% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.575% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 6.3725% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date), (F) the Class M-5 Certificate
Principal Balance (after taking into account distributions of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class M-6
Certificate Principal Balance (after taking into account distributions of the
Class M-6 Principal Distribution Amount on such Distribution Date), (H) the
Class B-1 Certificate Principal Balance (after taking into account distributions
of the Class B-1 Principal Distribution Amount on such Distribution Date) and
(I) the Class B-2 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 89.20% of the Stated Principal
Balance of the Mortgage Loans
22
as of such Distribution Date and (B) the excess of the Stated Principal Balance
of the Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M and Class B-1 Certificates has been
reduced to zero, the Class B-2 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class B-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M and Class B-1 Certificates and (II)
in no event will the Class B-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-2 Certificate Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-2 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3 Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.850% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 2.775% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 7.1725% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate
23
Principal Balance and the Class B-2 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (F) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date), (G) the Class M-6 Certificate Principal
Balance (after taking into account distributions of the Class M-6 Principal
Distribution Amount on such Distribution Date), (H) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date), (I) the Class B-2
Certificate Principal Balance (after taking into account distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date) and (J) the
Class B-3 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 91.20% of the Stated Principal Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Class A, Class M, Class B-1 and Class B-2
Certificates has been reduced to zero, the Class B-3 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M, Class B-1 and
Class B-2 Certificates and (II) in no event will the Class B-3 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-3 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance".
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class C Certificates.
Class C Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class C Distributable Interest Rate on
a notional amount equal to the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date, plus the
interest portion of any previous distributions on such Class that is recovered
as a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class C
Certificates.
24
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
(other than the Class LT-IO Interest) over (b) two times the weighted average of
the interest rates on the Lower Tier REMIC I Marker Interests and the Class LTIX
Interest (treating for purposes of this clause (b) the interest rate on each of
the Lower Tier REMIC I Marker Interests as being subject to a cap and a floor
equal to the interest rate of the Corresponding REMIC Regular Interest of the
Corresponding Certificates (as adjusted, if necessary, to reflect the length of
the Accrual Period for the LIBOR Certificates) and treating the Class LTIX
Interest as being capped at zero). The averages described in the preceding
sentence shall be weighted on the basis of the respective principal balances of
the Lower Tier REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class LTA-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificates and an interest rate equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2D Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
25
Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LT-IO Interest: An uncertificated regular interest in the Lower Tier
REMIC with the characteristics set forth in the description of the Lower Tier
REMIC in the Preliminary Statement.
Class LTIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC I Marker Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC II Marker Interests, and with
an interest rate equal to the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage Loans over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% the aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an interest
rate equal to the rate set forth in footnote 9 to the description of the Lower
Tier REMIC in the Preliminary Statement.
Class LTII2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage Loans over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans and with an interest rate
equal to the rate set forth in footnote 10 to the description of the Lower Tier
REMIC in the Preliminary Statement.
Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
26
Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Certificate Principal Balance: For any date of determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2 Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class M-4
Certificate Principal Balance, Class M-5 Certificate Principal Balance and Class
M-6 Certificate Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.300% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.450% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 5.6225% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the
27
Weighted Average Available Funds Cap for such Distribution Date and (3) the
Weighted Average Maximum Rate Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 63.10% of the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date and (B) the excess of the Stated
Principal Balances for the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Class A Certificates has been reduced to
zero, the Class M-1 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-1 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.310% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.465 % per annum.
28
Class M-2 Pass-Through Rate: For the first Distribution Date, 5.6325% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class M-2 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
69.80% of the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date and (B) the excess of the Stated Principal Balances of the
Mortgage Loans as of the end of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates and the Class M-1 Certificates has
been reduced to zero, the Class M-2 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class M-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A and Class M-1 Certificates and (II) in no
event will the Class M-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates
29
and (2) interest on such excess (to the extent permitted by applicable law) at
the Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.320% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.480% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 5.6425% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 73.60% of
the Stated Principal Balances of the Mortgage Loans as of such Distribution Date
and (B) the excess of the Stated Principal Balances for the Mortgage Loans as of
such Distribution Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates and the Class M-2 Certificates has
been reduced to zero, the Class M-3 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class M-3
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M-1 and Class M-2 Certificates and (II)
in no event will the Class M-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-3 Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of
30
such Distribution Date plus the portion of any previous distributions on such
Class in respect of Current Interest or Class M-4 Interest Carry Forward Amount
that is recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class M-4 Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.380% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.570% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 5.7025% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance and
Class M-3 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (C) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date) and (D) the Class M-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 77.10% of the Stated Principal Balances of the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of such Distribution Date over the Minimum
Required Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates, the Class M-1 Certificates, the
Class M-2 Certificates and the Class M-3 Certificates has been reduced to zero,
the Class M-4 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-4 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1, Class M-2 and Class M-3 Certificates and (II) in no
event will the Class M-4 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
31
Class M-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5 Certificates.
Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5 Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.400% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.600% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 5.7225% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 80.30% of the Stated Principal Balances of the Mortgage Loans as
of such Distribution Date and (B) the excess of the Stated Principal Balances
for the Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates, the Class M-1 Certificates, the
Class
32
M-2 Certificates, the Class M-3 Certificates an the Class M-4 Certificates has
been reduced to zero, the Class M-5 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class M-5
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates and (II) in no event will the Class M-5 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-5 Certificate
Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6 Certificates.
Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6 Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.460% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.690% per annum.
Class M-6 Pass-Through Rate: For the first Distribution Date, 5.7825% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate
33
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (F) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date), and (G) the Class M-6 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
83.50% of the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates
and the Class M-5 Certificates has been reduced to zero, the Class M-6 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-6 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates and (II) in no
event will the Class M-6 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-6 Certificate Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P Certificate on
the face thereof, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, representing the right to
distributions as set forth herein.
Class R Certificate: The Class R Certificate executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.
Class R Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such Distribution Date plus the portion of
any previous distributions on such Class in respect of Current Interest or a
Class R Interest Carry Forward Amount that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class R Certificate. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and
34
(2) interest on such excess (to the extent permitted by applicable law) at the
Class R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the Initial
Optional Termination Date for the Certificates, 0.140% per annum and, as of any
Distribution Date after the Initial Optional Termination Date, 0.280% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 5.4625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such Distribution
Date.
Class SWR Interest: The sole class of "residual interest" in the SWAP
REMIC.
Closing Date: June 26, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Xxxxxx Loan
Servicing LP, as servicer for the holders of Ownit Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-4." Funds in the Collection Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the Collection Account by the Servicer
pursuant to Section 4.02 hereof, provided that such amount shall not exceed
one-half of the product of (x) one-twelfth of the Servicing Fee Rate and (y) the
aggregate Stated Principal Balance of the Mortgage Loans.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan),
whether permanent or temporary, partial or entire, by exercise of the power of
eminent domain or condemnation, to the extent not required to be released either
to a Mortgagor in accordance with the terms of the related mortgage loan
documents or to the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan).
Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a collateral
assignment of the related Co-op Lease.
Corresponding Certificates: With respect to the Class LTA-1 Interest, the
Class A-1 and Class R Certificates. With respect to the Class LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest, the Class
A-2C Certificates. With respect to the Class LTA-2D Interest, the Class A-2D
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
Certificates.
35
With respect to the Class LTB-1 Interest, the Class B-1 Certificates. With
respect to the Class LTB-2 Interest, the Class B-2 Certificates. With respect to
the Class LTB-3 Interest, the Class B-3 Certificates.
Corresponding REMIC Regular Interest: For each Class of Certificates, the
interest in the Upper Tier REMIC listed on the same row in the table entitled
"Upper Tier REMIC" in the Preliminary Statement.
Current Interest: Any of the Class A-1 Current Interest, the Class A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C Current
Interest, the Class A-2D Current Interest, the Class R Current Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5 Current
Interest, the Class M-6 Current Interest, the Class B-1 Current Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest and the Class C
Current Interest.
Custodian: LaSalle Bank National Association, on behalf of the Trustee.
Cut-off Date: June 1, 2006.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap
Agreement as a result of an event of default under the Swap Agreement with
respect to which the Swap Counterparty is the defaulting party or a termination
event (including a Downgrade Termination Event) under that agreement (other than
illegality or a tax event) with respect to which the Swap Counterparty is the
sole Affected Party (as defined in the Swap Agreement).
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
36
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the initial Depository.
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.
Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 16th day of
the month of such Distribution Date or, if such 16th day is not a Business Day,
the next succeeding Business Day.
Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such 25th day
is not a Business Day, the next succeeding Business Day, commencing in July
2006.
Downgrade Termination Event: An event whereby (x) the Swap Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term debt ratings
at least equal to the levels specified in the Swap Agreement, and (y) at least
one of the following events has not occurred (except to the extent otherwise
approved by the Rating Agencies): (i) within the time period specified in the
Swap Agreement with respect to such downgrade, the Swap Counterparty shall
transfer the Swap Agreement, in whole, but not in part, to a substitute swap
counterparty that satisfies the requirements set forth in the Swap Agreement,
subject to the satisfaction of the Rating Agency Condition or (ii) within the
time period specified in the Swap Agreement with respect to such downgrade, the
Swap Counterparty shall collateralize its exposure to the Trust Fund pursuant to
an ISDA Credit Support Annex, subject to the satisfaction of the Rating Agency
Condition; provided that such ISDA Credit Support Annex shall be made a credit
support document for the Swap Counterparty pursuant to an amendment to the Swap
Agreement.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
37
Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first 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 with which such account is maintained, or (v) maintained
at an eligible institution whose commercial paper, short-term debt or other
short-term deposits are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi)
maintained with a federal or state chartered depository institution the deposits
in which are insured by the FDIC to the applicable limits and the short-term
unsecured debt obligations of which (or, in the case of a depository institution
that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by S&P or Prime-1 by Xxxxx'x
at the time any deposits are held on deposit therein, or (vii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency to the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: The Class C and Class P Certificates and any
other Certificate, as long as the acquisition and holding of such Certificate is
not covered by and exempt under the Underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the Class A,
Class M and Class B Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date over (2) the amount of interest such Class of Certificates would have been
entitled to receive on such Distribution Date at an interest rate equal to the
REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.
38
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately preceding such Distribution Date
reduced by the Principal Funds with respect to such Distribution Date and (ii)
$35,479,322.97 and over (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of such Distribution Date and (2) on and after the Stepdown
Date, (A) the sum of (x) the Aggregate Certificate Principal Balance immediately
preceding such Distribution Date, reduced by the Principal Funds with respect to
such Distribution Date and (y) the greater of (a) 8.80% of the aggregate Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however, that if on
any Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current aggregate Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.
Xxxxxx 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.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate that is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a class of Class A, Class M or Class
B Certificates is based upon the related Available Funds Cap or the Maximum Rate
Cap, the excess of (1) the amount of interest that such Class would have been
entitled to receive on such Distribution Date had the Pass-Through Rate for that
Class not been calculated based on the related Available Funds Cap or the
Maximum Rate Cap, up to but not exceeding the greater of (a) the related Maximum
Rate Cap or (b) the sum of (i) the related Available Funds Cap and (ii) the
product of (A) a fraction, the numerator of which is 360 and the denominator of
which is the actual number of days in the related Accrual Period and (B) the sum
of (x) the quotient obtained by dividing (I) an amount equal to the proceeds, if
any, payable under the related Cap Contract with respect to such Distribution
Date by (II) the aggregate Certificate Principal Balance of each of the Classes
of Certificates to which such Cap Contract relates for such Distribution Date
and (y) the quotient obtained by dividing (I) an amount equal to any Net Swap
Payments owed by the Swap Counterparty for such Distribution Date by (II) the
aggregate Stated Principal Balance of the Mortgage Loans as of the immediately
preceding Distribution Date over (2) the amount of interest such class was
entitled to receive on such Distribution Date based on the related Available
Funds Cap, together with (A) the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate for such class, without giving effect to the related Available
Funds Cap or the Maximum Rate Cap) and (B) any amount previously distributed
with respect to Floating Rate Certificate Carryover for such class that is
recovered as a voidable preference by a trustee in bankruptcy.
Form 8-K Disclosure Information: Has the meaning set forth in Section 3.27.
39
Xxxxxxx 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.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified in the
Group One Mortgage Loan Schedule attached hereto as Exhibit B-2.
Group One Net WAC: The Net WAC of Group One.
Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x) the Group One
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
the Class A-1 and Class R Certificates are outstanding and the Certificate
Principal Balance of the Class A-2 Certificates has been reduced to zero, the
Group One Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group One and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group Two" in
the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit B-3.
Group Two Net WAC: The Net WAC of Group Two.
Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that with respect to any Distribution Date on which the Class
A-2 Certificates are outstanding and the Certificate Principal Balances of the
Class A-1 and Class R Certificates have been reduced to zero, the Group Two
Principal Distribution Amount will equal the Class A Principal Distribution
Amount.
Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group Two and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
40
Indenture: An indenture relating to the issuance of notes guaranteed by the
NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate, the
Certificate Principal Balance of such Certificate or any predecessor Certificate
on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (or if such Mortgage
Loan is an REO Property, the fair market value of such REO Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the case of a
Co-op Loan), including any replacement policy or policies for any insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) pursuant to any Insurance Policy or any other insurance
policy covering such Mortgage Loan or Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan), to the extent such proceeds
are payable to the mortgagee under the Mortgage, the Servicer or the trustee
under the deed of trust and are not applied to the restoration of the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) or released either to the Mortgagor or to the holder of a senior
lien on the related Mortgaged Property (or the related Underlying Mortgaged
Property in the case of a Co-op Loan) in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount, the Class
A-2D Interest Carry Forward Amount, the Class R Interest Carry Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3 Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount, as the case
may be.
Interest Determination Date: With respect to the LIBOR Certificates, (i)
for any Accrual Period other than the first Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period and (ii) for the
first Accrual Period, June 22, 2006.
41
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee and the Trustee Fee,
(2) all Advances relating to interest with respect to the Mortgage Loans and
such Distribution Date, (3) all Compensating Interest with respect to the
Mortgage Loans and such Distribution Date, (4) Liquidation Proceeds with respect
to the Mortgage Loans (to the extent such Liquidation Proceeds relate to
interest) collected during the related Prepayment Period, (5) all proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related Prepayment
Period or pursuant to Section 9.01 not later than the related Determination Date
(to the extent that such proceeds relate to interest) less the Servicing Fee and
the Trustee Fee and (6) all Prepayment Charges received with respect to the
Mortgage Loans during the related Prepayment Period less (A) all Non-Recoverable
Advances relating to interest and (B) other amounts reimbursable to the Servicer
and the Trustee pursuant to this Agreement.
Issuing Entity: Ownit Mortgage Loan Trust, Series 2006-4.
LaSalle: LaSalle Bank National Association.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.
LIBOR Certificates: The Class A, Class M and Class B Certificates.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has certified (in accordance with Section 3.12) in the related
Prepayment Period that it has received all amounts it expects to receive in
connection with such liquidation or (b) as to which is not a first lien Mortgage
Loan and is delinquent 180 days or longer, the Servicer has certified in a
certificate of an officer of the Servicer delivered to the Depositor and the
Trustee that it does not believe that there is a reasonable likelihood that any
further net proceeds will be received or recovered with respect to such Mortgage
Loan.
Liquidation Proceeds: Amounts, including Condemnation Proceeds, Insurance
Proceeds, received in connection with the partial or complete liquidation of a
Mortgage Loan, whether through trustee's sale, foreclosure sale, sale by the
Servicer pursuant to this Agreement 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 the final sale of a related REO
Property, less the sum of related unreimbursed Advances, Servicing Fees,
Servicing Advances and any other expenses related to such Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
42
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest, the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest, the Class
LTB-3 Interest, the Class LTIX Interest, the Class LTIIX Interest, the Class
LTII1A Interest, the Class LTII1B Interest, the Class LTII2A Interest, the Class
LTII2B Interest, the Class LT-IO Interest and the Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower Tier
REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class LTII2B Interest and the Class LT-IO Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the principal
balance of the Class LTII1A Interest to (ii) the principal balance of the Class
LTII2A Interest that is equal to the ratio of (i) the excess of (A) the
aggregate Stated Principal Balance of Group One over (B) the current Certificate
Principal Balance of the Class A-1 and Class R Certificates to (ii) the excess
of (A) the aggregate Stated Principal Balance of Group Two over (B) the current
Certificate Principal Balance of the Class A-2 Certificates.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class A-2
Maximum Rate Cap or the Weighted Average Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
MIN: The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such Mortgage Loan and its successors and
assigns.
43
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument with all riders attached thereto
creating a first or second lien or a first or second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note. With
respect to a Co-op Loan, the security agreement with all riders attached thereto
creating a security interest in the stock allocated to a dwelling unit in a
residential cooperative housing corporation and pledged to secure such Co-op
Loan and the related Co-op Lease.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loans: Such of the mortgage 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 Properties the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement 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 Exhibits X-0, X-0 and B-3,
setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a Mortgage
Loan;
(x) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
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(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(H) the lifetime rate cap;
(xiii) location of the related Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is applicable and,
if so, the term of such Prepayment Charge;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan and all
amendments, modifications and attachments thereto with all riders attached
thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage Rate less (1) the Servicing Fee Rate and
(2) the Trustee Fee Rate.
Net Rate: The per annum rate set forth in footnote 8 to the description of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate being based
on the weighted average of the interest rates on the SWAP REMIC Regular
Interests as adjusted and as set forth in such footnote).
Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on the related
Fixed Rate Payer Payment Date (as defined in the Swap
45
Agreement) or made by the Swap Counterparty to the Supplemental Interest Trust
on the related Floating Rate Payer Payment Date (as defined in the Swap
Agreement). In each case, the Net Swap Payment shall not be less than zero.
Net WAC: With respect to any Distribution Date and for any Mortgage Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in such Mortgage
Group calculated based on the respective Net Mortgage Rates and the Stated
Principal Balances of such Mortgage Loans as of the preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off Date).
NIM Notes: The notes to be issued pursuant to the Indenture.
NIMs Insurer: Any of the one or more insurers, if any, that is guaranteeing
certain payments under any NIM Notes; provided, that upon the payment in full of
the NIM Notes, all rights of the NIMs Insurer hereunder shall terminate.
NIMs Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise with respect to the related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, 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, the
Servicer or the Trustee (or any other officer customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with a particular subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor, the Servicer or the Trustee, as the case
may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of (a) the
offered rates for one-month United States dollar deposits, as such rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference Banks for
one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Accrual
Period shall be the arithmetic
46
mean of such offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Accrual Period shall be the higher of (i) One-Month LIBOR as determined on
the previous Interest Determination Date and (ii) the Reserve Interest
Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Servicer or the Trustee, reasonably acceptable to each
addressee of such opinion; provided, however, that with respect to Section 6.04
or 10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (1) in fact be independent of the Depositor, the Servicer or the
Trustee, (2) not have any direct financial interest in the Depositor, the
Servicer or the Trustee or in any affiliate of any such party and (3) not be
connected with the Depositor, the Servicer or the Trustee as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The amount received by the Trustee in
connection with any purchase of all of the Mortgage Loans and REO Properties
pursuant to Section 9.01(b).
Optional Termination Price: On any date after the Initial Optional
Termination Date an amount equal to the sum of (i) the then aggregate
outstanding Stated Principal Balance of the Mortgage Loans (or, if such Mortgage
Loan is an REO Property, the fair market value of such REO Property) plus
accrued interest thereon at the applicable Mortgage Rate through the Due Date in
the month in which the Optional Termination Price is to be distributed to the
Certificateholders; (ii) any unreimbursed out-of-pocket costs and expenses owed
to the Trustee or the Servicer, any unpaid or unreimbursed Servicing Fees,
Trustee Fees and all unreimbursed Advances and Servicing Advances, in each case
incurred by such party in the performance of its obligations; (iii) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund in
connection with any violation relating to any of the Mortgage Loans of any
predatory or abusive lending law; and (iv) any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, owed to the Swap Counterparty.
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: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the sum of (x) the Stated Principal Balance of the Mortgage Loans over
(2) the Certificate Principal Balance of the Certificates (other than the Class
P Certificates and the Class C Certificates).
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Ownership Interest: As to any 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.
Ownit: Ownit Mortgage Solutions Inc., a California corporation, or its
successor in interest.
Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal to the
Certificate Principal Balance of such Class divided by the aggregate
Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of the
related Class shall equal the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of such Class; except that in the case of any Class P
Certificates, the Percentage Interest with respect to such Certificate
shown on the face of such Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Trust Fund created
pursuant to this Agreement, which shall be:
(i) holding Mortgage Loans transferred from the Depositor and other
assets of the Trust Fund, including the Cap Contracts and the Supplemental
Interest Trust subtrust, which in turn holds the Swap Agreement, and any
credit enhancement and passive derivative financial instruments that
pertain to beneficial interests issued or sold to parties other than the
Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) through the appropriate subtrust, as applicable, receiving
collections on the Mortgage Loans and the Swap Agreement and making
payments on such Certificates and interests in accordance with the terms of
this Agreement; and
(iv) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities cannot be contrary to
the status of the Trust Fund as a qualified special purpose entity under
existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
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(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency rating the Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor, the Trustee or any of its
Affiliates, which is then receiving the highest commercial or finance
company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by the Trustee or any
of its Affiliates) 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 one of the two highest long-term and the highest short-term ratings
of each such Rating Agency for such securities;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in the two highest long-term or the
highest short-term ratings of each Rating Agency 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 any such Rating Agency as evidenced by a letter from each
Rating Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (v)
above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation,
other than the Trustee or any of its Affiliates, incorporated under the
laws of the United States or any state thereof which, at the time of such
investment, have one of the two highest long term ratings of each Rating
Agency;
(ix) interests in any money market fund (including those managed or
advised the Trustee or its respective affiliates) which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term rating
by each Rating Agency rating such fund; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof, other than the Trustee or any of its
Affiliates, which on the date of acquisition has been rated by each such
Rating Agency in their respective highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such
49
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (ix) above); and provided, further, (I)
that no amount beneficially owned by any REMIC (including, without limitation,
any amounts collected by the Servicer but not yet deposited in the Collection
Account) may be invested in investments (other than money market funds) treated
as equity interests for Federal income tax purposes, unless the Servicer shall
receive an Opinion of Counsel, at the expense of the party requesting that such
investment be made, to the effect that such investment will not adversely affect
the status of the any REMIC provided for herein as a REMIC under the Code or
result in imposition of a tax on the Trust Fund or any REMIC provided for herein
and (II) each such investment must be a "permitted investment" within the
meaning of Section 860G(a)(5) of the Code. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
The Trustee may trade with itself or an affiliate when purchasing or selling
Permitted Investments.
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) that
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)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, 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 United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI or applicable successor form. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, 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.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j) hereof.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates.
Prepayment Charges: Any prepayment fees, premiums or charges to be paid by
the Mortgagor on a Mortgage Loan pursuant to the terms of the related Mortgage
Note or Mortgage, as applicable, as identified on the Mortgage Loan Schedule.
50
Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the calendar month in which such Servicer Remittance Date occurs and the
last day of the related Prepayment Period, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Servicer Remittance Date occurs and ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof), the amount, if any, by
which (i) one month's interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date or
in the case of a partial Principal Prepayment, on the amount of such prepayment,
exceeds (ii) the amount of interest paid or collected in connection with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period commencing on
the 16th day of the calendar month preceding the calendar month in which such
Distribution Date occurs, and ending on the 15th day of the calendar month in
which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) all scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) Principal
Prepayments collected in the related Prepayment Period, (3) the Stated Principal
Balance of each Mortgage Loan that was purchased by the Depositor or the
Servicer during the related Prepayment Period or, in the case of a purchase
pursuant to Section 9.01, on any Business Day prior to such Distribution Date,
(4) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loan is less than the aggregate unpaid principal of the
related Deleted Mortgage Loans delivered by the Sponsor in connection with a
substitution of a Mortgage Loan pursuant to Section 2.03(c), (5) all Liquidation
Proceeds collected during the related Prepayment Period (to the extent such
Liquidation Proceeds related to principal), (6) all Subsequent Recoveries
received during the related Due Period, and (7) all other collections and
recoveries in respect of principal during the related Prepayment Period less (A)
all Non-Recoverable Advances relating to principal with respect to the Mortgage
Loans and (B) other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated June 22, 2006
relating to the public offering of the Class A, Class M and Class B
Certificates.
PUD: A Planned Unit Development.
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Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Sponsor or the Transferor pursuant to Section 2.02 or 2.03
hereof or purchased by the Servicer pursuant to Section 3.12(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest on such unpaid principal balance at
the applicable Mortgage Rate from (a) the date through which interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders and (iii) any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection with any violation relating to such
Mortgage Loan of any predatory or abusive lending law. With respect to any REO
Property purchased by the Servicer pursuant to Section 3.12(c) hereof, an amount
equal to the fair market value of such REO Property, as determined in good faith
by the Servicer
Rating Agency: Either of S&P or Xxxxx'x. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Rating Agency Condition: As defined in the Swap Agreement.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no longer
legally required to pay (except for the extinguishment of debt that results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, England, (ii) whose quotations appear on the Reuters
Screen LIBO Page on the relevant Interest Determination Date and (iii) which
have been designated as such by the Trustee.
Regular Certificate: Any one of the Class A, Class M and Class B
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Securities and Exchange 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 Securities and Exchange Commission, or as may be
provided by the Securities and Exchange Commission or its staff from time to
time.
Related Certificates: For each interest in the Upper Tier REMIC, the Class
of Certificates listed on the same row in the table entitled "Upper Tier REMIC"
in the Preliminary Statement.
52
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit Q attached hereto. For clarification
purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Subcontractor engaged by the Trustee or
the Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
the Servicer or the Trustee.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the SWAP REMIC, the Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: In the case of a Class of the Class A, Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the Corresponding
REMIC Regular Interest.
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 proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
REMIC Regular Interests: Each of the interests in the Upper Tier REMIC as
set forth in the Preliminary Statement other than the Residual Interest.
REMIC SWAP Rate: For each Distribution Date (and the related Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap Agreement for
such Distribution Date, as set forth in the Prospectus Supplement.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer, on behalf of
the Trustee for the benefit of the Certificateholders, through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor for
a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not
53
more than 1% per annum higher or lower than that of the Deleted Mortgage Loan;
(3) have a similar or higher FICO score or credit grade than that of the Deleted
Mortgage Loan; (4) have a Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan; (5) have a remaining term to maturity no greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; (6) provide for
a Prepayment Charge on terms substantially similar to those of the Prepayment
Charge, if any, of the Deleted Mortgage Loan; (7) have the same lien priority as
the Deleted Mortgage Loan; (8) constitute the same occupancy type as the Deleted
Mortgage Loan; and (9) comply with each representation and warranty set forth in
Section 2.03 hereof.
Reportable Event: Has the meaning set forth in Section 3.27.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee or the Custodian, substantially in the form of Exhibit I
hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement.
Required Percentage: As of any Distribution Date following the Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date, over (B) the Certificate Principal
Balance of the most senior Class of Certificates outstanding as of such
Distribution Date, prior to giving effect to distributions to be made on such
Distribution Date and (2) the Stated Principal Balance of the Mortgage Loans as
of such Distribution Date.
Reserve Interest Rate: With respect to any Interest Determination Date, the
rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (2)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trustee are quoting on such Interest Determination Date to leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class SWR Interest and Class LTR Interest
and distributions on the Class R Certificate in respect of Excess Interest.
Responsible Officer: When used with respect to the Trustee or the Servicer,
any officer of the Trustee or the Servicer with direct responsibility for the
administration of this Agreement and any other officer 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.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as of
June 1, 2006 between the Depositor and the Sponsor.
54
Xxxxxxxx-Xxxxx Act: means the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
(including any interpretations thereof by the Securities and Exchange
Commission's staff).
Xxxxxxxx-Xxxxx Certification: Has the meaning set forth in Section 3.27(k).
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.
Section 302 Requirements: Any rules or regulations promulgated pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, as amended.
Servicer: Xxxxxx Loan Servicing LP, a Delaware limited partnership, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the 20th
day (or if the 20th day is not a Business Day, the next succeeding Business Day)
of the month in which such Distribution Date occurs.
Servicer Trigger Event: As defined in Section 7.02 hereof.
Servicer's Assignee: As defined in Section 10.14(a).
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance of the Servicer's servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, inspection, restoration and protection of a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), including without
limitation advances in respect of real estate taxes and assessments, (2) any
collection, enforcement or judicial proceedings, including without limitation
foreclosures, collections and liquidations, (3) the conservation, management,
sale and liquidation of any REO Property, (4) executing and recording
instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage to
the extent not otherwise recovered from the related Mortgages or payable under
this Agreement, (5) correcting errors of prior servicers; costs and expenses
charged to the Servicer by the Trustee; tax tracking; title research; flood
certifications; lender paid mortgage insurance, (6) obtaining or correcting any
legal documentation required to be included in the Mortgage Files and reasonably
necessary for the Servicer to perform its obligations under this Agreement and
(7) compliance with the obligations under Sections 3.01 and 3.10; provided that
such amounts are required to be advanced only to the extent such advances
constitute "unanticipated expenses" within the meaning of Treasury Regulation
Section 1.860G-1(b)(3)(ii).
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 equal to the product of (x) one-twelfth of the Servicing Fee Rate and (y)
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date or, in the event of any payment of interest that accompanies a
Principal Prepayment in full made by the Mortgagor, interest at the Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
preceding Distribution Date for the period covered by such payment of interest.
55
Servicing Fee Rate: 0.50% for each Mortgage Loan.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished to the Trustee by the Servicer on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended.
Servicing Rights Pledgee: One or more lenders, selected by the Servicer, to
which the Servicer may pledge and assign all of its right, title and interest
in, to and under this Agreement (other than rights with respect to Advances and
Servicing Advances herein), including JPMorgan Chase Bank, N.A., as the
representative of certain lenders.
Servicing Transfer Costs: In the event that the Servicer does not reimburse
the Trustee under this Agreement, all costs associated with the transfer of
servicing from the predecessor Servicer, including, without limitation, any
costs or expenses associated with the termination of the predecessor servicer,
the appointment of a successor servicer, the complete transfer of all servicing
data and the manipulation, completion or correction of such servicing data as
may be required by the Trustee or any successor servicer to correct any errors
or insufficiencies in the servicing data or otherwise to enable the Trustee or
successor servicer to service the Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Significance Estimate: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be an amount determined based
on the reasonable good-faith estimate by the Depositor or its affiliate of the
aggregate maximum probable exposure of the outstanding Certificates to the Swap
Agreement.
Significance Percentage: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be a percentage equal to the
Significance Estimate divided by the aggregate outstanding Certificate Principal
Balance of the Certificates, prior to the distribution of the Principal
Distribution Amount on such Distribution Date.
Sponsor: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
its successor in interest.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Servicer as of the close of
business on the Determination Date related to such Distribution Date or with
respect to which Advances were made on the Servicer Advance Date prior to such
Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
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Stepdown Date: The earlier of: (A) the first Distribution Date on which the
aggregate Certificate Principal Balance of the Class A-1 Certificates and Class
A-2 Certificates has been reduced to zero; and (B) the later to occur of (1) the
Distribution Date in July 2009 or (2) the first Distribution Date on which the
Class A Certificate Principal Balance (reduced by the Principal Funds with
respect to such Distribution Date) is less than or equal to 55.80% of the
aggregate Stated Principal Balances of the Mortgage Loans as of such
Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ ----------------------------------
July 2008 - June 2009 1.40% with respect to July 1 2008,
plus an additional 1/12th of 1.60%
for each month thereafter
July 2009 - June 2010 3.00% with respect to July 2009,
plus an additional 1/12th of 1.00%
for each month thereafter
July 2010 - June 2011 4.00% with respect to July 2010,
plus an additional 1/12th of 0.75%
for each month thereafter
July 2011 - June 2012 4.75% with respect to July 2011,
plus an additional 1/12th of 0.25%
for each month thereafter
July 2012 and thereafter 5.00%
Stepdown Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans that are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 30.19%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the Stepdown Required Loss Percentage.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
Subordinate Certificates: Each Class of the Class M and Class B
Certificates.
Subordinate Certificates Cap Contract: The confirmation and agreement
between the Trust Fund or the Trustee and the Cap Contract Counterparty (in the
form of Exhibit N-4 hereto).
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Subordinate Certificates Cap Contract Notional Balance: With respect to any
Distribution Date, the Subordinate Certificates Cap Contract Notional Balance
set forth for such Distribution Date in the Subordinate Certificates One-Month
LIBOR Cap Table attached hereto as Exhibit O-4.
Subordinate Certificates Cap Contract Termination Date: The Distribution
Date in December 2006.
Subordinate Certificates Lower Collar: With respect to each Distribution
Date, the applicable per annum rate set forth under the heading "1ML Strike
Lower Collar" in the Subordinate Certificates One-Month LIBOR Cap Table.
Subordinate Certificates Upper Collar: With respect to each Distribution
Date with respect to which payments are received on the Subordinate Certificate
Cap Contract, a rate equal to the lesser of One-Month LIBOR and 8.9500% per
annum.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
reimbursed to the Servicer related to such Mortgage Loan) subsequent to such
Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of the material servicing
functions required to be performed by the Servicer under this Agreement, with
respect to some or all of the Mortgage Loans, that are identified in Item
1122(d) of Regulation AB and meets any of the criteria of Item 1108(a)(2)(i),
(ii) or (iii).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Supplemental Interest Trust: The separate trust, established pursuant to
Section 4.04(l) of this Agreement and held by the Trustee for the benefit of the
holders of the Certificates as a segregated subtrust of the Trust Fund, in which
the Swap Agreement will be held, out of which any Swap Termination Payments or
Net Swap Payments owed to the Swap Counterparty will be paid, certain
distributions to Certificateholders will be made, and into which any Swap
Termination Payments or Net Swap Payments received from the Swap Counterparty
will be deposited as set forth in Section 4.04 hereof.
Swap Account: The separate Eligible Account created and maintained by the
Trustee pursuant to Section 4.04(l)(i) in the name of the Trustee for the
benefit of the Trust Fund and designated "LaSalle Bank National Association, as
trustee, in trust for registered holders of Ownit Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-4." Funds in the Swap Account shall
be held in trust for the Trust Fund for the uses and purposes set forth in this
Agreement.
Swap Agreement: The confirmation to the master agreement, dated as of June
26, 2006, between the Swap Counterparty and the trustee of the Supplemental
Interest Trust for the benefit of the Issuing Entity or any other cap agreement
or swap agreement (including any related schedules) held by the Supplemental
Interest Trust pursuant to Section 4.04(l) hereof.
Swap Counterparty: The Bank of New York or any successor counterparty who
meets the requirements set forth in the Swap Agreement.
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Swap LIBOR: With respect to any Distribution Date (and the related Accrual
Period) the product of (i) the Floating Rate Option (as defined in the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii) the quotient of
(a) the actual number of days in the Accrual Period for the Lower Tier REMIC
Interests divided by (b) 30.
Swap Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the second Business Day preceding each
Distribution Date.
SWAP REMIC: As described in the Preliminary Statement and Section 2.07.
SWAP REMIC Interests: Each of the interests in the SWAP REMIC as set forth
in the Preliminary Statement.
SWAP REMIC Regular Interests: Each of the SWAP REMIC Interests other than
the Class SWR Interest.
Swap Termination Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Counterparty upon termination of the Swap Agreement as a
result of termination of the Swap Agreement.
Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Transfer Agreement: The Master Mortgage Loan Purchase and Interim Servicing
Agreement dated as of April 1, 2005, between Xxxxxxx Xxxxx Mortgage Capital
Inc., as purchaser and Ownit, as seller and interim servicer, as amended, and as
supplemented by the Bring Down Letter.
Transferor: Ownit.
Transferor Affirmation Notice: A notice from Fitch to the Depositor or the
Sponsor that the ratings of the Certificates will not be negatively impacted by
the removal of the Sponsor's obligation to honor the Transferor's
representations and warranties, a copy of which notice shall be provided by
either the Sponsor or the Depositor to the Trustee.
Trust Fund: The corpus of the trust (the "Ownit Mortgage Loan Trust, Series
2006-4") created hereunder consisting of (i) the Mortgage Loans and all interest
and principal received on or with respect thereto on and after the Cut-off Date
to the extent not applied in computing the Cut-off Date Principal Balance
thereof, exclusive of interest not required to be deposited in the Collection
Account; (ii) the Collection Account, the Certificate Account and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights under the
Insurance Policies with respect to the Mortgage Loans; (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; (vi) the Cap Contracts and Cap Contract Account and (vii) the
Supplemental Interest Trust, which in turn holds the Swap Agreement.
Trustee: LaSalle Bank National Association, a national banking association,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
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Trustee Fee: A fee paid monthly to the Trustee from interest collected with
respect to each Mortgage Loan equal to the product of (a) one-twelfth of the
Trustee Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan. The
Trustee is also entitled to a portion of investment income earned on amounts on
deposit in the Certificate Account as set forth in Section 3.05(g) hereof.
Trustee Fee Rate: 0.0075% for each Mortgage Loan.
Uncertificated Class C Interest: An uncertificated REMIC Regular Interest
having the characteristics described in the Preliminary Statement.
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2 Upper Collar
or the Subordinate Certificate Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1 Interest and
the Residual Interest, a per annum rate equal to the weighted average of the
interest rate of the Class LTII1B Interest for such Distribution Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate for the
Class LTII2B Interest for such Distribution Date. In the case of the Class
UTM-1, Class UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class UTM-6, Class
UTB-1, Class UTB-2 and Class UTB-3 Interests, a per annum rate equal to the
weighted average (adjusted, in the case of the Class UTB-1, Class UTB-2 and
Class UTB-3 Interests, to reflect accruals on the basis of a 360 day year
consisting of twelve 30 day months) of the interest rates of Class LTII1B and
Class LTII2B Interests for such Distribution weighted, respectively, on the
basis of the uncertificated principal balances of the Class LTII1A and the Class
LTII2A Interests.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes and (2) each Class of the Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.
Weighted Average Available Funds Cap: With respect to a Distribution Date,
the per annum rate equal to the weighted average of the Class A-1 Available
Funds Cap and the Class A-2 Available Funds Cap (weighted in proportion to the
results of subtracting from the aggregate stated principal balance of each
mortgage group, the current certificate principal balance of the class A-1 and
class R certificates, in the case of group one, or the class A-2 certificates,
in the case of group two).
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Weighted Average Maximum Rate Cap: With respect to a Distribution Date, the
per annum rate equal to the weighted average (weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of each
Mortgage Group, the current Certificate Principal Balance of the Class A-1 and
Class R Certificates, in the case of Group One, or the Class A-2 Certificates,
in the case of Group Two) of the Class A-1 Maximum Rate Cap and the Class A-2
Maximum Rate Cap.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans, on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
It is agreed and understood by the Depositor, the Servicer and the Trustee
that it is not intended that any Mortgage Loan be included in the Trust that is,
without limitation, a "High-Cost Home Loan" as defined by the Home Ownership and
Equity Protection Act of 1994 or any other applicable anti-predatory lending
laws, including but not limited to (i) a "High-Cost Home Loan" as defined in the
New Jersey Home Ownership Act effective November 27, 2003; (ii) a "High-Cost
Home Loan" as defined in the New Mexico Home Loan Protection Act effective
January 1, 2004; or (iii) a "High-Cost Home Loan" as defined in the
Massachusetts Predatory Home Loan Practices Act effective November 7, 2004; (iv)
a "High-Cost Home Loan" as defined by the Indiana High Cost Home Loan Law
effective January 1, 2005 or (v) a "High-Cost Home Loan" as defined by the
Illinois High-Risk Home Loan Act effective January 1, 2004.
(i) In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee or the Custodian, the following documents or
instruments with respect to each Mortgage Loan so assigned that is not a Co-op
Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the order
of LaSalle Bank National Association, as trustee, without recourse"
together with all riders thereto. The Mortgage Note shall include all
intervening endorsements showing a complete chain of the title from the
originator to [____________________] or "Pay to the order of LaSalle Bank
National Association, as trustee, without recourse";
(B) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet
been returned from the recording office, a copy of the original Mortgage
certified by the Transferor to be true copy of the original of the Mortgage
that has been delivered for recording in the appropriate recording office
of the jurisdiction in which the Mortgaged Property is located and in the
case of each MERS Loan, the original Mortgage, noting the presence of the
MIN of the Loan and either language indicating that the Mortgage Loan is a
MOM Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage
61
and the assignment thereof to MERS, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording office
in which such Mortgage has been recorded;
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage endorsed either in blank or, to
"LaSalle Bank National Association, as trustee;"
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has not
been received from the title insurance company);
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located; and
(F) Originals of all assumption and modification agreements, if any.
(ii) In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee or the Custodian the following documents or
instruments with respect to each Mortgage Loan so assigned that is a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension and
modification agreement)), in either case endorsed either in blank or, "Pay
to the order of LaSalle Bank National Association, as trustee, without
recourse;"
(B) The original Mortgage entered into by the Mortgagor with respect
to such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in blank or to
"LaSalle Bank National Association, as trustee;"
(D) Original assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-Op Loan to the last
endorsee on the Mortgage Note;
(E) Original Form UCC-1 (or copy thereof) and any continuation
statements with evidence of filing thereon entered into by the Mortgagor
with respect to such Co-Op Loan (or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its agent
assigning the security interest covered by such Form UCC-1 to "LaSalle Bank
National Association, as trustee," together with all Forms UCC-3 (or copies
thereof) showing a complete chain of assignment from the originator of the
related Co-op Loan to the Transferor, with evidence of recording thereon;
(G) Original stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of such
Co-op Loan with a stock power in blank attached;
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(H) Original proprietary lease;
(I) Original assignment of proprietary lease or a copy thereof, to the
Trustee or in blank, and all intervening assignments thereof;
(J) Original recognition agreement or a copy thereof of the interests
of the mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the
related Mortgagor to the originator of such Co-op Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F) above
with respect to such Co-op Loan.
If in connection with any Mortgage Loan that is not a Co-op Loan, the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
thereon, if applicable, concurrently with the execution and delivery of this
Agreement solely because of a delay caused by the public recording office where
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee or the Custodian
written notice stating that such Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered to the appropriate public
recording office for recordation. Thereafter, the Depositor shall deliver or
cause to be delivered to the Trustee or the Custodian such Mortgage, Assignments
of Mortgage or assumption, consolidation or modification, as the case may be,
with evidence of recording indicated thereon, if applicable, upon receipt
thereof from the public recording office. To the extent any required endorsement
is not contained on a Mortgage Note or an Assignment of Mortgage, the Depositor
shall make or cause such endorsement to be made.
With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Servicer or the Trustee shall be obligated to cause to be
recorded the Assignment of Mortgage referred to in this Section 2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer or the Trustee
shall be obligated to cause to be filed the Form UCC-3 referred to in this
Section 2.01. In the event that any Assignment of Mortgage referred to in this
Section 2.01 is not recorded or is improperly recorded, the Servicer and the
Trustee shall have no liability for any failure to receive or act on notices
related to such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. None of the Depositor, the Servicer or the Trustee shall
take any action inconsistent with such ownership and shall not claim any
ownership interest therein. The Depositor, the Servicer and the Trustee shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee or the Custodian are and shall be held in trust by the
Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's possession of the contents of each Mortgage File so retained is for
the sole purpose of servicing the related Mortgage Loan, and such retention and
possession by the Servicer is in a custodial capacity only. The Depositor agrees
to take no action inconsistent with the Trustee's ownership of the Mortgage
Loans, to indicate promptly to all inquiring parties that the Mortgage Loans
have been sold and to claim no ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Sponsor to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title
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and interest in, to and under the obligations of the Sponsor deemed to be
secured by said pledge; and it is the intention of this Agreement that the
Depositor shall also be deemed to have granted to the Trustee a first priority
security interest in all of the Depositor's right, title, and interest in, to
and under the obligations of the Sponsor to the Depositor deemed to be secured
by said pledge and that the Trustee shall be deemed to be an independent
custodian for purposes of perfection of the security interest granted to the
Depositor. If the conveyance of the Mortgage Loans from the Depositor to the
Trustee is characterized as a pledge, it is the intention of this Agreement that
this Agreement shall constitute a security agreement under applicable law, and
that the Depositor shall be deemed to have granted to the Trustee a first
priority security interest in all of the Depositor's right, title and interest
in, to and under the Mortgage Loans, all payments of principal of or interest on
such Mortgage Loans, all other rights relating to and payments made in respect
of the Trust Fund, and all proceeds of any thereof. If the trust created by this
Agreement terminates prior to the satisfaction of the claims of any Person in
any Certificates, the security interest created hereby shall continue in full
force and effect and the Trustee shall be deemed to be the collateral agent for
the benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreement described therein and the benefit of the repurchase
obligations and the obligation of the Sponsor contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Sponsor, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto except as specifically set forth herein.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the exception report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it (or the
Custodian) holds and will hold such documents and any other documents
constituting a part of the Mortgage' Files delivered to it in trust for the use
and benefit of all present and future Certificateholders. The Depositor will
cause the Sponsor to repurchase any Mortgage Loan to which a material exception
was taken in the Exception Report unless such exception is cured to the
satisfaction of the Trustee within 45 Business Days of the Closing Date.
The Trustee acknowledges receipt of the three Cap Contracts (forms of which
are attached hereto as Exhibits N-1, N-2 and N-3), the Transfer Agreement, the
Bring Down Letter and the Sale Agreement.
The Trustee acknowledges receipt of the Swap Agreement (a form of which is
attached hereto as Exhibit S) that will be held in the Supplemental Interest
Trust and is hereby instructed to enter into the Swap Agreement, not in its
individual capacity, but solely as Trustee for the Supplemental Interest Trust.
The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer, to review or cause its Custodian to review each Mortgage File delivered
to it within 60 days after the Closing Date to ascertain and to certify, within
70 days of the Closing Date, to the NIMs Insurer, the Depositor and the Servicer
that all documents required by Section 2.01 (provided that with respect to the
items listed in
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Sections 2.01(i)(F) and 2.01(ii)(E)-(K), to the extent identified on the
Mortgage Loan Schedule) have been executed and received, and that such documents
relate to the Mortgage Loans identified in Exhibit B that have been conveyed to
it. It is herein acknowledged that, in conducting such review, the Trustee shall
not be under any duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable or appropriate for the represented purpose, that they have
actually been recorded or that they are other than what they purport to be on
their face. If the Trustee or the Custodian finds any document or documents
constituting a part of a Mortgage File to be missing or defective (that is,
mutilated, damaged, defaced or unexecuted) in any material respect, the Trustee
or the Custodian shall promptly (and in any event within no more than five
Business Days) after such finding so notify the NIMs Insurer, the Servicer, the
Sponsor and the Depositor. In addition, the Trustee or the Custodian shall also
notify the NIMs Insurer, the Servicer, the Sponsor and the Depositor if the
original Mortgage with evidence of recording thereon with respect to a Mortgage
Loan is not received within 70 days of the Closing Date; if it has not been
received because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation, the Depositor shall deliver or
cause to be delivered to the Trustee written notice stating that such Mortgage
has been delivered to the appropriate public recording office for recordation
and thereafter the Depositor shall deliver or cause to be delivered such
Mortgage with evidence of recording thereon upon receipt thereof from the public
recording office. The Trustee shall request that the Sponsor correct or cure
such omission, defect or other irregularity, or substitute a Mortgage Loan
pursuant to the provisions of Section 2.03, within 90 days from the date the
Sponsor was notified of such omission or defect and, if the Sponsor does not
correct or cure such omission or defect within such period, that the Sponsor
purchase such Mortgage Loan from the Trust Fund within 90 days from the date the
Trustee notified the Sponsor of such omission, defect or other irregularity at
the Purchase Price of such Mortgage Loan.
The Purchase Price for any Mortgage Loan purchased pursuant to this Section
2.02 shall be paid to the Servicer and deposited by the Servicer in the
Certificate Account or Collection Account, as appropriate, promptly upon
receipt, and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, the Trustee, upon receipt of a Request
for Release, shall promptly release to the Sponsor the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or
assignment, without recourse, as shall be requested by the Sponsor and necessary
to vest in the Sponsor or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage Loan. It is understood and agreed that the
obligation of the Sponsor to purchase, cure or substitute any Mortgage Loan as
to which a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders and the NIMs Insurer. The preceding
sentence shall not, however, limit any remedies available to the
Certificateholders, the NIMs Insurer, the Depositor or the Trustee pursuant to
the Sale Agreement, the Transfer Agreement and the Bring Down Letter.
The Trustee shall be under no duty or obligation to inspect, review and
examine such documents, instruments, certificates or other papers to determine
that they are genuine, enforceable, recordable, duly authorized, sufficient,
legal, valid or appropriate to the represented purpose, or that they have
actually been recorded, or that they are other than what they purport to be on
their face. The Servicer and the Trustee shall keep confidential the name of
each Mortgagor except as required by this Agreement and the Servicer and the
Trustee shall not solicit any such Mortgagor for the purpose of refinancing the
related Mortgage Loan; notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Trustee or the Servicer from sources other than the other parties hereto, (ii)
disclosure of any and all information (A) if required by any applicable law,
rule or regulation, (B) to any government agency or regulatory body having or
claiming authority to regulate or oversee any aspects of the Trustee's business
or that of its affiliates, (C) pursuant to any subpoena, civil investigation
demand or similar
65
demand or request of any court, regulatory authority, arbitrator or arbitration
to which Trustee or any affiliate or an officer, director, employer or
shareholder thereof is a party or (D) to any affiliate, independent or internal
auditor, agent, employee or attorney of the Trustee or the Servicer having a
need to know the same, provided that the Trustee or the Servicer, as applicable,
advises such recipient of the confidential nature of the information being
disclosed, or (iii) any other disclosure authorized by the Depositor. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of Mortgagors and data relating to the Mortgages shall be retained by the
Servicer.
Within 70 days of the Closing Date, the Trustee or the Custodian shall
deliver to the NIMs Insurer, the Depositor and the Servicer, the Trustee's
Certification, substantially in the form of Exhibit D attached hereto,
evidencing the completeness of the Mortgage Files, with any exceptions noted
thereto.
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer, the
NIMs Insurer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement and the Sale
Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and has
duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor; and the Depositor 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 Depositor's ability to perform or meet
any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or
66
enforceability of this Agreement and the Sale Agreement or the ability of
the Depositor to perform its obligations under this Agreement and the Sale
Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each Mortgage
Loan as of the Closing Date and following the transfer of the Mortgage
Loans to it by the Sponsor, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims, liens,
mortgage, pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of the Transferor with respect
to the Mortgage Loans contained in the Transfer Agreement were made as of the
date of the Transfer Agreement and brought forward to the Closing Date pursuant
to the Bring Down Letter. The representations and warranties of the Transferor
with respect to the Mortgage Loans contained in the Bring Down Letter were made
as of the Closing Date. The representations and warranties of the Sponsor with
respect to the Mortgage Loans contained in the Sale Agreement were made as of
the Closing Date.
To the extent that any fact, condition or event with respect to a Mortgage
Loan constitutes a breach of a representation or warranty of the Transferor
under the Transfer Agreement (whether or not such fact, condition or event would
also constitute a breach of a representation or warranty of the Sponsor under
the Sale Agreement), the only rights or remedies of the Trustee, the NIMs
Insurer or of any Certificateholder shall be first, the Trustee's right to
enforce the obligations of the Transferor under such applicable representation
or warranty made by it and, second, only if the Transferor is unable or
unwilling to fulfill its obligations to cure or repurchase such Mortgage Loan,
the Trustee shall exercise its right to enforce any rights it may have against
the Sponsor under the Sale Agreement with respect to such representation or
warranty; provided, that in the event the Trustee shall have received a copy of
any Transferor Affirmation Notice, the Trustee shall only be entitled to enforce
any rights it has against the Transferor under the Transfer Agreement and shall
not have any rights against the Sponsor under the Sale Agreement with respect to
such representation or warranty. To the extent that any fact, condition or event
with respect to a Mortgage Loan constitutes a breach of a representation or
warranty made by the Sponsor in the Sale Agreement that does not also constitute
a breach of a representation or warranty of the Transferor under the Transfer
Agreement, the Trustee shall enforce any rights it may have against the Sponsor
under the Sale Agreement. In furtherance of the above, the Sponsor expressly
acknowledges that prior to the issuance of a Transferor Affirmation Notice, it
shall be obligated and liable to the Trustee, the NIMs Insurer and the
Certificateholders for any breach of a representation or warranty made under the
Transfer Agreement, but only after the Transferor evidences that it is unwilling
or unable to fulfill its contractual obligations under the Transfer Agreement.
The Trustee acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any circumstances.
In addition to the representations and warranties of the Transferor in the
Transfer Agreement that were brought forward to the Closing Date pursuant to the
Bring Down Letter, with respect to each Mortgage Loan, the Transferor made
certain additional covenants regarding such Mortgage Loan, as set forth in the
Transfer Agreement. With respect to any breach of such additional covenants that
materially and adversely affects the interests of the Certificateholders in such
Mortgage Loan, the Sponsor shall (1)
67
use reasonable efforts to enforce such covenant against the Transferor and (2)
if the Sponsor successfully enforces any obligation of the Transferor to
repurchase such Mortgage Loan, the Sponsor shall repurchase such Mortgage Loan
in accordance with this Section 2.03. If the Sponsor does not successfully
enforce the obligation, if any, of the Transferor to repurchase a Mortgage Loan
with respect to any breach of any such additional covenants, the Sponsor shall
have no obligation or right to repurchase or cure such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Servicer, the NIMs
Insurer or the Trustee of a breach of any of such representations and warranties
that adversely and materially affects the value of the related Mortgage Loan,
Prepayment Charges or the interests of the Certificateholders, the party
discovering such breach shall give prompt written notice to the other parties.
Within 90 days of the discovery of such breach of any representation or
warranty, the Transferor or the Sponsor, as applicable, shall either (a) cure
such breach in all material respects, (b) repurchase such Mortgage Loan or any
property acquired in respect thereof from the Trustee at the Purchase Price or
(c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. In the event of
discovery of a breach of any representation and warranty of the Transferor or
the Sponsor, the Trustee shall enforce its rights under the Transfer Agreement
or the Sale Agreement for the benefit of Certificateholders and the NIMs
Insurer. If a breach of the representations and warranties set forth in the
Transfer Agreement exists solely due to the unenforceability of a Prepayment
Charge, the Trustee shall notify the NIMs Insurer thereof and not seek to
enforce the repurchase remedy provided for herein unless directed in writing to
do so by the NIMs Insurer. In the event of a breach of the representations and
warranties with respect to the Mortgage Loans set forth in the Transfer
Agreement, the Trustee shall, at the request of the NIMs Insurer, enforce the
right of the Trust Fund and the NIMs Insurer to be indemnified for such breach
of representation and warranty. In the event that such breach relates solely to
the unenforceability of a Prepayment Charge, amounts received in respect of such
indemnity up to the amount of such Prepayment Charge shall be distributed
pursuant to Section 4.04(b)(i). As provided in the Sale Agreement, if the
Transferor substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the Transfer Agreement which adversely and
materially affects the value of such Mortgage Loan and such substitute mortgage
loan is not a Replacement Mortgage Loan, under the terms of the Sale Agreement,
the Sponsor will, in exchange for such substitute Mortgage Loan, (i) provide the
applicable Purchase Price for the affected Mortgage Loan or (ii) within two
years of the Closing Date, substitute such affected Mortgage Loan with a
Replacement Mortgage Loan. Any such substitution shall not be effected prior to
the additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit I and shall not be effected unless it is within two years of
the Startup Day. As provided in the Sale Agreement, the Sponsor indemnifies and
holds the Trust Fund, the Trustee, the Custodian, the Depositor, the NIMs
Insurer, the Servicer and each Certificateholder harmless against any and all
taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the Trust
Fund, the Trustee, the Custodian, the Depositor, the NIMs Insurer, the Servicer
and any Certificateholder may sustain in connection with any actions of the
Sponsor relating to a repurchase of a Mortgage Loan other than in compliance
with the terms of this Section 2.03 and the Sale Agreement, to the extent that
any such action causes (i) any federal or state tax to be imposed on the Trust
Fund or any REMIC provided for herein, including without limitation, any federal
tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
on "contributions after the startup day" under Section 860G(d)(1) of the Code,
or (ii) any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. In furtherance of the foregoing, if the
Sponsor is not a member of MERS and repurchases a Mortgage Loan which is
registered on the MERS System, the Sponsor, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the
Sponsor and shall cause such Mortgage to be removed from registration on the
MERS System in accordance with MERS' rules and regulations.
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With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement, by the Sponsor pursuant to the Sale Agreement or by the
Transferor pursuant to the Transfer Agreement, the principal portion of the
funds received by the Servicer in respect of such repurchase of a Mortgage Loan
will be considered a Principal Prepayment and shall be deposited by the Servicer
in the Collection Account pursuant to Section 3.05 and the Servicer shall notify
the Trustee of its receipt of the same. The Trustee, upon receipt of notice from
the Servicer of its receipt of the full amount of the Purchase Price for a
Deleted Mortgage Loan, or upon receipt of the Mortgage File for a Replacement
Mortgage Loan substituted for a Deleted Mortgage Loan, shall release or cause to
be released and reassign to the Depositor, the Sponsor or the Transferor, as
applicable, the related Mortgage File for the Deleted Mortgage Loan and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest in
such party or its designee or assignee title to any Deleted Mortgage Loan
released pursuant hereto, free and clear of all security interests, liens and
other encumbrances created by this Agreement, which instruments shall be
prepared by the Depositor or the Sponsor, and the Trustee shall not have any
further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee or the Custodian pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the Depositor, the Transferor or the Sponsor,
as applicable, must deliver to the Trustee or the Custodian the Mortgage File
for the Replacement Mortgage Loan containing the documents set forth in Section
2.01 along with a written certification certifying as to the delivery of such
Mortgage File and containing the granting language set forth in Section 2.01;
and (ii) the Depositor will be deemed to have made, with respect to such
Replacement Mortgage Loan, each of the representations and warranties made by it
with respect to the related Deleted Mortgage Loan. The Trustee or the Custodian
shall review the Mortgage File with respect to each Replacement Mortgage Loan
and certify to the NIMs Insurer and the Depositor that all documents required by
Section 2.01 have been executed and received.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Sponsor to the Servicer for deposit into
the Collection Account on the Determination Date for the Distribution Date
relating to the Prepayment Period during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee and the NIMs Insurer
shall each have received an Opinion of Counsel (at the expense of the party
seeking to make the substitution) that, under current law, such substitution
will not (A) affect adversely the status of any REMIC established hereunder as a
REMIC, or of the related "regular interests" as "regular interests" in any such
REMIC, or (B) cause any such REMIC to engage in a "prohibited transaction" or
prohibited contribution pursuant to the REMIC Provisions.
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The Sponsor shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement.
The Sponsor shall give or cause to be given written notice to the
Certificateholders and the NIMs Insurer that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Replacement Mortgage Loan or Replacement Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the Servicer, and
the Trustee. Upon such substitution by the Sponsor, such Replacement Mortgage
Loan or Replacement Mortgage Loans shall constitute part of the Mortgage Pool
and shall be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution.
(d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the Sponsor and
the Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of the Transferor, assigned by the Sponsor to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Servicer on the Closing Date.
(f) The Depositor shall notify the Servicer and the Trustee when any
NIM Notes are issued and when such NIM Notes are no longer outstanding.
SECTION 2.04. Representations and Warranties of the Servicer
(a) The Servicer hereby represents and warrants to the Depositor and
the Trustee as follows, as of the date hereof:
(i) The Servicer is duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware and
is duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by the Servicer in any state in which a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) 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 ensure its ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Servicer has the corporate power and authority to
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 corporate action on the part of the 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
Servicer, enforceable against the Servicer in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific
70
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans 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 Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the 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 Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Xxxxxx Xxx and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
(viii) Notwithstanding any state or federal law to the contrary,
the Servicer shall not impose or collect a Prepayment Charge in any instance
when the mortgage debt is accelerated as the result of the Mortgagor's default
in making the Mortgage Loan payments.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that are not
"Qualified Mortgages."
Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee, upon the written request of the
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Depositor, shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Trustee has caused
to be authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform its duties set forth in this Agreement in
accordance with the provisions hereof.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper Tier REMIC, the Lower Tier
REMIC and the SWAP REMIC as a REMIC. The Trustee shall sign the returns
providing for such elections and such other tax or information returns that are
required to be signed by the Trustee under applicable law. This Agreement shall
be construed so as to carry out the intention of the parties that each of the
Upper Tier REMIC, the Lower Tier REMIC and the SWAP REMIC be treated as a REMIC
at all times prior to the date on which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the designations 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.
The SWAP REMIC shall consist of all of the assets of the Trust Fund,
other than (i) amounts distributable to the Class P Certificates pursuant to
Section 4.04(b)(i) hereof, (ii) the interests issued by the SWAP REMIC and the
interests issued by the Lower Tier REMIC, (iii) the grantor trusts described in
Section 2.07 hereof, (iv) each Cap Contract and the Cap Contract Account and (v)
the Swap Agreement and the Supplemental Interest Trust. The SWAP REMIC shall
issue the SWAP REMIC Regular Interests, which shall be designated as regular
interests of such REMIC, and shall issue the Class SWR Interest, which shall be
designated as the sole class of residual interest in the SWAP REMIC. Each of the
SWAP REMIC Regular Interests shall have the characteristics set forth in the
Preliminary Statement and this Section 2.07.
The Lower Tier REMIC shall consist of the SWAP REMIC Regular
Interests. The Lower Tier REMIC shall issue the Lower Tier REMIC Regular
Interests, which shall be designated as regular interests of such REMIC and
shall issue the Class LTR Interest, which shall be designated as the sole class
of residual interest in the Lower Tier REMIC. Each of the Lower Tier REMIC
Regular Interests shall have the characteristics set forth in its definition and
the Preliminary Statement.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest and the Class UT-IO
Interest) and on the sole class of
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residual interest in the Upper Tier REMIC shall be subject to a cap equal to the
Upper Tier REMIC Net WAC Cap.
The beneficial ownership of the Class SWR Interest, Class LTR Interest
and the Residual Interest shall be represented by the Class R Certificate. The
Class SWR Interest and Class LTR Interest shall not have a principal balance or
bear interest.
(c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of the Class R Certificate, by
its acceptance thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to act as "tax matters person" with respect to each such REMIC
for purposes of the REMIC Provisions. If there is more than one beneficial owner
of the Class R Certificate, the "tax matters person" shall be the Person with
the greatest percentage interest in the Class R Certificate and, if there is
more than one such Person, shall be determined under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
(d) (i) It is intended that the rights of each Class of the Class A,
Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates, and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero or
a de minimis value. This provision is intended to satisfy the requirements of
Treasury Regulations Section 1.860G-2(i) for the treatment of property rights
coupled with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
any of the Class A, Class M and Class B Certificates receive payments in respect
of Excess Interest, such amounts, to the extent not derived from payments on the
Cap Contracts or the Swap Agreement, will be treated as distributed by the Upper
Tier REMIC to the Class C Certificates pro rata in payment of the amounts
specified in Section 4.04(g) and then paid to the relevant Class of Certificates
pursuant to the related interest rate cap agreement.
(ii) It is intended that the beneficial owners of the Certificates
(other than the Class P and Class C Certificates) shall be treated as having
entered into a notional principal contract with respect to the beneficial owners
of the Class C Certificates. Pursuant to each such notional principal contract,
all beneficial owners of each Class of Certificates (other than the Class P and
Class C Certificates) shall be treated as having agreed to pay, on each
Distribution Date, to the beneficial owners of the Class C Certificates an
aggregate amount equal to the excess, if any, of (i) the amount payable on such
Distribution Date on the Corresponding REMIC Regular Interest of such Class of
Certificates over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a "Class Payment Shortfall"). A Class Payment
Shortfall shall be allocated to each Class of Certificates to the extent that
interest accrued on such Class for the related Accrual Period at the
Pass-Through Rate for a Class, computed by substituting "Upper Tier REMIC Net
WAC Cap" for the Available Funds Cap set forth in the definition thereof,
exceeds the amount of interest accrued on such Certificate at the Pass-Through
Rate (without such substitution) for the related Accrual Period, and a Class
Payment Shortfall payable from principal collections shall be allocated to the
most subordinate Class of Certificates with an outstanding principal balance to
the extent of such balance.
(e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class C Interest, the uncertificated Class UT-IO Interest,
the rights to receive payments
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deemed made by the Class A, Class M and Class B Certificates in respect of
notional principal contracts described in Section 2.07(d)(ii), the Supplemental
Interest Trust which holds the Swap Agreement, the Cap Contracts, the Cap
Contract Account and the obligation of the holders of the Class C Certificates
to pay amounts in respect of Excess Interest to the holders of the Class A,
Class M and Class B Certificates shall be treated as a "grantor trust" under the
Code, for the benefit of the holders of the Class C Certificates, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class M, Class B and
Class C Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust Fund consisting
of the right to receive amounts distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the Code, for the benefit of the holders of the Class P Certificates, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class P Certificates information regarding their
allocable share of the income with respect to such grantor trust and (ii) file
or cause to be filed with the Internal Revenue Service Form 1041 (together with
any necessary attachments) and such other forms as may be applicable.
(g) The parties intend that amounts paid to the Swap Counterparty
under the Swap Agreement shall be deemed for federal income tax purposes to be
paid by the Class C Certificates first, out of funds deemed received in respect
of the Class UT-IO Interest, second, out of funds deemed received in respect of
the Uncertificated Class C Interest and third, out of funds deemed received in
respect of notional principal contracts described in Section 2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this intention. On
each Distribution Date, to the extent that amounts paid to the Swap Counterparty
are deemed paid out of funds received in respect of the Uncertificated Class C
Interest, such amounts will be treated as distributed by the Upper Tier REMIC to
the Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the Swap Counterparty pursuant to the Swap Agreement.
The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class C Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.
(h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received by the SWAP REMIC
with respect to the Mortgage Loans shall be paid to the SWAP REMIC Regular
Interests until the principal balance of all such interests have been reduced to
zero and any losses allocated to such interests have been reimbursed. Any
available funds remaining in the SWAP REMIC on a Distribution Date after
distributions to the SWAP REMIC Regular Interests shall be distributed to the
Class R Certificates on account of the Class SWR Interest. On each Distribution
Date, the Trustee shall distribute the aggregate Interest Funds (net of expenses
and payments to the Class P Certificates) with respect to each of the SWAP REMIC
Regular Interests based on the interest rates for each such SWAP REMIC Regular
Interest. On each Distribution Date, the Trustee shall distribute the aggregate
Principal Funds with respect to the Group One Mortgage Loans first to the Class
1-SW1 Interest until its principal balance is reduced to zero and then
sequentially to each of the other SWAP REMIC Regular Interests beginning with
designation "1" in ascending order of their numerical class
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designation, in equal amounts to each such class in such numerical designation,
until the principal balance of each such class is reduced to zero. All losses
with respect to the Group One Mortgage Loans shall be allocated among the SWAP
REMIC Regular Interests beginning with the designation "1" in the same manner
that principal distributions are allocated. On each Distribution Date, the
Trustee shall distribute the aggregate Principal Funds with respect to the Group
Two Mortgage Loans first to the Class 2-SW2 Interest until its principal balance
is reduced to zero and then sequentially to each of the other SWAP REMIC Regular
Interests beginning with designation "2" in ascending order of their numerical
class designation, in equal amounts to each such class in such numerical
designation, until the principal balance of each such class is reduced to zero.
All losses with respect to the Group Two Mortgage Loans shall be allocated among
the SWAP REMIC Regular Interests beginning with the designation "2" in the same
manner that principal distributions are allocated. Subsequent Recoveries with
respect to the Group One and Group Two Mortgage Loans shall be allocated in the
reverse fashion from the manner in which losses are allocated.
All payments received by the Lower Tier REMIC with respect to the SWAP
REMIC Regular Interests shall be paid to the Lower Tier REMIC Regular Interests
until the principal balance of all such interests have been reduced to zero and
any losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date,
payments and losses shall be allocated among the Lower Tier REMIC Regular
Interests so that (i) each of the Lower Tier REMIC I Marker Interests shall have
a principal balance equal to 25% of the principal balance of the Corresponding
Certificates, (ii) the Class LTIX Interest has a principal balance equal to the
excess of (x) 50% of the remaining principal balance of the Mortgage Loans over
(y) the aggregate principal balance of the Lower Tier REMIC I Marker Interests
(if necessary to reflect an increase in overcollateralization, accrued and
unpaid interest on the Class LTIX interest may be added to its principal amount
to achieve this result) and (iii) the aggregate principal amount of the Class
LTII1A Interest, Class LTII1B Interest, Class LTII2A Interest, Class LTII2B
Interest and the Class LTIIX Interest shall equal 50% of the remaining principal
balance of the Mortgage Loans. Distributions and losses allocated to the Lower
Tier REMIC Regular Interests described in clause (iii) of the preceding sentence
will be allocated among such Lower Tier REMIC Regular Interests in the following
manner: (x) such distributions shall be deemed made to such Lower Tier REMIC
Regular Interests first, so as to keep the principal balance of the each such
Lower Tier REMIC Regular Interest with "B" at the end of its designation equal
to 0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group and second, to such Lower Tier REMIC Regular
Interests with "A" at the end of its designation so that the uncertificated
principal balance of each such Lower Tier REMIC Regular Interest is equal to
0.05% of the excess of (I) the aggregate scheduled principal balance of the
Mortgage Loans in the related Mortgage Group over (II) the aggregate principal
balance of Certificate Group One, in the case of the Class LTII1A Interest, or
Certificate Group Two, in the case of the Class LTII2A Interest (except that if
0.05% of any such excess is greater than the principal amount of the related
Lower Tier REMIC II Marker Interest with "A" at the end of its designation, the
least amount of principal shall be distributed to each Lower Tier REMIC II
Marker Interest with "A" at the end of its designation such that the Lower Tier
REMIC Subordinated Balance Ratio is maintained) and finally, any remaining
distributions of principal to the Class LTIIX Interest and (y) such losses shall
be allocated among the Lower Tier REMIC Regular Interests described in clause
(iii) of the preceding sentence first, so as to keep the principal balance of
the each such Lower Tier REMIC Regular Interest with "B" at the end of its
designation equal to 0.05% of the aggregate scheduled principal balance of the
Mortgage Loans in the related Mortgage Group; second, to such Lower Tier REMIC
Regular Interests with "A" at the end of its designation so that the
uncertificated principal balance of each such Lower Tier REMIC Regular Interest
is equal to 0.05% of the excess of (I) the aggregate scheduled principal balance
of the Mortgage Loans in the related Mortgage Group over (II) the aggregate
principal balance of Certificate Group One, in the case of the Class LTII1A
Interest, or Certificate Group Two, in the case of the Class LTII2A Interest
(except that if 0.05% of any such excess is greater than the principal amount of
the related Lower Tier REMIC II Marker Interest with
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"A" at the end of its designation, the least amount of losses shall be allocated
to each Lower REMIC II Marker Interest with "A" at the end of its designation
such that the Lower Tier REMIC Subordinated Balance Ratio is maintained) and
finally, any remaining losses to the Class LTIIX Interest. Notwithstanding the
preceding two sentences, however, losses not allocated to any Class of
Certificates will not be allocated to any Lower Tier REMIC Regular Interests.
All computations with respect to the Lower Tier REMIC Regular Interests shall be
taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a
Distribution Date after distributions to the Lower Tier REMIC Regular Interests
shall be distributed to the Class R Certificates in respect of the Class LTR
Interest.
If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that, to the
greatest extent possible, (i) each of the Lower Tier REMIC I Marker Interests
has a principal balance equal to 25% of the principal balance of the
Corresponding Certificates, (ii) the Class LTIX Interest has a principal balance
equal to the excess of (x) 50% of the remaining principal balance of the
Mortgage Loans over (y) the aggregate principal balance of the Lower Tier REMIC
I Marker Interests and (iii) the aggregate principal amount of the Lower Tier
REMIC II Marker Interests and the Class LTIIX Interest shall equal 50% of the
remaining principal balance of the Mortgage Loans. Allocations in connection
with clause (iii) shall be made so that, to the greatest extent possible, (a)
the principal balance of each Lower Tier REMIC II Marker Interest with "B" at
the end of its designation equals 0.05% of the aggregate scheduled principal
balance of the Mortgage Loans in related Mortgage Group, (b) the principal
balance of each Lower Tier REMIC II Marker Interest with "A" at the end of its
designation equals 0.05% of the excess of (x) the aggregate scheduled principal
balance of the Mortgage Loans in related Mortgage Group over (y) the aggregate
principal balance of Certificate Group One in the case of the Class LTII1A
Interest, or Certificate Group Two in the case of the Class LTII2A Interest and
(c) any remaining allocations are made to the Class LTIIX Interest.
(i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the NIMs Insurer,
the Trustee and the Trust Fund against any and all Losses resulting from such
negligence; provided, however, that the Servicer shall not be liable for any
such Losses attributable to the action or inaction of the Trustee, the Depositor
or the Holder of the residual interest in such REMIC, as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of the residual
interest in such REMIC on which the Servicer has relied. The foregoing shall not
be deemed to limit or restrict the rights and remedies of the Holder of the
residual interest in such REMIC now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Servicer have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than those arising out of a
negligent performance by the Servicer of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
(j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Trustee of
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its duties and obligations set forth herein, the Trustee shall indemnify the
NIMs Insurer and the Trust Fund against any and all Losses resulting from such
negligence; provided, however, that the Trustee shall not be liable for any such
Losses attributable to the action or inaction of the Servicer, the Depositor or
the Holder of the residual interest in such REMIC, as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of the residual
interest in such REMIC on which the Trustee has relied. The foregoing shall not
be deemed to limit or restrict the rights and remedies of the Holder of the
residual interest in such REMIC now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Trustee have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than those arising out of a
negligent performance by the Trustee of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows: (a) the Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and (b) no written
information, certificate of an officer, statement furnished in writing or
written report delivered to the Depositor, the NIMs Insurer or the Trustee, any
affiliate of the Depositor, the NIMs Insurer or the Trustee and prepared by the
Servicer pursuant to this Agreement is inaccurate in any material respect,
provided, however, that the Servicer shall not be responsible for inaccurate
information provided to it by third parties.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Issuing Entity under, the Cap Contracts, an insurance and indemnity agreement
with a NIMs Insurer and any other agreement or instrument related thereto, in
each case in such form as the Depositor shall direct or shall approve, the
execution and delivery of any such agreement by the Depositor to be conclusive
evidence of its approval thereof.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service and
administer the Mortgage Loans, including without limitation, any powers of
attorney, in accordance with Accepted Servicing Practices. In connection with
such servicing and administration, the Servicer shall have full power and
authority, acting alone and/or through Subservicers as provided in Section 3.02
hereof, to do or
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cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited to,
the power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property (or the stock allocated to a dwelling unit related to a Co-op
Loan) and assumptions of the Mortgage Notes and related Mortgages (but only in
the manner provided in this Agreement), (iii) to collect any Insurance Proceeds
and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property (or the stock allocated to a dwelling unit related to a Co-op Loan)
securing any Mortgage Loan; provided that, subject to Section 6.03, the Servicer
shall not take any action that is inconsistent with or prejudices the interests
of the Trust Fund or the Certificateholders in any Mortgage Loan serviced by it
under this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law. The Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, subordinations and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, including without limitation, any
powers of attorney. Upon receipt of such documents, the Depositor and/or the
Trustee shall execute such documents and deliver them to the Servicer. For
purposes of this Section 3.01, the Trustee hereby grants to the Servicer a
limited power of attorney substantially in the form of Exhibit P to execute and
file any and all documents necessary to fulfill the obligations of the Servicer
under this Section 3.01.
The Trustee shall deliver powers of attorney in the form attached hereto as
Exhibit P to the Servicer promptly after the Closing Date and additional powers
of attorney promptly after request therefor by the Servicer. The Trustee shall
not be responsible for and the Servicer shall indemnify the Trustee for any
misuse by the Servicer of any power of attorney. Notwithstanding anything
contained herein to the contrary, the Servicer shall not without the Trustee's
written consent, hire or procure counsel to represent the Trustee without
indicating its representative capacity
In accordance with the standards of the preceding paragraph, the 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 3.06, and further as
provided in Section 3.08. To the extent that a Mortgage does not provide for
escrow payments, (i) the Servicer shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or to foreclosure as a result
of a tax lien and (ii) the Servicer shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien being imposed with respect to the Mortgage Loan, the
Servicer will, to the extent required to
78
avoid loss of the Mortgaged Property, advance or cause to be advanced funds
necessary to discharge such lien on the Mortgaged Property.
All costs incurred by the 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 Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
In the event that the Mortgage Loan Documents relating to any Mortgage Loan
contain provisions requiring the related Mortgagor to submit to binding
arbitration any disputes arising in connection with such Mortgage Loan, the
Servicer shall be entitled to waive any such provisions on behalf of the Trust
and to send written notice of such waiver to the related Mortgagor, although the
Mortgagor may still require arbitration of such disputes at its option.
The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall have at least 30 days' notice of the appointment of a
NIMs Insurer prior to being required to deliver any notices pursuant to this
Agreement to such NIMs Insurer.
The Servicer shall deliver a list of Servicing Officers to the Trustee by
the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Subservicer, when the Servicer or the Subservicer, as the case may be, believes
it is appropriate in its best judgment to register any Mortgage Loan on the MERS
System, or cause the removal from the registration of any Mortgage Loan on the
MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns; provided, however, the Trustee will
not be responsible for monitoring MERS loan activity. Any reasonable expenses
incurred in connection with the actions described in the preceding sentence or
as a result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS System, shall be subject to withdrawal by the Servicer
from the Collection Account (provided that such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
With respect to any Mortgage Loan, the Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
and
(b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and
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(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization;
provided, however, the above requirements shall not be applicable if the
Mortgage Loan is in default or, in the judgment of the Servicer, such default is
reasonably foreseeable.
In connection with any modification pursuant to this Section and to the
extent there are any unreimbursed Advances or Servicing Advances, the Servicer
shall reimburse itself for such amounts from the Collection Account.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a Subservicer, which may be an affiliate, pursuant to a subservicing
agreement (each, a "Subservicing Agreement"); provided, however, that (i) such
subservicing arrangement and the terms of the related Subservicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder, (ii) that such agreement
would not result in a withdrawal or downgrading by any Rating Agency of the
ratings of any Certificates or any of the NIM Notes evidenced by a letter to
that effect delivered by each Rating Agency to the Depositor and the NIMs
Insurer and (iii) the NIMs Insurer shall have consented to such Subservicing
Agreement, which consent shall not be unreasonably withheld. Notwithstanding the
provisions of any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and liable to the Depositor, the Trustee and
the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every Subservicing
Agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement, with the consent of
the NIMs Insurer (which consent shall not be unreasonably withheld), in the
event a successor servicer is appointed. All actions of the each Subservicer
performed pursuant to the related Subservicing Agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the NIMs Insurer copies of all
Subservicing Agreements. The Trustee shall have no obligations, duties or
liabilities with respect to a Subservicer, including, without limitation, any
obligation, duty or liability to monitor such Subservicer or to pay a
Subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and none of them is
obligated to supervise the performance of the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
Subject to Sections 6.04 and 7.02, in the event that the Servicer shall,
for any reason, no longer be the servicer hereunder (including by reason of an
Event of Default), the Trustee or its designee shall,
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within a period of time not to exceed ninety (90) days from the date of notice
of termination or resignation, thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.10 hereof or any acts or omissions of the Servicer or any predecessor 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 pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for any expenses of the Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee (subject to clause (ii) above) or its
designee, in its capacity as the successor servicer, shall immediately assume
the Servicer's obligation to make Advances and Servicing Advances). No such
termination or resignation shall affect any obligation of the Servicer to pay
amounts owed under this Agreement and to perform its duties under this Agreement
until its successor assumes all of its rights and obligations hereunder. If the
Servicer shall for any reason no longer be the servicer (including by reason of
any Event of Default), the Trustee (or any other successor servicer) may, at its
option, succeed to any rights and obligations of the Servicer under any
subservicing agreement in accordance with the terms thereof; provided, however,
that the Trustee (or any other successor servicer) shall not incur any liability
or have any obligations in its capacity as servicer under a subservicing
agreement arising prior to the date of such succession unless it expressly
elects to succeed to the rights and obligations of the Servicer thereunder; and
the Servicer shall not thereby be relieved of any liability or obligations under
any subservicing agreement arising prior to the date of such succession. To the
extent any costs or expenses, including without limitation Servicing Transfer
Costs incurred by the Trustee in connection with this Section 3.04 or Section
7.02, are not paid by the Servicer pursuant to this Agreement within 30 days of
the date of the Trustee's invoice thereof, such amounts shall be payable out of
the Certificate Account; provided that the terminated servicer shall reimburse
the Trust Fund for any such expense incurred by the Trust Fund upon receipt of a
reasonably detailed invoice evidencing such expenses. If the Trustee is
unwilling or unable to act as servicer, the Trustee shall seek to appoint a
successor servicer that is eligible in accordance with the criteria specified in
this Agreement and reasonably acceptable to the NIMs Insurer.
The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Notwithstanding anything to the contrary above, the Trustee, the Depositor
and the NIMs Insurer hereby agree that within 10 Business Days of delivery to
the Trustee by the Servicing Rights Pledgee of a letter signed by the Servicer
whereby the Servicer shall resign as Servicer under this Agreement, the
Servicing Rights Pledgee or its designee shall be appointed as successor
servicer (provided that at the time of such appointment the Servicing Rights
Pledgee, and for the purpose hereof, it is agreed that the consent and approval
of the Trustee, the Depositor and the NIMs Insurer shall be deemed to have been
given to the Servicing Rights Pledgee or its designee, and the Servicing Rights
Pledgee or its designee are hereby agreed to be acceptable to the Trustee, the
Depositor and the NIMs Insurer or such designee meets the requirements of a
successor servicer set forth in Section 7.02 of this Agreement) and the
Servicing Rights Pledgee agrees to be subject to the terms of this Agreement.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and
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provisions of any related Required Insurance Policy. Consistent with the
foregoing and subject to Section 3.01, the Servicer may in its discretion (i)
waive any late payment charge or, if applicable, any default interest charge, or
(ii) extend the due dates for payments due on a Mortgage Note for a period not
greater than 180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below; provided,
further, that the NIMs Insurer's prior written consent shall be required for any
modification, waiver or amendment after the Cut-off Date if the aggregate number
of outstanding Mortgage Loans which have been modified, waived or amended
exceeds 5% of the number of Mortgage Loans as of the Cut-Off Date. In the event
of any such arrangement pursuant to clause (ii) above, subject to Section 4.01,
the Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in no event shall
the Servicer grant any such forbearance (other than as permitted by the second
sentence of this Section) with respect to any one Mortgage Loan more than once
in any 12 month period or more than three times over the life of such Mortgage
Loan, and provided, further, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01. In connection with any modification pursuant to this
Section 3.05(a) and to the extent there are any unreimbursed Advances, the
Servicer shall reimburse itself for such amounts from the Collection Account.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) in the Servicer's
reasonable judgment as described in Section 3.01 hereof, (x) such waiver relates
to a default or a reasonably foreseeable default, (y) such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and related Mortgage Loan and (z) doing so is standard and customary in
servicing similar Mortgage Loans (including any waiver of a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related to a default or
a reasonably foreseeable default), or (iv) sufficient information is not made
available to enable it to collect the Prepayment Charge. Except as provided in
the preceding sentence, in no event will the Servicer waive a Prepayment Charge
in connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If the Servicer waives or does not
collect all or a portion of a Prepayment Charge relating to a Principal
Prepayment in full or in part due to any action or omission of the Servicer,
other than as provided above, the Servicer shall deposit the amount of such
Prepayment Charge (or such portion thereof as had been waived for deposit) into
the Collection Account for distribution in accordance with the terms of this
Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that
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enforcing the provision of the Mortgage or other instrument pursuant to which
such payment is required is prohibited by applicable law.
(d) The Servicer shall establish and maintain so long as it is acting
as servicer hereunder, on behalf of the Trustee for the benefit of the
Certificateholders, the Collection Account. The Servicer shall deposit into the
Collection Account, as soon as proper allocation can be determined, generally
within two Business Days of receipt thereof, in immediately available funds, the
following payments and collections received or made by it on and after the
Cut-Off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date and (y) any
Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied
to the restoration or repair of the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan) or released to either the Mortgagor or
the holder of a senior lien on the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan) in accordance with the Servicer's normal
servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer pursuant
to Section 3.05(f) in connection with any losses on Permitted Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Purchase Prices and Substitution Adjustment Amounts;
(ix) all Advances made by the Servicer pursuant to Section 4.01;
(x) all Prepayment Charges received;
(xi) all net monthly rental income from REO Properties required
to be deposited by the Servicer pursuant to Section 3.12; and
(xii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees,
including all late payment charges, insufficient funds charges, customary real
estate referral fees and payments in the nature of assumption fees (i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of the related
Mortgaged Property or stock allocated to a dwelling unit in the case of a Co-op
Loan), modification fees, extension fees and other similar ancillary fees and
charges (other than Prepayment Charges) if collected, and any Prepayment
Interest Excess need not be
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remitted by the Servicer. Rather, such fees and charges and similar amounts may
be retained by the Servicer as additional servicing compensation. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the Trustee, or such other institution maintaining the
Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The 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 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Servicer.
The Servicer shall give notice to the NIMs Insurer and the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. Not later than twenty days after each Distribution Date,
the Servicer shall forward to the NIMs Insurer, and upon request, to the Trustee
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.
(e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit or cause to be deposited in the Certificate Account and retain
therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;
(ii) any amount required to be deposited by the Trustee pursuant
to Section 3.05(g) in connection with any losses on Permitted Investments; and
(iii) the Optional Termination Amount received by the Trustee
pursuant to Section 9.01.
Any amounts received by the Trustee prior to 1:00 p.m. Eastern time (or
such earlier deadline for investment in the Permitted Investments designated by
the Trustee) which are required to be deposited in the Certificate Account by
the Servicer shall be invested at the written direction of the Servicer in
Permitted Investments on the Business Day on which they were received. The
foregoing requirements for remittance by the Servicer and deposit by the Trustee
into the Certificate Account shall be exclusive. In the event that the Servicer
shall remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time cause the Trustee
to withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. All funds deposited in the Certificate Account
shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section 3.08.
In no event shall the Trustee incur liability for withdrawals from the
Certificate Account at the direction of the Servicer. The Trustee shall give
notice to the NIMs Insurer and the Servicer of the location of the Certificate
Account maintained by it when established and prior to any change thereof.
(f) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account as directed by
the Servicer or the Trustee, as applicable, in writing, in Permitted
Investments, which shall mature not later than (i) in the case of the Collection
Account the Business Day preceding the related Servicer Remittance Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than the Servicer
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Remittance Date) and (ii) in the case of the Certificate Account, the Business
Day immediately preceding the first Distribution Date that follows the date of
such investment (except that if such Permitted Investment is an obligation of
the institution that maintains such Certificate Account or is otherwise
immediately available, then such Permitted Investment shall mature not later
than such Distribution Date) and, in each case, shall not be sold or disposed of
prior to its 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 amounts on deposit in the Collection Account
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it or withdrawn by it monthly as provided herein. The amount of any
losses incurred in the Collection Account in respect of any such investments
shall be deposited by the Servicer in the Collection Account out of the
Servicer's own funds immediately as realized.
(g) All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of (i) the Servicer
to the extent such income and gain (net of any losses) relates to the period
from the date of deposit into the Certificate Account to, but not including, the
Business Day prior to the related Distribution Date and (ii) the Trustee to the
extent such income and gain (net of any losses) relates to the Business Day
prior to the related Distribution Date. Any amounts in such Certificate Account
earned for the benefit of the Servicer shall be remitted by the Trustee to the
Servicer not later than the third Business Day of the month immediately
succeeding the month in which such amounts were earned. The amount of any losses
incurred in the Certificate Account in respect of any such investments shall be
deposited by the Trustee in the Certificate Account out of the Trustee's own
funds immediately as realized; provided that the Trustee shall be reimbursed by
the Servicer for any such losses which relate to the period from the date of
deposit into the Certificate Account to but not including the Business Day
immediately preceding the related Distribution Date.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes, assessments, dues or comparable items and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account to withdraw funds
deposited in error or amounts previously deposited but returned as unpaid due to
a "not sufficient funds" or other denial by the related Mortgagor's banking
institution or to clear and terminate the Escrow Account at the termination of
this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall
not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
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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 Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes (the order below not constituting
an order of priority):
(i) to pay to the Servicer (to the extent not previously paid to
or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment or recovery of interest on a Mortgage
Loan that equals the Servicing Fee for the period with respect to which such
interest payment or recovery was made or allocated, and, as additional servicing
compensation, those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer (or the Trustee as successor
servicer) for Advances made by it (or to reimburse the Advance Financing Person
for Advances made by it) with respect to the Mortgage Loans, such right of
reimbursement pursuant to this subclause (ii) being limited to amounts received
on particular Mortgage Loan(s) (including, for this purpose, Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds) that represent late
recoveries of payments of principal and/or interest on such particular Mortgage
Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made to
the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(vi) to pay the Servicer (or the Trustee as successor servicer)
any unpaid Servicing Fees and to reimburse it for any unreimbursed Servicing
Advances (to the extent that reimbursement for Servicing Advances would
constitute an "unanticipated expense" within the meaning of Treasury Regulation
Section 1.860G-1(b)(3)(ii)), the Servicer's right to reimbursement of Servicing
Advances pursuant to this subclause (vi) with respect to any Mortgage Loan being
limited to amounts received on particular Mortgage Loan(s)(including, for this
purpose, Liquidation Proceeds and purchase and repurchase proceeds) that
represent late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06;
(vii) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(viii) to reimburse the Servicer, the Trustee or the Depositor
for expenses incurred by any of them in connection with the Mortgage Loans or
the Certificates and reimbursable
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pursuant to Section 3.25 or Section 6.03 hereof provided that reimbursement
therefor would constitute "unanticipated" expenses within the meaning of
Treasury Regulation Section 1.860G1(b)(3)(ii);
(ix) to reimburse the Trustee for enforcement expenses reasonably
incurred in respect of a breach or defect giving rise to the purchase obligation
in Section 2.03 that were incurred in the Purchase Price of the Mortgage Loans
including any expenses arising out of the enforcement of the purchase
obligation; provided that any such expenses will be reimbursable under this
subclause (ix) only to the extent that such expenses would constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for herein;
(x) to withdraw any amount deposited in the Collection Account
and not required to be deposited therein;
(xi) to withdraw funds deposited in error or amounts previously
deposited but returned as unpaid due to insufficient funds or other denial by
the related Mortgagor's banking institution;
(xii) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof;
(xiii) to reimburse itself for Advances or Servicing Advances
from amounts in the Collection Account held for future distributions that were
not included in Available Funds for the preceding Distribution Date. An amount
equal to the amount withdrawn from the Collection Account pursuant to this
subclause (xiii) shall be deposited in the Collection Account by the Servicer on
the next succeeding Distribution Date on which funds are to be distributed to
Certificateholders; and
(xiv) to reimburse itself from any amounts in the Collection
Account for any prior Advances or Servicing Advances made by the Servicer that
have not otherwise been reimbursed to the Servicer at the time a Mortgage Loan
is modified.
In addition, no later than 12:00 p.m. Eastern time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds, the Principal Funds and the Trustee Fee to the
extent on deposit, and such amount shall be deposited in the Certificate
Account; provided, however, if the Trustee does not receive such Interest Funds,
Principal Funds and Trustee Fee by 2:00 p.m. Eastern time, such Interest Funds
and Principal Funds shall be deposited in the Certificate Account on the next
Business Day.
The 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.
The Servicer shall provide written notification to the Trustee on or prior
to the next succeeding Servicer Remittance Date upon making any withdrawals from
the Collection Account pursuant to subclauses (iii) and (viii) above.
In the event of any failure by the Servicer to remit to the Trustee for
deposit into the Certificate Account any amounts (including any Advance)
required to be so remitted by the Servicer on the Servicer Remittance Date, the
Servicer shall pay to the Trustee, for its own account, interest on such amounts
at the "prime rate" (as specified in the New York edition of The Wall Street
Journal) until such failure is remedied.
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Unless otherwise specified, any amounts reimbursable to the Servicer or the
Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.
(b) The Trustee shall withdraw funds from the Certificate Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and shall withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to retain pursuant to this Agreement). In addition, prior to
making such distributions to the Certificateholders, the Trustee may from time
to time make withdrawals from the Certificate Account for the following purposes
(the order below not constituting an order of priority):
(i) to withdraw any amount deposited in the Certificate Account
and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee or the Servicer in connection with any such
termination);
(iii) to reimburse the Trustee and the Custodian for any fees,
expenses and indemnification reimbursable pursuant to this Agreement, including
without limitation Sections 3.04, 6.03, 8.05 and 8.06 hereof; and
(iv) to pay to the Servicer or the Trustee, as applicable,
earnings on or investment income with respect to funds in or credited to the
Certificate Account as provided in Section 3.05(g).
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each first lien Mortgage
Loan (other than a Co-op Loan), fire and hazard insurance with extended coverage
in an amount that is at least equal to the lesser of (i) the replacement value
of the improvements that are part of such Mortgaged Property, or (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds of such policy shall be sufficient to prevent the
related Mortgagor and/or mortgagee from becoming a co-insurer or (iii) the
amount required under applicable HUD/FHA regulations. Each policy of standard
hazard insurance shall contain, or have an accompanying endorsement that
contains, a standard mortgagee clause. The Servicer shall also cause flood
insurance to be maintained on property acquired upon foreclosure or deed in lieu
of foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent and as otherwise permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located
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at the time of origination of the Mortgage Loan in a federally designated
special flood hazard area and such area is participating in the national flood
insurance program, the Servicer shall cause flood insurance to be maintained
with respect to such first lien Mortgage Loan. Such flood insurance shall be in
an amount equal to the lesser of (i) the original principal balance of the
related Mortgage Loan, (ii) the replacement value of the improvements that are
part of such Mortgaged Property, or (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the Flood Disaster Protection
Act of 1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee, for the benefit of the Certificateholders, claims
under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, but only to the extent that such enforcement will not adversely affect
or jeopardize coverage under any Required Insurance Policy; provided, however,
that the Servicer shall not exercise any such right if the due-on-sale clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law. An opinion of counsel, which shall be reimbursable as a Servicing Advance
(to the extent it is an "unanticipated expense" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii)), delivered to the Trustee and the
Depositor shall conclusively establish the reasonableness of such belief to the
extent permitted under applicable law. Notwithstanding the foregoing, the
Servicer is not required to exercise such rights with respect to a Mortgage Loan
if the Person to whom the related Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) has been conveyed or is proposed to
be conveyed satisfies the terms and conditions contained in the Mortgage Note
and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such Mortgage Note
or Mortgage as a condition to such transfer. In the event that the Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.11(b), to take or enter into an assumption and modification
agreement from or with the Person to whom such property has been or is about to
be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the Mortgage Loan shall continue to be covered (if
so covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.11(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section 3.11(a) by reason of any transfer or assumption that the
Servicer reasonably believes it is restricted by law from preventing.
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(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property (or stock allocated to a dwelling unit, in the case of Co-op
Loan) has been conveyed to a Person by a Mortgagor, and such Person is to enter
into an assumption agreement or modification agreement or supplement to the
Mortgage Note or Mortgage that requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Servicer shall prepare and deliver or
cause to be prepared and delivered to the Trustee for signature and shall
direct, in writing, the Trustee to execute the assumption agreement with the
Person to whom the Mortgaged Property (or the stock allocated to a dwelling
unit, in the case of a Co-op Loan) is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments as
are reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) to such Person. In connection with any such
assumption, no material term of the Mortgage Note (including, but not limited
to, the Mortgage Rate, the amount of the Scheduled Payment, the Maximum Rate,
the Minimum Rate, the Gross Margin, the Periodic Rate Cap, the Adjustment Date,
any prepayment penalty and any other term affecting the amount or timing of
payment on the Mortgage Loan) may be changed. The Servicer shall notify the
Trustee and the NIMs Insurer that any such substitution or assumption agreement
has been completed by forwarding to the Trustee (with a copy to the NIMs
Insurer) the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. The Servicer
shall be responsible for recording any such assumption or substitution
agreements. Any fee collected by the Servicer for entering into an assumption or
substitution of liability agreement will be retained by the Servicer as
additional servicing compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of 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. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) and if applicable, as a Non-Recoverable Servicing Advance,
as contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan), consider such risks and only take action in
accordance with Accepted Servicing Practices.
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With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer or its affiliate may
receive usual and customary real estate referral fees for real estate brokers in
connection with the listing and disposition of REO Property. The Servicer shall
prepare a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Servicer to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on the Determination Date immediately following the
month concerned. The Servicer shall perform the tax reporting and withholding
related to foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing
such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain, in accordance with applicable procedures for
obtaining an automatic extension of the grace period, more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period, in which case such property must be disposed of
prior to the end of such extension, unless the Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Trustee or the NIMs Insurer), to the effect that the
holding by the Trust Fund of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
(subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) acquired by the
Trust Fund shall be held, 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 (or stock allocated to a dwelling unit, in the case of a Co-op Loan) to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC provided for
herein to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes. The
Servicer shall have no liability for any losses resulting from a foreclosure on
a second lien Mortgage Loan, if any, in connection with the foreclosure of the
related first lien mortgage loan that is not a Mortgage Loan if the Servicer
does not receive notice of such foreclosure action.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties
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acquired through foreclosure or other judicial proceeding, net of reimbursement
to the Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of Co-op Loan), shall be applied for the purpose of
the Trust Fund to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such net income shall be deemed, for all purposes
and as between the parties to this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited into
the Collection Account. To the extent that any such net income received during a
Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting from
a partial collection of Liquidation Proceeds and any net income from an REO
Property, will be applied as between the parties in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and unpaid Servicing Fees, pursuant to Section 3.08(a)(vi) or
this Section 3.12; second, to reimburse the Servicer for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to any
Prepayment Charges and then to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the applicable Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 90 days or more Delinquent or REO
Property for which the Servicer has accepted a deed-in-lieu of foreclosure at a
price equal to the Purchase Price. The Purchase Price for any Mortgage Loan or
REO Property purchased hereunder shall be delivered to the Trustee for deposit
to the Certificate Account and the Trustee or the Custodian, upon receipt of
such confirmation of deposit and a Request for Release from the Servicer in the
form of Exhibit I hereto, shall release or cause to be released to the Servicer
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the Servicer any
Mortgage Loan or REO Property released pursuant hereto and the Servicer shall
succeed to all the Trustee's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The Servicer shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto. The Servicer shall
not use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders.
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (unless the Servicer, after making a
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reasonable estimate of the expected recovery, determines that foreclosure
proceedings or other liquidation of the related Mortgaged Property would yield a
net recovery), (iii) take a deed in lieu of foreclosure, (iv) accept a short
sale or short refinance; (v) arrange for a repayment plan or refinancing, or
(vi) agree to a modification of such Mortgage Loan.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on all such Mortgage Loans.
In the event that the Servicer (or an affiliate of the Servicer) is the
owner of more than 50% of the Class of Certificates which is then currently in a
first loss position and such party is deemed to be the "Primary Beneficiary" as
defined in FIN 40, the provisions of the preceding paragraph shall not apply and
the Servicer (or an affiliate of the Servicer), in its sole discretion, shall
have the right to elect to purchase for its own account from the Trust Fund any
Mortgage Loan that is 120 days or more Delinquent or REO Property for which the
Servicer has accepted a deed-in-lieu of foreclosure, during the period
commencing on the first day of the calendar quarter succeeding the calendar
quarter in which the Initial Delinquency Date (as defined below) occurred with
respect to such Mortgage Loan and ending on the last Business Day of such
calendar quarter. If the Servicer (or an affiliate of the Servicer) does not
exercise its purchase right with respect to a Mortgage Loan during the period
specified in the preceding sentence, such Mortgage Loan shall thereafter again
become eligible for purchase pursuant to the preceding sentence only after the
Mortgage Loan ceases to be 120 days or more Delinquent and thereafter becomes
120 days Delinquent again. The "Initial Delinquency Date" of a Mortgage Loan
shall mean the date on which the Mortgage Loan first became 120 days Delinquent.
Prior to repurchase pursuant to this Section 3.12, the Servicer shall be
required to continue to make monthly advances pursuant to Section 4.01. The
Servicer shall not use any procedure in selecting Mortgage Loans to be
repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase any Mortgage Loan or REO
Property pursuant to this paragraph at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan or REO Property purchased hereunder shall
be delivered to the Trustee for deposit in the Certificate Account. The Trustee,
upon receipt of notice of such deposit and a Request for Release from the
Servicer in the form of Exhibit I hereto, shall release or cause to be released
to the Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the Servicer, in each case
without recourse, representation or warranty, as shall be necessary to vest in
the Servicer any Mortgage Loan or REO Property released pursuant hereto and the
Servicer shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan and all security and documents related thereto. The
provisions in this paragraph shall only apply if Xxxxxx Loan Servicing LP is the
servicer. The Trustee shall not be responsible for any independent calculations
or other determinations in connection with the application of the provisions set
forth in this paragraph.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its custodian by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of two copies of such request, the Trustee or its
custodian shall promptly release the related Mortgage File to the Servicer, and
the Servicer is authorized to cause the removal from the registration on the
MERS System of any such Mortgage if applicable, and the Servicer, on behalf of
the Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument
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of satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to
the extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses" within the meaning of Treasury
Regulations Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its custodian shall,
upon delivery to the Trustee or its custodian of a Request for Release in the
form of Exhibit I signed by a Servicing Officer, release the Mortgage File to
the Servicer. Subject to the further limitations set forth below, the Servicer
shall cause the Mortgage File or documents so released to be returned to the
Trustee or its custodian when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the Collection Account.
Each Request for Release may be delivered to the Trustee or its custodian
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its custodian shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its custodian to release such
Mortgage Files, provided the Trustee or its custodian has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its custodian
complies with its duties and obligations under the agreement. If the Trustee or
its custodian is unable to release the Mortgage Files within the period
previously specified, the Trustee or its custodian shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its custodian's negligent failure
to release the related Mortgage File or the Trustee or its custodian's negligent
failure to execute and release documents in a timely manner, the Trustee or its
custodian, shall be liable for such penalties or damages respectively caused by
it.
On each day that the Servicer remits to the Trustee or its custodian
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its custodian a summary of the total number
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii).
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) as authorized by this Agreement, the Servicer may deliver
or cause to be delivered to the Trustee or its custodian, for signature, as
appropriate or on behalf of the Trustee, execute 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. Notwithstanding the foregoing, the
Servicer shall cause possession of any Mortgage File or of the documents therein
that shall have been released by the Trustee or its custodian to be returned to
the Trustee promptly after possession thereof shall have been released by the
Trustee or its custodian unless (i) the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Collection Account, and the Servicer shall have delivered to the Trustee or
its custodian a Request for Release in the form of Exhibit I or (ii) the
Mortgage File or document shall have been delivered to an attorney or to a
public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) and the Servicer shall have delivered
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to the Trustee or its custodian an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicer 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, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trust Fund, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Certificate Account or in 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 set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property (or stock allocated to
a dwelling unit, in the case of Co-op Loan)), modification fees, customary real
estate referral fees, extension fees and similar fees payable by the Mortgagor,
any Prepayment Interest Excess and all income and gain net of any losses
realized from Permitted Investments in the Collection Account shall be retained
by the Servicer to the extent not required to be deposited in the Collection
Account pursuant to Sections 3.05 or 3.12(a) hereof. In addition, the Servicer
shall be entitled to income and gain from amounts on deposit in the Certificate
Account during the period from the Servicer Remittance date to but not including
the Business Day immediately preceding the related Distribution Date as
described in Section 3.05(g). The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance, as required by Section 3.10 hereof
and maintenance of the other forms of insurance coverage required by Section
3.10 hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement. In no event shall the Trustee be liable
for any Servicing Fee or for any differential between the Servicing Fee and the
amount necessary to induce a successor servicer to act as successor servicer
under this Agreement.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the 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
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upon reasonable and prior written request and during normal business hours at
the offices of the Servicer designated by it provided, that the Servicer shall
be entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Servicer in providing such reports and access. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.17. Annual Statement as to Compliance.
(a) The Servicer and the Trustee, each at its own expense, will
deliver, and the Servicer shall use its reasonable efforts to cause any
Subservicer engaged by the Servicer to deliver, to the Trustee and the
Depositor, not later than March 1 of each year, commencing in 2007, an Officer's
Certificate, in the form attached hereto as Exhibit T-4, stating, as to each
signer thereof, that (i) a review of the activities of such party during such
preceding calendar year (or such shorter period in the case of the first such
report) and of performance of such party under this Agreement or such other
applicable servicing agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, such
party has fulfilled all its obligations under this Agreement or such other
applicable servicing agreement in all material respects throughout such year or
a portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.
(b) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and its receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
SECTION 3.18. Reports on Assessment of Compliance and Attestation.
(a) The Servicer and the Trustee, each at its own expense, shall
furnish, by March 15 of each year, commencing in March 2007, and each of the
preceding parties, as applicable, shall cause any Subservicer or Subcontractor
(with respect to any calendar year during which an annual report on Form 10-K is
required to be filed pursuant to Section 3.27 on behalf of the Issuing Entity)
engaged by it to furnish to the Depositor and the Trustee an officer's
certification and assessment of its compliance with the Relevant Servicing
Criteria during the preceding calendar year as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB (the "Assessment of
Compliance"), which assessment shall contain (A) a statement by such party of
its responsibility for assessing compliance with the Relevant Servicing Criteria
applicable to it, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria applicable to
it, (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 3.27, including, if there has been any material
instance of noncompliance with the relevant Servicing Criteria applicable to it,
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 applicable to it as of and for such period. Such Assessment
of Compliance shall be substantially in the form of Exhibit T-1 hereto. The
parties acknowledge and agree that the items indicated as being subject to
assessment by each such party on Exhibit T-2 hereto are the items to be assessed
by such party as of the Closing Date and that any changes to such allocation of
assessment responsibilities will be made by mutual agreement of the parties. Any
such changes will not require an amendment of this Agreement.
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In the event the Servicer or the Trustee is terminated or resigns pursuant
to the terms of this Agreement, such party shall provide, and each such party
shall cause any Subcontractor engaged by it to provide, and the Servicer shall
use its reasonable efforts to cause any Subservicer that resigns or is
terminated under any applicable servicing agreement to provide, an annual
assessment of compliance pursuant to this Section 3.18, coupled with an
attestation as required in this Section 3.18 with respect to the period of time
that the Servicer or the Trustee was subject to this Agreement or the period of
time that the Subservicer was subject to such other servicing agreement.
(b) The Servicer and the Trustee, each at its own expense, shall
cause, and each of the preceding parties, as applicable, shall cause any
Subservicer or Subcontractor engaged by it to cause, a nationally or regionally
recognized firm of independent registered public accountants (who may also
render other services to the Servicer, the Trustee, the Sponsor or any affiliate
thereof), which is a member of the American Institute of Certified Public
Accountants to furnish, by March 15 of each year, commencing in March 2007, a
report (the "Accountants Attestation") to the Trustee, the Servicer and the
Depositor to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the PCAOB, it is expressing an
opinion as to whether such party's compliance with the Relevant Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party's assessment of compliance with the
Relevant Servicing Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language. Such Accountant's
Attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act. Notwithstanding
anything contained herein to the contrary, the statements and attestations
required under this Section 3.18 with respect to any Subservicer or
Subcontractor shall not be required to be delivered with respect to any year in
which an annual report on Form 10-K for the Issuing Entity is not required to be
filed pursuant to the Exchange Act.
Promptly after receipt of such report from the Servicer and the
Trustee, and any Subservicer or Subcontractor engaged by the parties, the
Trustee shall confirm that each assessment submitted pursuant to Section 3.18(a)
is coupled with an attestation meeting the requirements of this Section 3.18(b)
and notify the Depositor of any exceptions.
(c) The Servicer agrees to indemnify and hold harmless each of the
Depositor, the Trustee and each Person, if any, who "controls" the Depositor or
the Trustee 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 actually sustains
out of third party claims based on (i) the failure of the Servicer or any
related Subservicer or Subcontractor to deliver or cause to be delivered when
required any Assessment of Compliance or Accountant's Attestation required of it
pursuant to this Section 3.18, as applicable, or (ii) any material misstatement
contained in any Assessment of Compliance provided on its behalf pursuant to
Section 3.18, as applicable.
(d) [Reserved].
(e) Copies of such Assessments of Compliance and Accountant's
Attestations shall be available on the Trustee's website xxx.xxxxxxxx.xxx to any
Certificateholder, provided such statement is delivered to the Trustee. The
initial Assessments of Compliance and Accountant's Attestations required
pursuant to this Section 3.18 shall be delivered to the Trustee and the
Depositor, as applicable, by each party no later than March 15, 2007.
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SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this Agreement shall
exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM notes.
SECTION 3.20. [RESERVED]
SECTION 3.21. [RESERVED]
SECTION 3.22. [RESERVED]
SECTION 3.23. Prepayment Charge Reporting Requirements.
On or before the 18th of each month (or if such date is not a Business Day,
the next succeeding Business Day), the Servicer shall provide to the Depositor
and the Trustee the following information with regard to each Mortgage Loan that
has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) Prepayment Charge amount due;
(v) Prepayment Charge amount collected; and
(vi) reason why full Prepayment Charge amount was not collected, if
applicable.
SECTION 3.24. Information to the Trustee.
On or before the 18th of each month (or if such date is not a Business Day,
the next succeeding Business Day), the Servicer shall furnish to the Trustee a
delinquency report, a monthly remittance advice and a realized loss report (each
in such form or forms as the Trustee and the Servicer may from time to time
agree) for the period ending on the last Business Day of the preceding month,
and not later than three days after the tenth calendar day of each month, the
Servicer shall furnish to the Trustee such reports for the applicable Prepayment
Period with respect to prepayments, in the format mutually agreed upon between
the Servicer and the Trustee, including but not limited to information
sufficient to allow the Trustee to prepare the Monthly Statement described in
Section 4.05(a).
SECTION 3.25. Indemnification.
The Servicer shall indemnify the Sponsor, the Issuing Entity, the Trustee
(in its individual capacity and in its capacity as trustee), the Depositor, the
NIMs Insurer and their officers, directors, employees and agents and hold each
of them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Servicer
immediately shall notify the Sponsor, the Trustee, the NIMs Insurer and the
Depositor or any other relevant party if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the indemnified party, which consent shall
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not be unreasonably withheld or delayed) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Servicer shall provide the
Depositor, the Trustee and the NIMs Insurer with a written report of all
expenses and advances incurred by the Servicer pursuant to this Section 3.25,
and the Servicer shall promptly reimburse itself from the assets of the Trust
Fund in the Collection Account for all amounts advanced by it pursuant to the
preceding sentence except when and to the extent a determination has been made
that the claim in any way relates to the failure of the Servicer to service and
administer the Mortgage Loans in material compliance with the terms of this
Agreement or the gross negligence, bad faith or willful misconduct of the
Servicer. The provisions of this paragraph shall survive the termination of this
Agreement and the payment of the outstanding Certificates.
SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
hereby covenants that neither it nor any Affiliate of the Servicer will directly
solicit any Mortgagor hereunder to refinance the related Mortgage Loan.
Notwithstanding the foregoing, the Servicer and its Affiliates shall be
permitted to solicit a Mortgagor if the Servicer or such Affiliate has received
a request for verification of mortgage, a request or demand for payoff, a
Mortgagor initiated written or verbal communication indicating a desire to
prepay or refinance the related Mortgage Loan, or the Mortgagor initiates a
title search, or if the Mortgagor receives marketing materials which are
generally disseminated.
SECTION 3.27. Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
directed by the Depositor and to the extent it receives the Form 8-K Disclosure
Information described below, the Trustee shall prepare and file on behalf of the
Issuing Entity a Form 8-K, as required by the Exchange Act, provided that the
Depositor shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K (other than the initial
Form 8-K) ("Form 8-K Disclosure Information") shall, pursuant to the paragraph
immediately below, be reported by the parties set forth on Exhibit X and
directed and approved by the Depositor, and the Trustee will have no duty or
liability for any failure hereunder to determine or prepare any Form 8-K
Disclosure Information absent such reporting, direction and approval.
(b) For so long as the Issuing entity is subject to the reporting
requirements of the Exchange Act, no later than close of business (Eastern time)
on the second Business Day after the occurrence of a Reportable Event (i) the
parties listed on Exhibit X hereto shall be required to provide to the Trustee
and the Depositor, to the extent known, by a responsible officer thereof, in
XXXXX-compatible format, or in such other format as otherwise agreed upon by the
Trustee and the Depositor and such party, the form and substance of the Form 8-K
Disclosure Information described on Exhibit X applicable to such party, (ii) the
parties listed on Exhibit X hereto shall include with such Additional Form 8-K
Disclosure, an Additional Disclosure Notification in the form attached hereto as
Exhibit Z-1, and (iii) the Depositor, by the end of business Eastern time on the
second day following such Reportable Event, shall approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Form 8-K
Disclosure Information on Form 8-K. The Trustee has no duty under this Agreement
to monitor or enforce the performance by the parties listed on Exhibit X of
their duties under this paragraph or proactively solicit or procure from such
parties any Form 8-K Disclosure Information. The Depositor will be responsible
for any reasonable fees and expenses assessed or incurred by the Trustee
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in connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
(c) After preparing the Form 8-K, the Trustee shall forward
electronically, no later than close of business (Eastern time) on the third
Business Day after the Reportable Event (but in no event earlier than 24 hours
after having received the Form 8-K Disclosure Information pursuant to the
immediately preceding paragraph), a copy of the Form 8-K to the Depositor and
the Servicer for review. No later than the close of business on the third
Business Day after the Reportable Event, the Depositor shall notify the Trustee
and the Servicer in writing (which notice may be delivered electronically) of
any changes to or approval of such Form 8-K. No later than Noon Eastern time on
the fourth Business Day after the Reportable Event, a senior officer of the
Servicer shall sign the Form 8-K and return an electronic or fax copy of such
signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Trustee will follow the procedures set
forth in Section 3.27(n).
(d) Promptly (but no later than one Business Day) after filing with
the Securities and Exchange Commission, the Trustee will make available on its
internet website a final executed copy of each Form 8-K prepared by the Trustee.
The signing party at the Servicer can be contacted at Xxxxxx Loan Servicing LP,
0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 Attention: Xxxxxx XxXxxxx. The
parties to this Agreement acknowledge that the performance by the Trustee of its
duties under this Section 3.27 related to the timely preparation, arrangement
for execution and filing of Form 8-K is contingent upon the other parties hereto
strictly observing all applicable deadlines in the performance of their duties
under this Section 3.27. The Trustee shall not have any liability for any loss,
expense, damage or claim arising out of or with respect to any failure to
properly prepare, arrange for preparation and/or timely file such Form 8-K,
where such failure results from the Trustee's inability or failure to receive,
on a timely basis, any information from any other party hereto needed to
prepare, arrange for execution or file such Form 8-K.
(e) Within fifteen days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Trustee shall, on behalf of
the Issuing Entity and in accordance with industry standards, prepare and file
with the Securities and Exchange Commission via the Electronic Data Gathering
and Retrieval System (XXXXX), a Form 10-D with (1) a copy of the report to the
Certificateholders for such Distribution Date as an exhibit thereto. Any
necessary disclosure in addition to the Monthly Statement that is required to be
included on Form 10-D ("Additional Form 10-D Disclosure") shall, pursuant to the
paragraph immediately below, be reported by the parties set forth on Exhibit Y
to the Depositor and the Trustee and directed and approved by the Depositor, and
the Trustee will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure absent such reporting,
direction and approval.
(f) As set forth in Exhibit X hereto, for so long as the Issuing
Entity is subject to the reporting requirements of the Exchange Act, within five
calendar days after the related Distribution Date (i) each party listed on
Exhibit Y hereto shall be required to provide to the Depositor and the Trustee,
to the extent known, in XXXXX-compatible format, or in such other format as
otherwise agreed upon by the Trustee and the Depositor and such party, the form
and substance of any Additional Form 10-D Disclosure described on Exhibit Y
applicable to such party, (ii) the parties listed on Exhibit Y hereto shall
include with such Additional Form 10-D Disclosure, an Additional Disclosure
Notification in the form attached hereto as Exhibit Z-1 and (ii) the Depositor
will approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure. The Trustee has no duty under
this Agreement to monitor or enforce the performance by the parties (other than
the Trustee) listed on Exhibit Y of their duties under this paragraph or
proactively solicit or procure from such parties any Additional Form 10-D
Disclosure Information. The Depositor will be responsible for
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any reasonable fees and expenses incurred by the Trustee in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph.
(g) After preparing the Form 10-D at the direction of the Depositor,
the Trustee will forward electronically a copy of the Form 10-D to the Depositor
for review and to the Servicer for execution. Within two Business Days after
receipt of such copy, but no later than the 12th calendar day after the
Distribution Date, the Depositor shall notify the Trustee and the Servicer in
writing (which may be furnished electronically) of any changes to or approval of
such Form 10-D and a duly authorized representative of the Servicer shall sign
the Form 10-D and return an electronic or fax copy of such Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Trustee and the
Trustee shall file such Form 10-D. In the absence of receipt of any written
changes or approval, the Trustee shall be entitled to assume that such Form 10-D
is in final form and the Trustee may proceed with the filing of the Form 10-D.
If a Form 10-D cannot be filed on time or if a previously filed Form 10-D needs
to be amended, the Trustee will follow the procedures set forth in Section
3.27(n). Promptly (but not later than one Business Day) after filing with the
Securities and Exchange Commission, the Trustee will make available on its
internet website a final executed copy of each Form 10-D prepared and filed by
the Trustee. The signing party at the Servicer can be contacted at Xxxxxx Loan
Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 Attention: Xxxxxx
XxXxxxx. The parties to this Agreement acknowledge that the performance by the
Trustee of its respective duties under this Section 3.27 related to the timely
preparation, arrangement for execution and filing of Form 10-D is contingent
upon the other parties hereto strictly observing all applicable deadlines in the
performance of their duties under this Section 3.27. The Trustee will not have
any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, arrange for execution and/or timely
file such Form 10-D resulting from the Trustee's inability or failure to receive
any information needed to prepare, arrange for execution or file such Form 10-D
on a timely basis.
(h) On or prior to the 90th calendar day after the end of the fiscal
year for the Issuing Entity or such earlier date as may be required by the
Exchange Act (the "10-K Filing Deadline") (it being understood that the fiscal
year for the Issuing Entity ends on December 31st of each year) commencing in
March 2007, the Trustee shall, on behalf of the Issuing Entity and in accordance
with industry standards, prepare and file with the Securities and Exchange
Commission via XXXXX a Form 10-K with respect to the Issuing Entity. Such Form
10-K shall include the following items, in each case, as applicable, to the
extent they have been delivered to the Trustee within the applicable time frames
set forth in this Agreement, (i) an annual compliance statement for the Trustee,
the Servicer and each Subservicer, as described in Section 3.17 of the
Agreement, (ii)(A) the annual reports on assessment of compliance with servicing
criteria for the Trustee, the Servicer and each Subservicer and Subcontractor
(unless the Depositor has determined that such compliance statement is not
required by Regulation AB), as described in Section 3.18 of the Agreement, and
(B) if any such party's report on assessment of compliance with servicing
criteria described in Section 3.18 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
report on assessment of compliance with servicing criteria described in Section
3.18 of the Agreement is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report
is not included, (iii)(A) the registered public accounting firm attestation
report for the Trustee, the Servicer and each Subservicer and Subcontractor (if
applicable), as described in Section 3.18 of this Agreement, and (B) if any
registered public accounting firm attestation report described under Section
3.18 of this Agreement identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a Xxxxxxxx-Xxxxx Certification in the form
attached hereto as Exhibit T-3, executed by the senior officer in charge of
securitizations of the Servicer. Any disclosure or information in addition to
(i) through (iv) above that is required to be included on Form 10-K
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("Additional Form 10-K Disclosure") shall be reported by the parties as set
forth in Exhibit Z to the Depositor and the Trustee and directed and approved by
the Depositor pursuant to the following paragraph and the Trustee will have no
duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-K Disclosure absent such reporting, direction or approval.
(i) As set forth in Exhibit Z hereto, no later than March 1 of each
year that the Issuing Entity is subject to the Exchange Act reporting
requirements, commencing in March 2007, (i) the parties listed on Exhibit Z
hereto shall be required to provide to the Trustee and the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible format, or in
such other format as otherwise agreed upon by the Trustee and the Depositor and
such party, the form and substance of the Additional Form 10-K Disclosure
described on Exhibit Z applicable to such party, (ii) the parties listed on
Exhibit Z hereto shall include with such Additional Form 10-K Disclosure, an
Additional Disclosure Notification in the form attached hereto as Exhibit Z-1
and (iii) the Depositor will approve, as to form and substance, or disapprove,
as the case may be, the inclusion of the Additional Form 10-K Disclosure on Form
10-K. The Trustee has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Z of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-K Disclosure Information. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Trustee in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(j) After preparing the Form 10-K, the Trustee shall forward
electronically a copy of the Form 10-K to the Depositor for review and to the
Servicer for execution. Within three Business Days after receipt of such copy,
but no later than March 25th, the Depositor shall notify the Trustee and the
Servicer in writing (which may be furnished electronically) of any changes to or
approval of such Form 10-K. No later than the end of business Eastern time on
the fourth Business Day after receipt thereof, a senior officer of the Servicer
shall sign the Form 10-K and return an electronic or fax copy of such signed
Form 10-K (with an original executed hard copy to follow by overnight mail) to
the Trustee, and the Trustee shall file such Form 10-K. In the absence of
receipt of any written changes or approval, the Trustee shall be entitled to
assume that such Form 10-K is in final form and the Trustee may proceed with the
filing of the Form 10-K. If a Form 10-K cannot be filed on time or if a
previously filed Form 10-K needs to be amended, the Trustee will follow the
procedures set forth in Section 3.27(n). Promptly (but no later than one
Business Day) after filing with the Securities and Exchange Commission, the
Trustee will, pursuant to the Agreement, make available on its internet website
a final executed copy of each Form 10-K prepared and filed by the Trustee. The
signing party at the Servicer can be contacted at Xxxxxx Loan Servicing LP, 0000
Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 Attention: Xxxxxx XxXxxxx. The parties
to this Agreement acknowledge that the performance by the Trustee of its duties
under this Section 3.27 related to the timely preparation, arrangement for
execution and filing of Form 10-K is contingent upon such parties (and any
Subservicer or Subcontractor) strictly observing all applicable deadlines in the
performance of their duties under this Section 3.27, Section 3.17 and Section
3.18. The Trustee shall have no liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, arrange for
execution and/or timely file such Form 10-K resulting from the Trustee's
inability or failure to receive any information needed to prepare, arrange for
execution or file such Form 10-K on a timely basis.
(k) Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification
required to be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The
Trustee shall provide, and the Servicer and the Trustee shall cause any
Subcontractor engaged by it to provide, and the Servicer shall use its
reasonable efforts to cause any Subservicer to provide, to the Person who signs
the Xxxxxxxx-Xxxxx Certification (the "Certifying Person"), by March 1 of each
year in which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (each, a "Back-Up Certification"), in the form attached hereto as
Exhibit T-5 in
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the case of the Trustee, upon which the Certifying Person, the entity for which
the Certifying Person acts as an officer, and such entity's officers, directors
and Affiliates (collectively with the Certifying Person, "Certification
Parties") can reasonably rely. The senior officer of the Servicer in charge of
the servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted at Xxxxxx
Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 Attention:
Xxxxxx XxXxxxx. In the event the Servicer or the Trustee is terminated or
resigns pursuant to the terms of this Agreement, the Trustee shall provide, and
each such party shall cause any Subcontractor engaged by it to provide, and the
Servicer shall use its reasonable efforts to cause any Subservicer to provide, a
Back-Up Certification to the Certifying Person pursuant to this Section 3.27(k)
with respect to the period of time that the Servicer or the Trustee was subject
to this Agreement. The Servicer or the Subservicer will be entitled to rely upon
a certification of any Subcontractor not affiliated with the Servicer or
Subservicer.
(l) The Servicer agrees to furnish promptly to the Trustee, from time
to time upon reasonable request, such further information and reports within its
control related to this Agreement and the Mortgage Loans as the Depositor
reasonably deems appropriate to prepare and file all necessary reports with the
Securities and Exchange Commission. The Trustee shall have no responsibility to
file any items with the Securities and Exchange Commission other than those
specified in this section and the Servicer shall execute any and all Form 10-Ds,
8-Ks and 10-Ks required hereunder.
(m) On or prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall prepare and file a Form
15 Suspension Notification relating to the automatic suspension of reporting in
respect of the Issuing Entity under the Exchange Act.
(n) In the event that the Trustee is unable to timely file with the
Securities and Exchange Commission all or any required portion of any Form 8-K,
10-D or 10-K required to be filed by this Agreement because required disclosure
information was either not delivered to it or delivered to it after the delivery
deadlines set forth in this Agreement or for any other reason, the Trustee will
promptly notify the Depositor and the Servicer of such inability to make a
timely filing with the Securities and Exchange Commission. In the case of Form
10-D and 10-K, the Depositor and Trustee will cooperate to prepare and file a
Form 12b-25 and a 10-DA and 10KA, as applicable, pursuant to Rule 12b-25 of the
Exchange Act. In the case of Form 8-K, the Trustee will, upon receipt of all
required Form 8-K Disclosure Information and upon the approval and direction of
the Depositor, include such disclosure information on the next succeeding Form
10-D to be filed for the Issuing Entity. In the event that any previously filed
Form 8-K, 10-D or 10-K needs to be amended, the Trustee will notify the
Depositor and the Servicer, and such parties agree to cooperate to prepare any
necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to
Form 8-K, 10-D or 10-K shall be signed by a senior officer of the Servicer upon
receipt by the Servicer of notice that any such forms are acceptable to the
Depositor. The Depositor and Servicer acknowledge that the performance by the
Trustee of its duties under this Section 3.27 related to the timely preparation,
arrangement for execution and filing of Form 15, a Form 12b-25 or any amendment
to Form 8-K, 10-D or 10-K is contingent upon the Servicer and the Depositor
performing their duties under this Section. The Trustee shall have no liability
for any loss, expense, damage or claim arising out of or with respect to any
failure to properly prepare, arrange for execution and/or timely file any such
Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such
failure results from the Trustee's inability or failure to receive, on a timely
basis, any information from any other party hereto needed to prepare, arrange
for execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K,
10-D or 10-K.
(o) The obligations set forth in paragraphs (a) through (n) of this
Section 3.27 shall only apply with respect to periods for which reports are
required to be filed with respect to the Issuing Entity under the Exchange Act.
On or prior to January 30 of the first year in which the Trustee is able to
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do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Issuing Entity. As of the beginning of any
fiscal year after the filing of a Form 15 Suspension Notification, if the number
of Certificateholders of record exceeds the number set forth in Section 15(d) of
the Exchange Act or the regulations promulgated pursuant thereto which would
cause the Issuing Entity to again become subject to the reporting requirements
of the Exchange Act, the Trustee, solely at the Depositor's prior written
direction and expense, shall recommence preparing and filing reports on Form
10-K, 8-K and 10-D as required pursuant to this Section 3.27 and the parties
hereto shall again have the obligations set forth in this Section; provided that
if the Trustee re-commences the preparing and filing of Exchange Act reports, it
may, as soon as permitted by the Exchange Act, file another Form 15 Suspension
Notification.
(p) The Trustee shall indemnify and hold harmless the Depositor, the
Servicer and their respective officers, directors, agents and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Trustee or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.18 and 3.27, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Trustee is responsible for providing information or calculating amounts included
in such information), the failure of the Trustee to deliver when required any
Assessment of Compliance or Accountant's Attestation required of it pursuant to
Section 3.18, or any material misstatement or omission contained in any
Assessment of Compliance or Accountant's Attestation provided on its behalf
pursuant to Section 3.18, or the negligence, bad faith or willful misconduct of
the Trustee in connection therewith. If the indemnification provided for herein
is unavailable or insufficient to hold harmless the indemnified parties, then
the Trustee agrees that it shall contribute to the amount paid or payable by the
indemnified parties as a result of the losses, claims, damages or liabilities of
the indemnified parties in such proportion as is appropriate to reflect the
relative fault of the Trustee on the one hand and of the indemnified parties on
the other.
(q) The Servicer shall indemnify and hold harmless the Trustee and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Servicer's
failure to sign and deliver either the certification or the Form 10-K within the
time frame provided in this Section 3.27, other than any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Trustee's
breach of its obligations under this Agreement. If the indemnification provided
for herein is unavailable or insufficient to hold harmless the Trustee and its
officers, directors and Affiliates, then the Servicer shall contribute to the
amount paid or payable by the Trustee, its officers, directors or Affiliates as
a result of the losses, claims, damages or liabilities of the Trustee, its
officers, directors or Affiliates in such proportion as is appropriate to
reflect the relative fault of the Trustee and its officers, directors and
Affiliate on the one hand and the Servicer on the other.
(r) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or regulations with
respect to Regulation AB or otherwise, or if other changes in applicable law
occur, that would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section 3.27, to be
conducted differently than as described, the Depositor, the Servicer, and the
Trustee will reasonably cooperate to amend the provisions of this Section 3.27
in order to comply with such amended reporting requirements and such amendment
of this Section 3.27. Any such amendment shall be made in accordance with the
first paragraph of Section 10.01 without the consent of the Certificateholders
and without the requirement to deliver notice in writing to the Depositor, the
Servicer and the Trustee from the Rating Agencies that such action will not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency. Such Amendment may
result in the reduction
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of the reports filed by the Trustee on behalf of the Trust under the Exchange
Act. Notwithstanding the foregoing, none of the Depositor, the Servicer and the
Trustee shall be obligated to enter into any amendment pursuant to this Section
3.27 that adversely affects its obligations and immunities under this Agreement.
(s) The Depositor, the Servicer and the Trustee agree to use their
good faith efforts to cooperate in complying with the requirements of this
Section 3.27.
(t) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor and the Servicer a copy of any
such executed report, statement or information.
(u) Any notice required to be delivered by the Trustee to the
Depositor or the Servicer pursuant to this Section 3.27, the Trustee may deliver
such notice, notwithstanding any contrary provision in Section 10.05 (i) to the
Depositor via facsimile to (000) 000-0000, via email to xxxx_xxxx@xx.xxx or
telephonically by calling Xxxx Xxxx at (000) 000-0000, and (ii) to the Servicer
via facsimile to (000) 000-0000, via email to xxxxxxxxx.xxxx@xxxxxx.x-xxxx.xxx
or telephonically by calling Xxxxxxxxx Xxxx at (000)000-0000.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 1:00 p.m. Eastern time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders, funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the NIMs Insurer and the
Trustee an Officer's Certificate setting forth the basis for such determination.
The Servicer may, in its sole discretion, make an Advance with respect to the
principal portion of the final Scheduled Payment on a Balloon Loan, but the
Servicer is under no obligation to do so; provided, however, that nothing in
this sentence shall affect the Servicer's obligation under this Section 4.01 to
advance the interest portion of the final Scheduled Payment with respect to a
Balloon Loan as if such Balloon Loan were a fully amortizing Mortgage Loan. If a
Mortgagor does not pay its final Scheduled Payment on a Balloon Loan when due,
the Servicer shall Advance (unless it determines in its good faith judgment that
such amounts would constitute a Non-Recoverable Advance) a full month of
interest (net of the Servicing Fee) on the Stated Principal Balance thereof each
month until its Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to
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time in the Collection Account to the extent such amounts are not then required
to be distributed. Any funds so applied and transferred pursuant to the previous
two sentences shall be replaced by the Servicer by deposit in the Collection
Account no later than the close of business on the Servicer Advance Date on
which such funds are required to be distributed pursuant to this Agreement. The
Servicer shall be entitled to be reimbursed from the Collection Account for all
Advances of its own funds made pursuant to this Section as provided in Section
3.08. The obligation to make Advances with respect to any Mortgage Loan shall
continue until the earlier of (i) the date such Mortgage Loan is paid in full,
(ii) the date the related Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) or related REO Property has been liquidated
or until the purchase or repurchase thereof (or substitution therefor) from the
Trust Fund pursuant to any applicable provision of this Agreement, except as
otherwise provided in this Section 4.01, or (iii) the date on which such
Mortgage Loan becomes 150 days delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer (or,
including for the avoidance of doubt, the Trustee as successor servicer) if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor and the Trustee. In addition, the Servicer
shall not be required to advance any Relief Act Shortfalls. The Servicer will
not make any Advances of principal on REO Properties.
(c) Notwithstanding the foregoing, the Servicer shall not be required
to make any Advances for any Mortgage Loan after such Mortgage Loan becomes 150
days delinquent. The Servicer shall identify such delinquent Mortgage Loans in
the delinquency reports to be furnished by the Servicer to the Trustee pursuant
to Section 3.24.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment Interest
Shortfall resulting from a Principal Prepayment in full, the Servicer shall,
from amounts in respect of the Servicing Fee for such Distribution Date, deposit
into the Collection Account, as a reduction of the Servicing Fee for such
Distribution Date, no later than the Servicer Advance Date immediately preceding
such Distribution Date, an amount up to the Prepayment Interest Shortfall;
provided that the amount so deposited with respect to any Distribution Date
shall be limited to one half of the product of (x) one-twelfth of 0.50% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans. In case of such
deposit, the Servicer shall not be entitled to any recovery or reimbursement
from the Depositor, the Trustee, the Issuing Entity or the Certificateholders.
With respect to any Distribution Date, to the extent that the Prepayment
Interest Shortfall exceeds Compensating Interest (such excess, a "Non-Supported
Interest Shortfall"), such Non-Supported Interest Shortfall shall reduce the
Current Interest with respect to each Class of Certificates, pro rata, based
upon the amount of interest each such Class would otherwise be entitled to
receive on such Distribution Date. Notwithstanding the foregoing, there shall be
no reduction of the Servicing Fee in connection with Prepayment Interest
Shortfalls relating to the Relief Act and the Servicer shall not be obligated to
pay Compensating Interest with respect to Prepayment Interest Shortfalls related
to the Relief Act.
SECTION 4.03. Distributions on the REMIC Interests.
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On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in each of the SWAP REMIC and the Lower Tier REMIC in an amount
sufficient to make the distributions on the respective Certificates on such
Distribution Date in accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) [RESERVED]
(b) On each Distribution Date, the Trustee shall, to the extent of
funds then available, make the following distributions from funds then available
in the Certificate Account, of an amount equal to the Interest Funds, in the
following order of priority:
(i) to the Class P Certificates, an amount equal to any
Prepayment Charges received with respect to the Mortgage Loans and all amounts
paid by the Servicer, the Sponsor or the Transferor in respect of Prepayment
Charges pursuant to this Agreement or the Transfer Agreement, as applicable, and
all amounts received in respect of any indemnification paid as a result of a
Prepayment Charge being unenforceable in breach of the representations and
warranties set forth in the Sale Agreement or the Transfer Agreement for the
related Prepayment Period;
(ii) to the Supplemental Interest Trust, any Net Swap Payments
owed to the Swap Counterparty;
(iii) to the Supplemental Interest Trust, any Swap Termination
Payment owed by the Issuing Entity to the Swap Counterparty (other than any
Defaulted Swap Termination Payment);
(iv) concurrently, to each class of the Class A Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to each such
class; provided, however, that if Interest Funds are insufficient to make a full
distribution of the aggregate Current Interest and the aggregate Interest Carry
Forward Amount to the Class A Certificates, Interest Funds will be distributed
pro rata among each class of the Class A Certificates based upon the ratio of
(x) the Current Interest and Interest Carry Forward Amount for each class of the
Class A Certificates to (y) the total amount of Current Interest and any
Interest Carry Forward Amount for the Class A-1, Class A-2 and Class R
Certificates in the aggregate;
(v) to the Class M-1 Certificates, the Current Interest for such
class and any Interest Carry Forward Amount with respect to such class;
(vi) to the Class M-2 Certificates, the Current Interest for such
class and any Interest Carry Forward Amount with respect to such class;
(vii) to the Class M-3 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such class;
(viii) to the Class M-4 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such class;
(ix) to the Class M-5 Certificates, the Current Interest for such
class and any Interest Carry Forward Amount with respect to such class;
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(x) to the Class M-6 Certificates, the Current Interest for such
class and any Interest Carry Forward Amount with respect to such class;
(xi) to the Class B-1 Certificates, the Current Interest for each
such class and any Interest Carry Forward Amount with respect to each such
class;
(xii) to the Class B-2 Certificates, the Current Interest for
each such class and any Interest Carry Forward Amount with respect to each such
class;
(xiii) to the Class B-3 Certificates, the Current Interest for
each such class and any Interest Carry Forward Amount with respect to each such
class; and
(xiv) any remainder pursuant to Section 4.04(f) hereof.
On each Distribution Date, subject to the proviso in (iv) above, Interest
Funds received on the Group One Mortgage Loans will be deemed to be distributed
to the Class R and Class A-1 Certificates and Interest Funds received on the
Group Two Mortgage Loans will be deemed to be distributed to the Class A-2
Certificates, in each case, until the related Current Interest and Interest
Carry Forward Amount of each such class of Certificates for such Distribution
Date has been paid in full. Thereafter, Interest Funds not required for such
distributions are available to be applied to if necessary, to the class or
classes of Certificates that are not related to such group of Mortgage Loans.
(c) [RESERVED]
(d) On each Distribution Date, the Trustee shall, to the extent of
funds then available, make the following distributions from the Certificate
Account of an amount equal to the Principal Distribution Amount in the following
order of priority, and each such distribution shall be made only after all
distributions pursuant to Section 4.04(b) above shall have been made until such
amount shall have been fully distributed for such Distribution Date:
(i) to the Supplemental Interest Trust, any Net Swap Payments
owed to the Swap Counterparty;
(ii) to the Supplemental Interest Trust, any Swap Termination
Payment owed by the Issuing Entity to the Swap Counterparty (other than any
Defaulted Swap Termination Payment);
(iii) to the Class A Certificates, the Class A Principal
Distribution Amount shall be distributed as follows:
(a) the Group One Principal Distribution Amount will be
distributed as follows: sequentially to the Class R and Class A-1
Certificates, until the Certificate Principal Balance of each such class
has been reduced to zero;
(b) the Group Two Principal Distribution Amount will be
distributed sequentially, to the Class A-2A Certificates until the
Certificate Principal Balance thereof has been reduced to zero, then to the
Class A-2B Certificates until the Certificate Principal Balance thereof has
been reduced to zero, then to the Class A-2C Certificates until the
Certificate Principal Balance thereof has been reduced to zero and then to
the Class A-2D Certificates until the Certificate Principal Balance thereof
has been reduced to zero; provided, however, that on and after the
Distribution Date on which the aggregate Certificate Principal Balance of
the Subordinate Certificates has been reduced to zero and the Stated
Principal Balance of the
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Mortgage Loans is equal to or less than the aggregate Certificate Principal
Balance of the Class A Certificates, any principal distributions allocated
to the Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates are
required to be allocated pro rata, among such classes, based on their
respective Certificate Principal Balances, until their Certificate
Principal Balances have been reduced to zero;
(iv) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(v) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(vi) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;
(vii) to the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount;
(viii) to the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount;
(ix) to the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount;
(x) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(xi) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(xii) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount; and
(xiii) any remainder pursuant to Section 4.04(f) hereof.
(e) [RESERVED]
(f) On each Distribution Date, the Trustee shall, to the extent of
funds then available, make the following distributions up to the following
amounts from the Certificate Account of the remainders pursuant to Section
4.04(b)(xiv) and (d)(xiii) hereof and each such distribution shall be made only
after all distributions pursuant to Sections 4.04(b) and (d) above shall have
been made until such remainders shall have been fully distributed for such
Distribution Date:
(i) to the Class A Certificates, any amounts due as described in
the same order of priority as set forth in Section 4.04(b)(iv);
(ii) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;
(iii) to the Subordinate Certificates, any amounts due as
described in the same order of priority as set forth in Section 4.04 (v)
through (xiii);
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(iv) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such class;
(v) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such class;
(vi) to the Class M-3 Certificates, any Unpaid Realized Loss
Amount for such class;
(vii) to the Class M-4 Certificates, any Unpaid Realized Loss
Amount for such class;
(viii) to the Class M-5 Certificates, any Unpaid Realized Loss
Amount for such class;
(ix) to the Class M-6 Certificates, any Unpaid Realized Loss
Amount for such class;
(x) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such class;
(xi) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such class;
(xii) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such class;
(xiii) to the Class A, Class M and Class B Certificates, on a pro
rata basis, based upon outstanding Floating Rate Certificate Carryover for
each such Class, the Floating Rate Certificate Carryover for each such
Class; and
(xiv) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date, the Trustee shall allocate the
remainders pursuant to Section 4.04(f)(xiv) as follows:
(i) to the Supplemental Interest Trust, any Defaulted Swap
Termination Payment;
(ii) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest Carry
Forward Amount, (III) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (IV) the Class C Unpaid Realized Loss Amount; and
(iii) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Trustee shall allocate the
remainder pursuant to Section 4.04(g)(iii) hereof (i) to the Trustee to
reimburse amounts or pay indemnification amounts owing to the Trustee from the
Issuing Entity pursuant to Section 6.03, (ii) to the Class C Certificates, any
amounts remaining after distribution of the Optional Termination Amount, as
applicable, pursuant
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to this Section 4.04 and (iii) to the Class R Certificate and such distributions
shall be made only after all preceding distributions shall have been made until
such remainder shall have been fully distributed.
(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C Certificates and the Subordinate Certificates in the following order of
priority:
(i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;
(ii) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(iii) to the Class B-2 Certificates until the Class B-2
Certificate Principal Balance is reduced to zero;
(iv) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;
(v) to the Class M-6 Certificates until the Class M-6 Certificate
Principal Balance is reduced to zero;
(vi) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero;
(vii) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
(viii) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(ix) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(x) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five (5) Business Days prior to the related Record Date or,
if not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.
In accordance with this Agreement, the Servicer shall prepare and deliver
an electronic report (the "Remittance Report") to the Trustee (or by such other
means as the Servicer and the Trustee may agree from time to time) containing
such data and information as to permit the Trustee to prepare the Monthly
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Statement to Certificateholders and make the required distributions for the
related Distribution Date. The Trustee will prepare the Monthly Report based
solely upon the information received from the Servicer.
The Trustee shall promptly notify the NIMs Insurer of any proceeding or the
institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates and the Trustee hereby agree
that the NIMs Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class C Certificates and the Class P
Certificates in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim;
provided, however, that the NIMs Insurer will not have any rights with respect
to any Preference Claim set forth in this paragraph unless the indenture trustee
with respect to the NIM Notes or the holder of any NIMs Notes has been required
to relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the NIM Notes, as applicable, and the NIMs Insurer made a
payment in respect of such relinquished amount.
(k) The Trustee is hereby directed by the Depositor to execute the Cap
Contracts on behalf of the Issuing Entity in the form presented to it by the
Depositor and shall have no responsibility for the contents of such Cap
Contract, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Issuing Entity under the Cap
Contracts at closing shall be paid by the Depositor. Notwithstanding anything to
the contrary contained herein or in any Cap Contract, except as set forth in
Section 11 of each Cap Contract, the Issuing Entity shall not be required to
make any payments to the counterparty under any Cap Contract. Any payments
received under the terms of the related Cap Contract will be available to pay
the holders of the related Class A-1 Certificates, Class A-2 Certificates and
Subordinate Certificates up to the amount of any Floating Rate Certificate
Carryovers remaining after all other distributions required under this Section
4.04 are made on such Distribution Date, other than Floating Rate Certificate
Carryovers attributable to the fact that Applied Realized Loss Amounts are not
allocated to the Class A Certificates. Any amounts received under the terms of
any Cap Contract on a Distribution Date that are not used to pay such Floating
Rate Certificate Carryovers will be distributed to the holders of the Class C
Certificates. Payments in respect of such Floating Rate Certificate Carryovers
from proceeds of a Cap Contract shall be paid to the related Classes of Class
A-1 Certificates, Class A-2 Certificates and Subordinate Certificates, pro rata
based upon such Floating Rate Certificate Carryovers for each such class of
Class A-1 Certificates, Class A-2 Certificates and Subordinate Certificates.
Amounts received on the Class A-1 Cap Contract will only be available to make
payments on the Class A-1 Certificates, amounts received on the Class A-2 Cap
Contract will only be available to make payments on the Class A-2 Certificates,
amounts received on the Subordinate Certificates Cap Contract will only be
available to make payments on the Subordinate Certificates.
(i) The Trustee shall establish and maintain, for the benefit of
the Issuing Entity and the Certificateholders, the Cap Contract Account. On or
prior to the related Cap Contract Termination Date, amounts, if any, received by
the Trustee for the benefit of the Trust Fund in respect of the related Cap
Contract shall be deposited by the Trustee into the Cap Contract Account and
will be used to pay Floating Rate Certificate Carryovers on the related Class
A-1 Certificates, Class A-2 Certificates and Subordinate Certificates to the
extent provided in the immediately preceding paragraph. With respect to any
Distribution Date on or prior to the related Cap Contract Termination Date, the
amount, if any,
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payable by the Cap Contract Counterparty under the related Cap Contract will
equal the product of (i) the excess of (x) One-Month LIBOR (as determined by the
Cap Contract Counterparty and subject to a cap equal to the rate with respect to
such Distribution Date as shown under the heading "1ML Upper Collar" in the
schedule to the related Cap Contract), over (y) the rate with respect to such
Distribution Date as shown under the heading "1ML Strike Lower Collar" in the
schedule to the related Cap Contract, (ii) an amount equal to the lesser of (x)
the related Cap Contract Notional Balance for such Distribution Date and (y) the
outstanding Certificate Principal Balance of the related classes of Certificates
and (iii) the number of days in such Accrual Period, divided by 360. If a
payment is made to the Issuing Entity under a Cap Contract and the Trustee is
required to distribute excess amounts to the holders of the Class C Certificates
as described above, information regarding such distribution will be included in
the monthly statement made available on the Trustee's website pursuant to
Section 4.05 hereof.
(ii) Amounts on deposit in the Cap Contract Account will remain
uninvested pending distribution to Certificateholders.
(iii) Each Cap Contract is scheduled to remain in effect until
the related Cap Contract Termination Date and will be subject to early
termination only in limited circumstances. Such circumstances include certain
insolvency or bankruptcy events in relation to the Cap Contract Counterparty
(after a grace period of three Local Business Days, as defined in the related
Cap Contract, after notice of such failure is received by the Cap Contract
Counterparty) to make a payment due under the related Cap Contract, the failure
by the Cap Contract Counterparty (after a cure period of 20 days after notice of
such failure is received) to perform any other agreement made by it under the
related Cap Contract, the termination of the Trust Fund and the related Cap
Contract becoming illegal or subject to certain kinds of taxation.
(l) On the Closing Date, the Supplemental Interest Trust shall be
established and maintained pursuant to this Agreement, as a separate trust, the
corpus of which shall be held by the Trustee for the benefit of the holders of
the Certificates as a segregated subtrust of the Trust Fund. The Supplemental
Interest Trust shall contain the Swap Account, which shall be an Eligible
Account, and funds deposited therein shall be held separate and apart from, and
shall not be commingled with, any other moneys, including, without limitation,
other moneys of the Trustee held pursuant to this Agreement. In no event shall
any funds deposited in the Swap Account be credited to or made available to any
other account of the Trust Fund. The records of the Trustee shall at all times
reflect that the Supplemental Interest Trust is a subtrust of the Trust Fund,
the assets of which are segregated from other assets of the Trust Fund.
The Trustee shall enforce all of the rights of the Supplemental Interest
Trust and exercise any remedies under the Swap Agreement and, in the event the
Swap Agreement is terminated as a result of the designation by either party
thereto of an Early Termination Date (as defined in the Swap Agreement), find a
replacement counterparty to enter into a replacement swap agreement utilizing
the amounts of the net Swap Termination Payments received.
For each Distribution Date, through and including the Distribution Date in
March 2011, the Trustee shall, based on the Significance Estimate (which shall
be provided to the Trustee by the Depositor within five Business Days prior to
the Distribution Date), calculate the Significance Percentage of the Swap
Agreement. If on any such Distribution Date, the Significance Percentage is
equal to or greater than 9%, the Trustee shall promptly notify the Depositor and
the Depositor, on behalf of the Trustee, shall obtain the financial information
required to be delivered by the Swap Counterparty pursuant to the terms of the
Swap Agreement. If, on any succeeding Distribution Date through and including
the Distribution Date in March 2011, the Significance Percentage is equal to or
greater than 10%, the Trustee shall promptly notify the Depositor and the
Depositor shall, within five Business Days of such Distribution
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Date, deliver to the Trustee the financial information provided to it by the
Swap Counterparty for inclusion in the Form 10-D relating to such Distribution
Date.
Any Swap Termination Payment received by the Trustee shall be deposited in
the Swap Account and shall be used to make any upfront payment required under a
replacement swap agreement and any upfront payment received from the
counterparty to a replacement swap agreement shall be used to pay any Swap
Termination Payment owed to the Swap Counterparty.
Notwithstanding anything contained herein, in the event that a replacement
swap agreement cannot be obtained within 30 days after receipt by the Trustee of
the Swap Termination Payment paid by the terminated Swap Counterparty, the
Trustee shall deposit such Swap Termination Payment into a separate, segregated
non-interest bearing subtrust established by the Trustee and the Trustee shall,
on each Distribution Date following receipt of such Swap Termination Payment,
withdraw from such subtrust, an amount equal to the Net Swap Payment, if any,
that would have been paid to the Supplemental Interest Trust by the original
Swap Counterparty (computed in accordance with the original Swap Agreement) and
distribute such amount in accordance with Section 4.04(l)(i)-(viii) of this
Agreement. Any such subtrust shall not be an asset of any REMIC. Any amounts
remaining in such subtrust shall be distributed to the holders of the Class C
Certificates on the Distribution Date following the earlier of (i) the
termination of the Trust Fund pursuant to Section 9.01 and (ii) March, 2011.
On any Distribution Date, any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Swap Account. The Supplemental Interest Trust will not be
an asset of any REMIC. Funds in the Swap Account within the Supplemental
Interest Trust shall be distributed in the following order of priority by the
Trustee:
(i) to the Swap Counterparty, all Net Swap Payments, if any, owed
to the Swap Counterparty for such Distribution Date;
(ii) to the Swap Counterparty, any Swap Termination Payment,
other than a Defaulted Swap Termination Payment, if any, owed to the Swap
Counterparty;
(iii) to each class of the Class A Certificates, on a pro rata
basis, any Current Interest and any Interest Carry Forward Amount with respect
to such class to the extent unpaid;
(iv) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata basis and the Class B-3
Certificates on a pro rata basis, in that order, any Current Interest for such
class to the extent unpaid;
(v) to the Class A, Class M and Class B Certificates, to pay
principal as described and in the same manner and order of priority as set forth
in Sections 4.04(d)(iii) through 4.04(d)(xii) in order to restore levels of the
Overcollateralization Amount, and after giving effect to distributions from
Principal Distribution Amount for each such Class;
(vi) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata
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basis and the Class B-3 Certificates on a pro rata basis, in that order, any
Interest Carry Forward with respect to such class to the extent unpaid;
(vii) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata basis and the Class B-3
Certificates on a pro rata basis, in that order, any Unpaid Realized Loss Amount
for such class to the extent unpaid;
(viii) to the Class A, Class M and Class B Certificates, on a pro
rata basis, any Floating Rate Certificate Carryover to the extent not paid based
on the amount of such unpaid Floating Rate Certificate Carryover;
(ix) to the Swap Counterparty, any Defaulted Swap Termination
Payment owed to the Swap Counterparty to the extent not already paid; and
(x) to the Class C Certificates any remaining amount.
Notwithstanding the foregoing, however, after giving effect to proposed
distributions on any Distribution Date, the sum of the cumulative amounts
distributed pursuant to clause (v) above and the cumulative amounts distributed
pursuant to clause (vii) above shall be limited to the aggregate amount of
cumulative Realized Losses incurred from the Cut-off Date through the last day
of the related Prepayment Period.
Upon termination of the Trust Fund, any amounts remaining in the Swap
Account within the Supplemental Interest Trust shall be distributed pursuant to
the priorities set forth in this Section 4.04(l).
With respect to the failure of the Swap Counterparty to perform any of its
obligations under the Swap Agreement, the breach by the Swap Counterparty of any
of its representations and warranties made pursuant to the Swap Agreement, or
the termination of the Swap Agreement, the Trustee shall send any notices and
make any demands required hereunder.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on information
provided by the Servicer (which information is not required to include any
prediction of future performance as to which such report relates), the Trustee
shall prepare and make available on its website located at xxx.xxxxxxxx.xxx to
each Holder of a Class of Certificates of the Trust Fund, the Servicer, the NIMs
Insurer, the Rating Agencies and the Depositor a statement setting forth for the
Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein, (C) the Extra Principal Distribution
Amount, if any, and (D) the aggregate amount of Prepayment Charges, if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
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(iii) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;
(iv) the Pool Stated Principal Balance for such Distribution
Date;
(v) the amount of the Servicing Fee Rate paid to or retained by
the Servicer, the amount of the Trustee Fee Rate paid to or retained by the
Trustee, and any amounts constituting reimbursement or indemnification of the
Servicer or Trustee;
(vi) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(vii) the amount of Advances included in the distribution on such
Distribution Date;
(viii) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts to date, in the aggregate and with respect to the
Group One Mortgage Loans and Group Two Mortgage Loans;
(ix) the amount of (A) Realized Losses and (B) Applied Realized
Loss Amounts with respect to such Distribution Date, in the aggregate and with
respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(x) the number and aggregate principal amounts of Mortgage Loans
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60 days,
(2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure and Delinquent
(1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case as of
the close of business on the last day of the calendar month preceding such
Distribution Date, in the aggregate and with respect to the Group One Mortgage
Loans and Group Two Mortgage Loans;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on the last
day of the calendar month preceding such Distribution Date and the date of
acquisition thereof, in the aggregate and with respect to the Group One Mortgage
Loans and Group Two Mortgage Loans;
(xii) the total number and principal balance of any REO
Properties as of the close of business on the last day of the calendar month
preceding such Distribution Date, in the aggregate and with respect to the Group
One Mortgage Loans and Group Two Mortgage Loans;
(xiii) the aggregate Stated Principal Balance of all Liquidated
Loans as of the preceding Distribution Date, in the aggregate and with respect
to the Group One Mortgage Loans and Group Two Mortgage Loans;
(xiv) whether a Stepdown Trigger Event has occurred and is in
effect;
(xv) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
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(xvi) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;
(xvii) the number of Mortgage Loans for which Prepayment Charges
were received during the related Prepayment Period and, for each such Mortgage
Loan, the amount of Prepayment Charges received during the related Prepayment
Period and in the aggregate of such amounts for all such Mortgage Loans since
the Cut-off Date;
(xviii) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(viii);
(xix) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC "regular interest"
or REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
"regular interest" or REMIC "residual interest";
(xx) as of each Distribution Date, the amount, if any, to be
deposited in the Cap Contract Account pursuant to the related Cap Contract as
described in Section 4.04(k) and the amount thereof to be paid to the Class A-1
Certificates, the Class A-2 Certificates, the Subordinate Certificates and the
Class C Certificates described in Section 4.04(k) hereof;
(xxi) as of each Distribution Date, the amount, if any, to be
deposited in the Swap Account within the Supplemental Interest Trust pursuant to
the Swap Agreement as described in Section 4.04(l) and the amount thereof to be
paid to the Certificates; and
(xxii) any Floating Rate Certificate Carryover paid and all
Floating Rate Certificate Carryover remaining on each class of the Class A,
Class M and Class B Certificates on such Distribution Date;
(xxiii) information regarding any pool asset changes (other than
in connection with a pool asset converting into cash in accordance with its
terms), such as additions or removals in connection with pool asset
substitutions and repurchases (and purchase rates, if applicable);
(xxiv) the number of Mortgage Loans with respect to which (i) a
reduction in the Mortgage Rate has occurred or (ii) the related borrower's
obligation to repay interest on a monthly basis has been suspended or reduced
pursuant to the Servicemembers Civil Relief Act or the California Military and
Veterans Code, as amended; and the amount of interest not required to be paid
with respect to any such Mortgage Loans during the related Due Period as a
result of such reductions in the aggregate and with respect to the Group One
Mortgage Loans and the Group Two Mortgage Loans.
(b) The Trustee will make the Monthly Statement (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Certificateholders, other parties to this Agreement and
any other interested parties via the Trustee's Internet website. The Trustee's
Internet website shall initially be located at "xxx.xxxxxxxx.xxx." Parties that
are unable to use the website are entitled to have a paper copy mailed to them
via first class mail by calling the customer service desk and indicating such.
The Trustee shall have the right to change the way the monthly statements to
Certificateholders are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.
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The foregoing information and reports shall be prepared and determined by
the Trustee based on Mortgage Loan data provided to the Trustee by the Servicer
and information received by the Trustee from third parties, including the Swap
Counterparty. In preparing or furnishing the foregoing information, the Trustee
shall be entitled to rely conclusively on the accuracy of the information or
data provided to the Trustee by the Servicer or any other party and the Trustee
shall be entitled to rely conclusively upon and shall have no liability for any
errors in any such information.
As a condition to access the Trustee's Internet website, the Trustee may
require registration and the acceptance of a disclaimer. The Trustee will not be
liable for the dissemination of information in accordance with this Agreement.
(c) The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Trustee.
(d) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Trustee shall make available on its
website or cause to be furnished to each Person who at any time during the
calendar year was a Certificateholder of record, a statement containing the
information set forth in clauses (a)(i) without regard to subclauses (A)-(D)
thereof and (a)(ii) of this Section 4.05 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as are from time to time in
effect.
(e) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate and the NIMs Insurer each Form
1066 and each Form 1066Q and shall respond promptly to written requests made not
more frequently than quarterly by any Holder of a Class R Certificate with
respect to the following matters:
(i) The original projected principal and interest cash flows on
the Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as
of the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The Prepayment Assumption and any interest rate assumptions
used in determining the projected principal and interest cash flows described
above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of such
calendar quarter with respect to each Class of regular or residual interests
created hereunder and to the Mortgage Loans, together with each constant yield
to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of the REMICs with respect to
such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
REMICs; and
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(vii) Any taxes (including penalties and interest) imposed on the
REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Muliples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ -------------------- --------------------
A-1 $25,000.00 $1.00 $243,564,000
A-2A $25,000.00 $1.00 $186,658,000
A-2B $25,000.00 $1.00 $ 72,239,000
A-2C $25,000.00 $1.00 $ 88,798,000
A-2D $25,000.00 $1.00 $ 36,886,000
M-1 $25,000.00 $1.00 $ 29,431,000
M-2 $25,000.00 $1.00 $ 27,012,000
M-3 $25,000.00 $1.00 $ 15,320,000
M-4 $25,000.00 $1.00 $ 14,111,000
M-5 $25,000.00 $1.00 $ 12,901,000
M-6 $25,000.00 $1.00 $ 12,901,000
B-1 $25,000.00 $1.00 $ 11,692,000
B-2 $25,000.00 $1.00 $ 11,288,000
B-3 $25,000.00 $1.00 $ 8,063,000
C (1) (1) 100%
R $ 100.00 N/A $ 100.00
P (2) (2) (2)
----------
(1) The Class C Certificates shall not have minimum dollar denominations or
certificate notional amounts and shall be issued in a minimum percentage
interest of 10%.
(2) The Class P Certificates shall not have minimum dollar denominations or
Certificate Principal Balances and shall be issued in a minimum percentage
interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust Fund, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially
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in the form set forth as attached hereto executed by the Authenticating Agent by
manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. On the Closing Date, the Authenticating Agent
shall authenticate the Certificates to be issued at the written direction of the
Depositor, or any Affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute and the Authenticating
Agent shall authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly executed
by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Trustee in accordance with such
Trustee's customary procedures.
(b) No Transfer of a Class C or Class P Certificate shall be made
unless such Transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under the Securities Act and such state
securities laws. In the event that a Transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such Transfer and such Certificateholder's prospective transferee shall (except
with respect to the initial transfer of a Class C or Class P Certificate by
Xxxxxxx Xxxxx & Co. or, in connection with a transfer of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued, whether or not such notes are guaranteed by the NIMs Insurer)
each certify to the Trustee in writing the facts surrounding the Transfer in
substantially the form set forth in Exhibit F (the "Transferor Certificate") and
(i) deliver a letter in substantially the form of either Exhibit G (the
"Investment Letter") or Exhibit H (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee an Opinion of Counsel that such Transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Depositor or the Trustee. The Depositor shall provide
to any Holder of a Class C or Class P Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee shall
cooperate with the Depositor in providing the Rule 144A information
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referenced in the preceding sentence, including providing to the Depositor such
information in the possession of the Trustee regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Class C or Class P Certificate desiring to effect such Transfer
shall, and does hereby agree to, indemnify the Depositor and the Trustee against
any liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Certificate that is neither an ERISA Restricted
Certificate nor a Class R Certificate shall be registered unless the transferee
provides the Trustee with a representation that either (i) such transferee is
not, and is not acting for, on behalf of or with any assets of, an employee
benefit plan or other arrangement subject to Title I of ERISA or plan subject to
Section 4975 of the Code, or (ii) until the termination of the Swap Agreement,
the acquisition and holding of the Certificate are eligible for exemptive relief
under Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX
91-38, PTCE 95-60 or PTCE 96-23.
No transfer of an ERISA-Restricted Certificate or Class R Certificate shall
be made to any Person unless the Trustee has received (I) a representation that
such transferee is not an employee benefit plan subject to Title I of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, a "Plan"), and is not
directly or indirectly acquiring such Certificate for, on behalf of, or with any
assets of any such Plan, or (II) solely in the case of an ERISA-Restricted
Certificate, (A) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation that such Person is an insurance company that is
acquiring the Certificate with assets contained in an "insurance company general
account," as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60, and the acquisition and holding of the Certificate are covered
and exempt under Sections I and III of PTCE 95-60, or (B) solely in the case of
an ERISA Restricted Certificate that is a Definitive Certificate, an Opinion of
Counsel satisfactory to the Trustee, and upon which the Trustee and the NIMs
Insurer shall be entitled to rely, to the effect that the acquisition and
holding of such Certificate will not constitute or result in a nonexempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code, or a
violation of Similar Law, and will not subject the Trustee, the Servicer, the
NIMs Insurer or the Depositor to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Servicer, the NIMs Insurer or the Depositor.
For purposes of the two immediately preceding paragraphs of this Subsection
5.02(b), other than clause (II)(B) in the immediately preceding paragraph, the
representations as set forth therein shall be deemed to have been made to the
Trustee by the transferee's acceptance of the Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in the Certificate).
Notwithstanding any other provision herein to the contrary, any purported
transfer of a Certificate to or on behalf of a Plan without the delivery to the
Trustee of a representation or an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect. The Trustee shall not be
under any liability to any Person for any registration or transfer of any
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee be under any liability for making any payments due on such Certificate
to the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was registered by
the Trustee in accordance with the foregoing requirements. The Trustee shall be
entitled, but not obligated, to recover from any Holder of any Certificate that
was in fact a Plan and that held such Certificate in violation of this Section
5.02(b) all payments made on such Certificate at and after the time it commenced
such holding. Any such payments so recovered shall be paid and delivered to the
last preceding Holder of such Certificate that is not a Plan.
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(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class R Certificate unless, in addition
to the certificates required to be delivered to the Trustee under subparagraph
(b) above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form attached
hereto as Exhibit E-1 and an affidavit of the proposed transferor in the form
attached hereto as Exhibit E-2. In the absence of a contrary instruction from
the transferor of a Class R Certificate, declaration (11) in Appendix A of the
Transfer Affidavit may be left blank. If the transferor requests by written
notice to the Trustee prior to the date of the proposed transfer that one of the
two other forms of declaration (11) in Appendix A of the Transfer Affidavit be
used, then the requirements of this Section 5.02(c)(ii) shall not have been
satisfied unless the Transfer Affidavit includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI (or any successor
thereto) and the Trustee consents to such transfer, sale or other disposition in
writing.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(c), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by Section 5.02(b) and this Section 5.02(c) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the Transfer
was registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of such
Certificate.
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(v) At the option of the Holder of the Class R Certificate, the
Class SWR Interest, the Class LTR Interest and the residual interest in the
Upper Tier REMIC may be severed and represented by separate certificates (with
the certificate that represents the Residual Interest also representing all
rights of the Class R Certificate to distributions attributable to an interest
rate on the Class R Certificate in excess of the REMIC Pass-Through Rate);
provided, however, that such separate certification may not occur until the
Trustee and the NIMs Insurer receive an Opinion of Counsel to the effect that
separate certification in the form and manner proposed would not result in the
imposition of federal tax upon the Trust Fund or any of the REMICs provided for
herein or cause any of the REMICs provided for herein to fail to qualify as a
REMIC; and provided further, that the provisions of Sections 5.02(b) and (c)
will apply to each such separate certificate as if the separate certificate were
a Class R Certificate. If, as evidenced by an Opinion of Counsel, it is
necessary to preserve the REMIC status of any of the REMICs provided for herein,
the Class SWR Interest, the Class LTR Interest and the residual interest in the
Upper Tier REMIC shall be severed and represented by separate Certificates (with
the certificate that represents the Residual Interest also representing all
rights of the Class R Certificate to distributions attributable to an interest
rate on the Class R Certificate in excess of the REMIC Pass-Through Rate).
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee and the NIMs Insurer of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the NIMs
Insurer or the Depositor, to the effect that the elimination of such
restrictions will not cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, any REMIC provided for herein, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Class R Certificate hereby consents to any amendment of
this Agreement that, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The transferor of the Class R Certificate shall notify the Trustee
in writing upon the transfer of the Class R Certificate.
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Issuing Entity, the Depositor or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee and their counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Issuing Entity, as if originally issued,
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whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Trustee under the terms of this
Section 5.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The NIMs Insurer, the Trustee and any agent of the NIMs Insurer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and neither the NIMs
Insurer nor the Trustee, nor any agent of the NIMs Insurer or the Trustee, shall
be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in writing
from the Trustee, (b) state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, and (c) provide a copy of the communication that such
Certificateholders propose to transmit or if the NIMs Insurer or the Depositor
shall request such information in writing from the Trustee, then the Trustee
shall, within ten Business Days after the receipt of such request, provide the
NIMs Insurer or the Depositor or such Certificateholders at such recipients'
expense the most recent list of the Certificateholders of the Trust Fund held by
the Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class C, Class P and Class R Certificates shall be definitive
certificates. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the NIMs Insurer and the Trustee may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry
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transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
In the event that Definitive Certificates are issued pursuant to Section
5.08(b), clauses (a) through (g) of this Section 5.06 shall continue to apply
with respect to all remaining Book-Entry Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners and the Trustee shall give all such
notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
(a) If, after Book-Entry Certificates have been issued with respect to any
Certificates, (i) the Depository or the Depositor advises the Trustee that the
Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (ii) the Depositor notifies the Trustee of its intent to terminate
the book-entry system through the Depository and, upon receipt of notice of such
intent from the Depository, the Certificate Owners of the Book-Entry
Certificates agree to initiate such termination or (iii) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Book-Entry Certificates and the NIMs Insurer, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Authenticating Agent shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be
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imposed upon and performed by the Trustee, to the extent applicable with respect
to such Definitive Certificates and the Trustee shall recognize the Holders of
such Definitive Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Ownit
2006-4 as offices for such purposes. The Trustee will give prompt written notice
to the Certificateholders of any change in such location of any such office or
agency.
SECTION 5.10. Authenticating Agents.
(a) One or more Authenticating Agents (each, an "Authenticating Agent") may
be appointed hereunder each of which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be an entity organized and doing business under
the laws of the United States of America or any state thereof, having a combined
capital and surplus of at least $15,000,000, authorized under such laws to
operate a trust business and subject to supervision or examination by federal or
state authorities. If the Authenticating Agent is a party other than the
Trustee, the Trustee shall have no liability in connection with the performance
or failure of performance of the Authenticating Agent. LaSalle Bank National
Association is hereby appointed as the initial Authenticating Agent. The Trustee
shall be the Authenticating Agent during any such time as no other
Authenticating Agent has been appointed and has not resigned.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
Except with respect to the initial Authenticating Agent, LaSalle Bank National
Association, which shall be the Authenticating Agent for so long as it is the
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 5.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon
and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.
Except as provided in the next paragraph, the Depositor and the Servicer
will each keep in full effect its existence, rights and franchises as a
corporation, a limited liability company, a limited partnership or banking
association under the laws of the United States or under the laws of one of the
States thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, Xxxxxx Xxx or Xxxxxxx Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and
Others.
None of the Depositor, the Servicer, nor any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Issuing Entity or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor or the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Issuing Entity and held harmless against any loss, liability
or expense, incurred in connection with the performance of their duties under
this Agreement or incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense (i) incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or (ii) which does not constitute
an "unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). Neither the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that either of the
Depositor or the Servicer in its discretion may
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undertake any such action that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and the interests
of the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Depositor and the
Servicer shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 3.08 hereof.
SECTION 6.04. Limitation on Resignation of Servicer.
Subject to the provisions of Section 7.01, the third paragraph of Section
7.02, the second paragraph of Section 6.02 and the following paragraph of this
Section 6.04, the Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMs Insurer. No such resignation shall
become effective until the Trustee or a successor servicer reasonably acceptable
to the NIMs Insurer and the Trustee is appointed and has assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder. Any such
resignation shall not relieve the Servicer of any of the obligations specified
in Section 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer.
Notwithstanding anything to the contrary in the previous paragraph of this
Section 6.04, the Trustee, the Depositor and the NIMs Insurer hereby
specifically (i) consent to the pledge and assignment by the Servicer of all the
Servicer's right, title and interest in, to and under this Agreement to the
Servicing Rights Pledgee, if any, for the benefit of certain lenders, and (ii)
agree that upon delivery to the Trustee by the Servicing Rights Pledgee of a
letter signed by the Servicer whereby the Servicer shall resign as Servicer
under this Agreement, notwithstanding anything to the contrary which may be set
forth in Section 3.04 above, the Trustee shall appoint the Servicing Rights
Pledgee or its designee as successor servicer, provided that the Servicer's
resignation will not be effective unless, at the time of such appointment, the
Servicing Rights Pledgee or its designee (i) meets the requirements of a
successor servicer under Section 7.02 of this Agreement (including being
acceptable to the Rating Agencies), provided, that the consent and approval of
the Trustee, the Depositor and the NIMS Insurer shall be deemed to have been
given to the Servicing Rights Pledgee or its designee, and the Servicing Rights
Pledgee and its designee are hereby agreed to be acceptable to the Trustee, the
Depositor and the NIMS Insurer and (ii) agrees to be subject to the terms of
this Agreement. If, pursuant to any provision hereof, the duties of the Servicer
are transferred to a successor servicer, the entire amount of the Servicing Fee
and other compensation payable to the Servicer pursuant hereto shall thereafter
be payable to such successor servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for Persons
performing servicing for mortgage loans purchased by Xxxxxx Mae or Xxxxxxx Mac
unless the Servicer has obtained a waiver of such requirements from the Sponsor.
The Servicer shall provide the Trustee and the NIMs Insurer, upon request and
reasonable notice, with copies of such policies and fidelity bond or a
certification from the insurance provider evidencing such policies and fidelity
bond. The Servicer may be deemed to have complied with this provision if an
Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. In the event that any such
policy or bond ceases to be in effect, the Servicer shall use its reasonable
best efforts
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to obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement.
Each year, together with the Annual Statement as to Compliance delivered
pursuant to Section 3.17, the Servicer shall cause to be delivered to the
Trustee proof of coverage of the fidelity bond and errors and omissions
insurance policy and a statement from the surety and the insurer that the surety
and the insurer shall endeavor to notify the Trustee within thirty (30) days
prior to such fidelity bond's errors and omissions insurance policy's
termination or material modification.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any Advance, to deposit
in the Collection Account or the Certificate Account or remit to the Trustee any
payment (excluding a payment required to be made under Section 4.01 hereof)
required to be made under the terms of this Agreement, which failure shall
continue unremedied for three Business Days and, with respect to a payment
required to be made under Section 4.01 hereof, for one Business Day, after the
date on which written notice of such failure shall have been given to the
Servicer by the Trustee or the Depositor; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the Servicer by the Trustee or the Depositor, or to the
Trustee and the Depositor by the NIMs Insurer or the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates;
or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.27 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by any other party to this
Agreement; or
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(vii) the aggregate amount of cumulative Realized Losses incurred
since the Cut-off Date through the last day of the related Accrual Period
divided by the Pool Stated Principal Balance as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
July 2009 through June 2010 4.50%
July 2010 through June 2011 6.00%
July 2011 through June 2012 7.20%
July 2012 and thereafter 7.50%
If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00 p.m. on the Servicer Remittance Date, the Trustee may,
or at the direction of the NIMs Insurer or the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), shall, by notice in writing to the Servicer and the Servicing Rights
Pledgee, if any (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. To the
extent the Event of Default resulted from the failure of the Servicer to make a
required Advance, the Trustee shall thereupon make any Advance described in
Section 4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Collection Account, or thereafter be received
with respect to the Mortgage Loans. The Servicer and the Trustee shall promptly
notify the Rating Agencies of the occurrence of an Event of Default or an event
that, with notice, passage of time, other action or any combination of the
foregoing would be an Event of Default, such notice to be provided in any event
within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Section 3.08(a), and any other amounts payable to
the Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder. Notwithstanding anything herein to the contrary,
upon termination of the Servicer hereunder, any liabilities of the Servicer
which accrued prior to such termination shall survive such termination.
SECTION 7.02. Trustee to Act; Appointment of Successor.
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On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, compensation and reimbursement for costs
and expenses relating to the Mortgage Loans that the Servicer would have been
entitled to hereunder if the Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Servicer in accordance with Section 7.01 hereof, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which
successor shall be approved by the NIMs Insurer and which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
Servicer shall be an institution that is acceptable to the NIMs Insurer and is a
Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in good standing, that has a
net worth of at least $15,000,000, and that is willing to service the Mortgage
Loans and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
the Trustee shall have consented thereto, prior written consent of the NIMs
Insurer is obtained (provided, that such prior written consent shall not be
required in the event that the Servicing Rights Pledgee or its designee is so
appointed as successor servicer) and written notice of such proposed appointment
shall have been provided by the Trustee to each Certificateholder. The Trustee
shall not resign as servicer until a successor servicer has been appointed and
has accepted such appointment. Pending appointment of a successor to the
Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from so
acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above or anything to the contrary which
may be set forth in Section 3.04, the Trustee, the Depositor and the NIMS
Insurer hereby agree that within ten Business Days of delivery to the Trustee by
the Servicing Rights Pledgee of a letter
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signed by the Servicer whereby the Servicer shall resign as Servicer under this
Agreement, or within ten days of Trustee's termination of the Servicer pursuant
to Section 7.01 or 7.02, the Servicing Rights Pledgee or its designee shall be
appointed as successor servicer; provided that at the time of such appointment
(i) the Servicing Rights Pledgee or such designee meets the requirements of a
successor servicer set forth above in this Section 7.02 (provided that the
consent and approval of the Trustee, the Depositor and the NIMs Insurer shall be
deemed to have been given to the Servicing Rights Pledgee or its designee, and
the Servicing Rights Pledgee and its designee are hereby agreed to be acceptable
to the Trustee, the Depositor and the NIMs Insurer) and (ii) the Servicing
Rights Pledgee or such designee agrees to be subject to the terms of this
Agreement.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Depositor and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the NIMs Insurer
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee
shall, at the written direction of the majority of the Certificateholders or the
NIMs Insurer, or may, proceed to protect and enforce its rights and the rights
of the Certificateholders or the NIMs Insurer under this Agreement by a suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee, the NIMs Insurer and the
Certificateholders.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform on their
face to the requirements of this Agreement. If any such instrument is found not
to conform on its face to the requirements of this Agreement in a material
manner, the Trustee shall notify the person providing such instrument of such
non-conformance and if the instrument is not corrected to its satisfaction, the
Trustee will provide notice thereof to the Certificateholders and the NIMs
Insurer and take such further action as directed by the Certificateholders and
the NIMs Insurer.
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No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct, its negligent failure to perform its obligations in
compliance with this Agreement, or any liability that would be imposed by reason
of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable, individually or as Trustee,
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not, individually or as Trustee, be liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee unless the Trustee was negligent or acted in
bad faith or with willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the NIMs Insurer or the
Holders in accordance with this Agreement relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall
be fully protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel of its choice and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by the NIMs Insurer or the Holders of each Class
of Certificates evidencing not less than 25% of the Voting Rights of such Class;
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(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
custodians, accountants or attorneys or independent contractors and the Trustee
will not be responsible for any misconduct or negligence on the part of any
agent, custodian, accountant, attorney or independent contractor appointed with
due care by it hereunder;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have received
written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any investigation
of matters arising hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the
NIMs Insurer or the Certificateholders, pursuant to the provisions of this
Agreement, unless the NIMs Insurer or such Certificateholders shall have offered
to the Trustee reasonable security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred therein or thereby; and
(x) if requested by the Servicer, the Trustee may appoint the
Servicer as the Trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs, expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any rerecording, refiling or
redepositing, as applicable, thereof, (B) to see to any insurance or (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, or any
related
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document other than with respect to the execution and authentication of the
Certificates, if it so executed or authorized the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Servicer of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor or the Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it was not the
Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee shall be entitled to receive on each Distribution Date the
Trustee Fee. The Trustee shall be entitled to compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee.
SECTION 8.06. Indemnification and Expenses of Trustee.
(a) LaSalle (as Trustee and in its individual capacity) and its
respective directors, officers, employees and agents shall be entitled to
indemnification from the Issuing Entity for any loss, liability or expense
incurred in connection with any audit, controversy or judicial proceeding
relating to a governmental authority or any legal proceeding or incurred without
negligence or willful misconduct on their part, arising out of, or in connection
with the acceptance or administration of the trusts created hereunder or in
connection with the performance of its respective duties hereunder, including
any applicable fees and expenses payable hereunder, and the costs and expenses
of defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given
the Depositor and the Holders written notice thereof promptly after the Trustee
shall have knowledge thereof; provided that failure to so notify shall not
relieve the Issuing Entity of the obligation to indemnify the Trustee; however,
any reasonable delay by the Trustee to provide written notice to the Depositor
and the Holders promptly after the Trustee shall have obtained knowledge of a
claim shall not relieve the Issuing Entity of the obligation to indemnify the
Trustee under this Section 8.06;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Depositor in preparing such defense;
(iii) notwithstanding anything to the contrary in this Section
8.06, the Issuing Entity shall not be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Depositor, which
consent shall not be unreasonably withheld; and
(iv) any such loss, liability or expense to be indemnified by the
Issuing Entity must constitute an "unanticipated expense" of the Trust Fund
within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
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The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee shall be entitled to reimbursement by the Trust Fund
of all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with this Agreement (including fees and expenses of its
counsel and all persons not regularly in its employment), except any such
expenses, disbursements and advances that either (i) arise from its negligence,
bad faith or willful misconduct or (ii) do not constitute "unanticipated
expenses" within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
(c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $400,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and shall cease to apply after the date on which any NIM
Notes are paid in full; provided further, however, that amounts incurred by the
Trustee in excess of such annual limit in any calendar year shall be payable to
the Trustee in succeeding calendar years, subject to such annual limit for each
applicable calendar year. Any amounts reimbursable hereunder and all amounts
which the NIMs Insurer is entitled to be paid or reimbursed shall have been paid
or reimbursed. Any amounts not in excess of this cap may be withdrawn by the
Trustee from the Certificate Account at any time.
(d) The Custodian shall be entitled to indemnification and
reimbursement of expenses to the same extent as the Trustee is entitled to such
amounts pursuant to subsection (a) and (b) of this Section 8.06, without regard
to subsection (c) of this Section 8.06.
SECTION 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction) and reasonably acceptable to the NIMs Insurer. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the NIMs Insurer and their respective
Affiliates; provided, however, that such corporation cannot be an Affiliate of
the Servicer other than the Trustee in its role as successor to the Servicer.
SECTION 8.08. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts hereby
created by (1) giving written notice of resignation to the Depositor, the
Servicer and the NIMs Insurer by mailing notice of resignation by first class
mail, postage prepaid, to the Certificateholders at their addresses appearing on
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the Certificate Register and each Rating Agency, not less than 60 days before
the date specified in such notice when, subject to Section 8.09, such
resignation is to take effect, and (2) acceptance of appointment by a successor
trustee acceptable to the NIMs Insurer in accordance with Section 8.09 and
meeting the qualifications set forth in Section 8.07. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer or (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to reimburse the Trust Fund against such tax, then the Depositor or the NIMs
Insurer may remove the Trustee and the Depositor with the consent of the NIMS
insurer shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee and
one copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the successor trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
the NIMs Insurer and each Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.
SECTION 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIMs Insurer and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.10. Merger or Consolidation of Trustee.
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Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIMs Insurer to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Servicer and the Trustee may consider necessary or desirable. Any
such co-trustee or separate trustee shall be subject to the written approval of
the Servicer and the NIMs Insurer. The Trustee shall not be liable for the
actions of any co-trustee; provided the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee, with the consent of the NIMs Insurer, may at
any time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
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of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer, the NIMs Insurer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for herein shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. It is also intended
that each of the grantor trusts provided for in Section 2.07 hereof shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such grantor trust to qualify as, a grantor trust under the
provisions of Subpart E, Part I of Subchapter J of the Code. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of each of the REMICs
provided for herein and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each of the REMICs and grantor trusts provided for herein, containing such
information and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby; (b) within thirty days of
the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for each of
the REMICs provided for herein; (c) make or cause to be made elections, on
behalf of each of the REMICs provided for herein to be treated as a REMIC on the
federal tax return of such REMICs for their first taxable years (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions or other applicable law, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control conduct the
affairs of each of the REMICs and grantor trusts provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under
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the REMIC Provisions and the status of each of the grantor trusts provided for
herein as a grantor trust under Subpart E, Part I of Subchapter J of the Code;
(g) not knowingly or intentionally take any action or omit to take any action
that would cause the termination of the REMIC status of any of the REMICs
provided for herein or result in the imposition of tax upon any such REMIC; (h)
not knowingly or intentionally take any action or omit to take any action that
would cause the termination of the grantor trust status under Subpart E, Part I
of Subchapter J of the Code of any of the grantor trusts provided for herein or
result in the imposition of tax upon any such grantor trust; (i) pay, from the
sources specified in the last paragraph of this Section 8.12(a), the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (j) sign or cause to be signed federal, state
or local income tax or information returns; (k) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs and grantor trusts
provided for herein; and (l) as and when necessary and appropriate, represent
each of the REMICs provided for herein in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any of
the REMICs provided for herein, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any of the REMICs provided for herein, and otherwise act on behalf
of each of the REMICs provided for herein in relation to any tax matter
involving any of such REMICs or any controversy involving the Trust Fund.
In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within 10
days after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby agrees to
indemnify the Trustee for any losses, liabilities, damages, claims or expenses
of the Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any of
the REMICs provided for herein as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of any of such REMICs as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement or as a result of the
location of the Trustee, (ii) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts (other than amounts
derived by the Trust Fund from a payment on the Cap Contracts or amounts
received by the Supplemental Interest Trust as payments on the Swap Agreement)
otherwise to be distributed to the Class R Certificateholders (pro rata)
pursuant to Section 4.04, and second with amounts (other than amounts derived by
the Trust Fund from a payment on the Cap Contracts or amounts received by the
Supplemental Interest Trust as payments on the Swap Agreement) otherwise to be
distributed to all
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other Certificateholders in the following order of priority: first, to the Class
C Certificates (pro rata), second to the Class B-3 Certificates (pro rata),
third to the Class B-2 Certificates (pro rata), fourth to the Class B-1
Certificates (pro rata), fifth to the Class M-6 Certificates (pro rata), sixth
to the Class M-5 Certificates (pro rata), seventh to the Class M-4 Certificates
(pro rata), eighth to the Class M-3 Certificates (pro rata), ninth to the Class
M-2 Certificates (pro rata), tenth to the Class M-1 Certificates (pro rata) and
eleventh to the Class A Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class R
Certificate, the Trustee is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee agrees to notify
promptly in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.
(b) Each of the Depositor, the Servicer and the Trustee agrees not to
take or omit to take knowingly or intentionally, any action or omit to take any
action that would cause the termination of the REMIC status of any of the REMICs
provided for herein or result in the imposition of a tax upon any of the REMICs
provided for herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Auction of all Mortgage
Loans.
(a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Issuing Entity shall terminate upon the earlier of (a) an Optional Termination
and (b) the later of (i) the maturity or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created hereby continue beyond the earlier of (i) the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Trustee shall attempt to terminate the Trust Fund by
conducting an auction of all of the Mortgage Loans and REO Properties via a
solicitation of bids from at least three (3) bidders, each of which shall be a
nationally recognized participant in mortgage finance (the "Auction"). In
addition, the Trustee will also solicit a bid from each Holder of a Class C
Certificate. The Depositor and the Trustee agree to work in good faith to
develop bid procedures in advance of the Initial Optional Termination Date to
govern the operation of the Auction. The Trustee shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Trust Fund). The Trustee shall accept the highest bid received at the
Auction; provided that the amount of such bid equals or exceeds the Optional
Termination Price. The Trustee shall determine the Optional Termination Price
based upon information provided by (i) the Servicer with respect to the amounts
described in clauses (A) and (B) of the definition of "Optional Termination
Price", (ii) the Depositor with respect to the information described in clause
(C) of the definition of "Optional Termination Price." The Trustee may
conclusively rely upon the information provided to it in accordance with the
immediately preceding sentence and shall not have any liability for the failure
of any party to provide such information.
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If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the NIMs Insurer, if any, may
purchase all of the Mortgage Loans and REO Properties, which would result in an
early retirement of the Certificates and the termination of the Trust Fund. If
the Auction fails to achieve the Optional Termination Price and the NIMs
Insurer, if any, fails to exercise its option to purchase all of the Mortgage
Loans and REO Properties, the Servicer may purchase all of the Mortgage Loans
and REO Properties at the Optional Termination Price, which similarly would
result in an early retirement of the Certificates and the termination of the
Trust Fund. In connection with such termination, the Optional Termination Price
shall be delivered to the Trustee no later than two Business Days immediately
preceding the related Distribution Date. Notwithstanding anything to the
contrary herein, the Optional Termination Amount paid to the Trustee by the
winning bidder at the Auction or by the NIMs Insurer, if any, or by the
Servicer, as applicable, shall be deposited by the Trustee directly into the
Certificate Account immediately upon receipt. Upon any termination as a result
of an Auction, the Trustee shall, out of the Optional Termination Amount
deposited into the Certificate Account, (x) reimburse the Trustee for its costs
and expenses necessary to conduct the Auction and any other unreimbursed amounts
owing to it and (y) pay to the Servicer, the aggregate amount of any
unreimbursed out-of-pocket costs and expenses owed to the Servicer and any
unpaid or unreimbursed Servicing Fees, Advances and Servicing Advances.
Notwithstanding anything herein to the contrary, only an amount equal to the
Optional Termination Price, reduced by the portion thereof consisting of any
Swap Termination Payment (such portion, the "Swap Optional Termination
Payment"), shall be made available for distribution to the Certificates. The
Swap Optional Termination Payment shall be withdrawn by the Trustee from the
Certificate Account and remitted to the Supplemental Interest Trust for payment
to the Swap Counterparty. The Swap Optional Termination Payment shall not be
part of any REMIC and shall not be paid into any account which is part of any
REMIC.
(c) Notwithstanding anything to the contrary in clause (b) above, in
the event that the Trustee receives the written opinion of a nationally
recognized participant in mortgage finance acceptable to the Sponsor that the
Mortgage Loans and REO Properties to be included in the Auction will not be
saleable at a price sufficient to achieve the Optional Termination Price, the
Trustee need not conduct the Auction. In such event, the Servicer shall have the
option to purchase the Mortgage Loans and REO Properties at the Optional
Termination Price as of the Initial Optional Termination Date.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder and the NIMs Insurer or
(ii) the Trustee determines that a Class of Certificates shall be retired after
a final distribution on such Class, the Trustee shall notify the
Certificateholders as soon as practicable after such Determination Date that the
final distribution in retirement of such Class of Certificates is scheduled to
be made on the immediately following Distribution Date. Any final distribution
made pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed no later than the last calendar day of
the month immediately preceding the month of such final distribution. Any such
notice shall specify (a) the Distribution Date upon which final distribution on
the Certificates will be made upon presentation and surrender of Certificates at
the office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation
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and surrender of the Certificates at the office therein specified. The Trustee
will give such notice to the NIMs Insurer and each Rating Agency at the time
such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall remit all funds in
the Collection Account to the Trustee for deposit in the Certificate Account on
the Servicer Remittance Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund, certification to the Trustee that such required amount has been deposited
in the Trust Fund and the receipt by the Trustee of a Request for Release
therefor, the Trustee shall promptly release the Mortgage Files for the Mortgage
Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall not have any further duties or obligations
with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Trustee completes an Optional Termination as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the NIMs Insurer or Servicer, as
applicable to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 9.03 will not (i) result in the imposition of taxes
on "prohibited transactions" of any of the REMICs provided for herein as defined
in Section 860F of the Code, or (ii) cause any of the REMICs provided for herein
to fail to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation period and
notify the Trustee thereof, and the Trustee shall in turn specify the first day
of such period in a statement attached to the final tax returns of each of the
REMICs provided for herein pursuant to Treasury Regulation Section 1.860F-1. The
Depositor shall satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and
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(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class R Certificateholders all cash on hand (other than cash
retained to meet outstanding claims), and the Trust Fund shall terminate at that
time, whereupon the Trustee shall have no further duties or obligations with
respect to sums distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) Upon the written request of the Depositor, the Trustee as agent
for each REMIC hereby agrees to adopt and sign a plan of complete liquidation as
provided to it by the Depositor. The Trustee's obligation to adopt and sign such
plan of complete liquidation is subject to the Trustee's receipt of the Opinion
of Counsel referred to in Section 9.03(a)(i). In addition, the Trustee shall
take such other action in connection therewith as may be reasonably requested by
the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer and without the
consent of any of the Certificateholders to,
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with the Prospectus Supplement or any other provision
herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement, provided, however, that, in the case
of clauses (iii) and (iv), such amendment will not, as evidenced by an Opinion
of Counsel addressed to the Trustee to such effect, adversely affect in any
material respect the interests of any Holder; provided, further, however, that
such amendment will be deemed to not adversely affect in any material respect
the interest of any Holder if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment will not result in a
reduction or withdrawal of its rating of any Class of the Certificates, it being
understood and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. In
addition, this Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee without the consent of any of the Certificateholders to
comply with the provisions of Regulation AB.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for
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herein pursuant to the Code that would be a claim against the Trust Fund at any
time prior to the final redemption of the Certificates, provided that the
Trustee and the NIMs Insurer shall have been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the Trustee
or the NIMs Insurer, to the effect that such action is necessary or appropriate
to maintain such qualification or to avoid or minimize the risk of the
imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights, with the consent of the
NIMs Insurer, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66 2/3% or more of the Voting Rights of such Class or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such amendment is permitted
hereunder and will not cause the imposition of any tax on the Trust Fund, any of
the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding. A copy of such Opinion of Counsel shall be
provided to the NIMs Insurer.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
The Trustee shall not enter into any amendment to this Agreement that would
have a materially adverse effect on the Swap Counterparty without first
obtaining the consent of the Swap Counterparty.
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Notwithstanding anything to the contrary in this Section 10.01, the Trustee
and the Servicer shall reasonably cooperate with the Depositor and its counsel
to enter into such amendments or modifications to this Agreement as may be
necessary to comply with Regulation AB and any interpretation thereof by the
Securities and Exchange Commission.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the NIMs Insurer with respect to each of the following
of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
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(iii) The resignation or termination of the Trustee or the
Servicer and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03 and 3.12;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
(b) The Trustee shall promptly furnish or make available to each
Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
(ii) Each annual statement as to compliance described in Section
3.17; and
(iii) Each annual independent public accountant's servicing
report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and (ii) Xxxxx'x Investors Service, Inc., 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of the Servicer,
Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx XxXxxxx; and (d) in the case of the Trustee, LaSalle Bank
National Association, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Global Securities and Trust Services - Ownit 2006-4; and in
the case of any of the foregoing persons, such other addresses as may hereafter
be furnished by any such persons to the other parties to this Agreement. Notices
to Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
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The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such indemnity satisfactory to it as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection (except in
the case of the Trustee, in which case such expenses shall be borne by the
requesting Certificateholder); all other such expenses shall be borne by the
Servicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be
148
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Authenticating Agent pursuant to this Agreement,
are and shall be deemed fully paid.
SECTION 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any successor
thereto shall furnish to the NIMs Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIMs Insurer in addition to any
other addressee thereof. The Servicer shall cause the NIMs Insurer to be an
addressee of any report furnished pursuant to this Agreement. With respect to
the Trustee, such obligation shall be satisfied with the provision of access to
the NIMs Insurer to the Trustee's website.
(b) Wherever in this Agreement there shall be a requirement that there
be no downgrade, reduction, withdrawal or qualification of or other effect on
the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy insuring
the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this Agreement
there shall be a requirement that any Person or any communication, object or
other matter be acceptable or satisfactory to or otherwise receive the consent
or other approval of any other Person (whether as a condition to the eligibility
of such Person to act in any capacity, as a condition to any circumstance or
state of affairs related to such matter, or otherwise), there also shall be
deemed to be a requirement that such Person or matter be approved in writing by
the NIMs Insurer, which approval shall not be unreasonably withheld or delayed.
SECTION 10.13. Assignment; Sales; Advance Facilities.
(a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 10.13(e) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all of the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the NIMs Insurer, Trustee, Certificateholders or any other party shall be
required before the Servicer may enter into an Advance Facility nor shall the
NIMs Insurer, the Trustee or the Certificateholders be a third party beneficiary
of any obligation of an Advance Financing Person to the Servicer.
Notwithstanding the existence of any Advance Facility under which an Advance
Financing Person agrees to fund Advances and/or Servicing Advances, (A) the
Servicer (i) shall remain obligated pursuant to this Agreement to make Advances
and/or Servicing Advances pursuant to and as required by this Agreement and (ii)
shall
149
not be relieved of such obligations by virtue of such Advance Facility and (B)
neither the Advance Financing Person nor any Servicer's Assignee (as hereinafter
defined) shall have any right to proceed against or otherwise contact any
Mortgagor for the purpose of collecting any payment that may be due with respect
to any related Mortgage Loan or enforcing any covenant of such Mortgagor under
the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the Servicer and
the related Advance Financing Person shall deliver to the Trustee at the address
set forth in Section 10.05 hereof a written notice (an "Advance Facility
Notice"), stating (a) the identity of the Advance Financing Person, (b) the
identity of the Person (the "Servicer's Assignee") that will, subject to Section
10.13(c) hereof, have the right to make withdrawals from the Collection Account
pursuant to Section 3.08 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts") and (c) that the
Servicer's Assignee shall agree to be bound by the provisions of this Section
10.13. The Advance Facility Notice shall be executed by the Servicer, the
Advance Financing Person and the Servicer's Assignee. Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse itself
in accordance with Section 3.08 hereof, assuming the Servicer had made the
related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor Servicer in accordance with Section 3.08 hereof
to the extent permitted under Section 10.13(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of Advances and/or Servicing Advances in accordance with
Section 3.08 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Trustee in the manner set
forth in Section 10.05 hereof. Upon receipt of such written notice, the Servicer
shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Collection Account all Advance Reimbursement Amounts.
Notwithstanding the foregoing, and for the avoidance of doubt, (i) the Servicer
and/or the Servicer's Assignee shall only be entitled to reimbursement of
Advance Reimbursement Amounts hereunder pursuant to Section 3.08 of this
Agreement and shall not otherwise be entitled to make withdrawals of, or
receive, Advance Reimbursement Amounts that shall be deposited in the Collection
Account pursuant to Section 3.05 hereof, and (ii) none of the Trustee or the
Certificateholders shall have any right to, or otherwise be entitled to, receive
any Advance Reimbursement Amounts to which the Servicer or Servicer's Assignee,
as applicable, shall be entitled pursuant to Section 3.08 hereof. Without
limiting the foregoing, none of the Trustee, the NIMs Insurer or the
Certificateholders shall have any right of set-off against Advance Reimbursement
Amounts hereunder. An Advance Facility may be terminated by the joint written
direction of the Servicer and the related Advance Financing Person. Written
notice of such termination shall be delivered to the Trustee in the manner set
forth in Section 10.05 hereof. Upon an Event of Default or if the Trustee
otherwise shall reasonably request, the Servicer shall maintain and provide to
any successor servicer or the Trustee as successor servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person (and such successor
servicer or Trustee may rely on such information).
(d) [RESERVED]
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an
150
Advance Reimbursement Amount related to Advances and/or Servicing Advances that
were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer's Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.
(f) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.01, any Nonrecoverable Advance or
Nonrecoverable Servicing Advance referred to therein may have been made by such
Servicer or any predecessor Servicer. In making its determination that any
Advance or Servicing Advance theretofore made has become a Nonrecoverable
Advance or Nonrecoverable Servicing Advance, the Servicer shall apply the same
criteria in making such determination regardless of whether such Advance or
Servicing Advance shall have been made by the Servicer or any predecessor
Servicer.
(g) The Trustee shall not, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the payment of
any Advance Reimbursement Amount, have any additional responsibility to track or
monitor Advance Reimbursement Amounts or any Advance Facility, and, is not and
shall not be obligated to make any payment with respect to any Advance
Reimbursement Amount.
(h) Neither the Depositor nor the Trustee shall, as a result of the
existence of any Advance Facility, have any additional duty or liability with
respect to the calculation or payment of any Advance Reimbursement Amount, nor,
as a result of the existence of any Advance Facility, shall the Depositor or the
Trustee have any additional responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the Servicer's Assignee. The Servicer shall indemnify the Depositor,
the Trustee, any successor servicer and the Issuing Entity for any claim, loss,
liability or damage resulting from any claim by the related Advance Financing
Person, except to the extent that such claim, loss, liability or damage resulted
from or arose out of negligence, recklessness or willful misconduct on the part
of the Depositor, the Trustee or any successor servicer, as the case may be, or
failure by the successor servicer or the Trustee, as the case may be, to remit
funds as required by this Agreement or the commission of an act or omission to
act by the successor servicer or the Trustee, as the case may be, and the
passage of any applicable cure or grace period, such that an Event of Default
under this Agreement occurs or such entity is subject to termination for cause
under this Agreement.
SECTION 10.14. Compliance with Regulation AB.
Each of the parties hereto acknowledges and agrees that the purpose of
Sections 3.17, 3.18 and 3.27 of this Agreement is to facilitate compliance by
the Depositor with the provisions of Regulation AB, as such may be amended or
clarified from time to time. Therefore, each of the parties agrees that (a) the
obligations of the parties hereunder shall be interpreted in such a manner as to
accomplish compliance with Regulation AB, (b) the parties' obligations hereunder
will be supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, or convention or consensus among
active participants in the asset-backed securities markets in respect of the
requirements of Regulation AB and (c) the parties shall comply with reasonable
requests made by the Depositor for delivery of that or different information as
is necessary to comply with the provisions of Regulation AB.
151
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX LOAN SERVICING LP,
as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
[INTENTIONALLY OMITTED]
B-1-1
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-2-1
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-3-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2006-4
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of June 1, 2006 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, LaSalle Bank National Association, as trustee and Xxxxxx Loan
Servicing LP, as servicer (the "Pooling and Servicing Agreement"), the
undersigned, as custodian, hereby certifies that [, except as set forth in
Schedule A hereto,] as to each Mortgage Loan listed in the Mortgage Loan
Schedule attached hereto (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the street address (excluding zip code), the
mortgage interest rate at origination, the gross margin (if applicable), the
lifetime rate cap (if applicable), the periodic rate cap (if applicable), the
original principal balance, the first payment due date and the original maturity
date in each Mortgage File conform to the respective Mortgage Loan number and
name listed on the Mortgage Loan Schedule and (ii) the existence in each
Mortgage File of each of the documents listed in subparagraphs (i)(A) through
(F), inclusive, or (ii)(A) through (K), inclusive, as applicable, of Section
2.01 in the Agreement. The custodian makes no
D-1
representations or warranties as to the validity, legality, recordability,
sufficiency, enforceability, due authorization or genuineness of any of the
documents contained in each Mortgage Loan or the collectability, insurability,
effectiveness, priority, perfection or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
AS CUSTODIAN ON BEHALF OF LASALLE BANK
NATIONAL ASSOCIATION AS TRUSTEE
BY:
------------------------------------
NAME:
----------------------------------
TITLE:
---------------------------------
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit 2006-4
Ladies and Gentlemen:
We propose to purchase Ownit Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2006-4, Class R, described in the Prospectus
Supplement, dated June 22, 2006, and the Prospectus, dated March 31, 2006.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Pooling and Servicing Agreement dated June 1, 2006 relating to
this issuance of the Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-4 (the "Pooling and servicing Agreement").
1. We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class R Certificate, we may incur tax liabilities in excess of any
cash flows generated by the Class R Certificate, and (d) we intend to pay any
taxes associated with holding the Class R Certificate as they become due and (e)
we will not cause income from the Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)
__________ The Class R Certificate will be registered in our name.
__________ The Class R Certificate will be held in the name of our
nominee, _________________, which is not a disqualified organization.
----------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-1
4. We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a
plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the Class
R Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI or successor form
at the time and in the manner required by the Code; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class R Certificate, we will transfer such interest in the
Class R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person or will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and will furnish us and the Trustee with a duly completed and
effective Internal Revenue Service Form W-8ECI or successor form at the time and
in the manner required by the Code and (iii) has delivered to the Trustee a
letter in the form of this letter (including the affidavit appended hereto) and,
we will provide the Trustee a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.
7. We hereby designate _______________________ as our fiduciary to act as
the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement in which the Class R Certificate represents the residual
interest.
E-1-2
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of , 200
---------- -- --
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of ______________ (the "Transferee"),
2. the Transferee's Employer Identification number is __________,
3. the Transferee is not a "disqualified organization" (as defined
below), has no plan or intention of becoming a disqualified
organization, and is not acquiring any of its interest in the Ownit
Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-4, Class R Certificate on behalf of a disqualified organization
or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc.("MLMI") has consented to
the transfer to the Transferee by executing the form of Consent
affixed as Appendix B to the Transferee's Letter to which this
Certificate is affixed as Appendix A, the Transferee is a "U.S.
person" (as defined below),
5. that no purpose of the transfer is to avoid or impede the assessment
or collection of tax,
6. the Transferee has historically paid its debts as they became due,
7. the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
8. the Transferee understands that, as beneficial owner of the Class R
Certificate, it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with holding the
Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by MLMI (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the
Class R Certificate will not be owned directly or indirectly by a
disqualified organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class R
Certificate to a foreign permanent establishment or fixed base (within
the meaning of an applicable income tax treaty) of the Transferee, and
as to each of the residual interests represented by the Class R
Certificate, the present value of
E-1-4
the anticipated tax liabilities associated with holding such residual
interest does not exceed the sum of:
A. the present value of any consideration given to the Transferee to
acquire such residual interest;
B. the present value of the expected future distributions on such
residual interest; and
C. the present value of the anticipated tax savings associated with
holding such residual interest as the related REMIC generates
losses.
For purposes of this declaration, (i) the Transferee is assumed to pay tax
at a rate equal to the highest rate of tax specified in Section 11(b)(1) of
the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code may
be used in lieu of the highest rate specified in Section 11(b)(1) of the
Code if the Transferee has been subject to the alternative minimum tax
under Section 55 of the Code in the preceding two years and will compute
its taxable income in the current taxable year using the alternative
minimum tax rate, and (ii) present values are computed using a discount
rate equal to the Federal short-term rate prescribed by Section 1274(d) of
the Code for the month of the transfer and the compounding period used by
the Transferee;]
[(11)(A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to another
eligible corporation in a transaction that satisfies Treasury
regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the
Transferee or another U.S. taxpayer.
E-1-5
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
----------------------------------------
By:
------------------------------------
----------------------------------------
Address of Investor for receipt of distribution:
----------------------------------------
Address of Investor for receipt of tax information:
----------------------------------------
----------------------------------------
(Corporate Seal)
Attest:
----------------------------------------
, Secretary
----------------------------------------
E-1-6
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this __
day of _______________, 200__.
----------------------------------------
Notary Public
County of
------------------------------
State of
-------------------------------
My commission expires the
--------------
day of
-----------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
---------------------------------
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit Series 2006-4
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-4
______ (the "Transferor") has reviewed the attached affidavit of _____ (the
"Transferee"), and has no actual knowledge that such affidavit is not true, and
has no reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to the Class R Certificate referred to in the attached
affidavit. In addition, the Transferor has conducted a reasonable investigation
at the time of the transfer and found that the Transferee had historically paid
its debts as they came due and found no significant evidence to indicate that
the Transferee will not continue to pay its debts as they become due.
Very truly yours,
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit Series 2006-4
RE: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-4
Ladies and Gentlemen:
In connection with our disposition of the Class [________] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of June 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, LaSalle Bank
National Association, as trustee and Xxxxxx Loan Servicing LP, as servicer.
Very truly yours,
----------------------------------------
Name of Transferor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit Series 2006-4
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-4
Ladies and Gentlemen:
____ (the "Purchaser") intends to purchase from ___ (the "Transferor") $___
by original principal balance (the "Transferred Certificates") of Ownit Mortgage
Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-4, Class [__]
(the "Certificates"), issued pursuant to a Pooling and Servicing Agreement,
dated as of June 1, 2006 (the "Pooling and Servicing Agreement"), among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), LaSalle Bank
National Association, as trustee (the "Trustee") and Xxxxxx Loan Servicing LP,
as servicer (the "Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED
CERTIFICATE IN THE NAME OF ____, AS NOMINEE FOR ____.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS
THE TRUSTEE SHALL
G-1
HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (A) AN
INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS
FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.
3. All Certificates other than ERISA Restricted Certificates and Class R
Certificates will bear a legend to the following effect:
UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS
CERTIFICATE SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE
CERTIFICATE, SHALL REPRESENT) TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS
NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY
EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S ACQUISITION AND HOLDING OF
THIS CERTIFICATE IS COVERED BY AND EXEMPT UNDER ANY OF PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX 00-00, XXXX
00-00, XXXX 96-23, EACH AS AMENDED.
4. The ERISA Restricted Certificates will bear a legend to the following
effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO
STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT
DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE BY, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF
AN ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS
AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN
"INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION
AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND
III OF PTCE 95-60 (IN THE CASE OF ANY ERISA RESTRICTED CERTIFICATE OTHER
THAN CLASS C CERTIFICATES OR CLASS P CERTIFICATES, AFTER THE TERMINATION OF
THE SWAP AGREEMENT), OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE,
AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND UPON WHICH THE
TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT
CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF
ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL
NOT SUBJECT THE TRUSTEE, THE NIMS INSURER, THE SERVICER OR THE DEPOSITOR TO
ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE NIMS INSURER, THE SERVICER OR THE DEPOSITOR. IF
THE CERTIFICATE IS NOT A DEFINITIVE
G-2
CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN
(A) OR (B) ABOVE.
5. The Class R Certificates will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES WITH A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975
OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER
LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.
6. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
7. The Purchaser (a) is a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters, and in
particular in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment in the
Certificates, (b) is able to bear the economic risks of such an investment and
(c) is an "accredited investor" within the meaning of Rule 501(a) promulgated
pursuant to the Securities Act.
8. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
9. Either (i) the Purchaser of a Certificate that is neither an ERISA
Restricted Certificate nor a Class R Certificate is not, and is not acting for,
on behalf of or with any assets of, an employee benefit plan or other
arrangement subject to Title I of ERISA or plan subject to Section 4975 of the
Code, or (ii) until the termination of the Swap Agreement, such Purchaser's
acquisition and holding of such Certificates are
----------
* Not required of a broker/dealer purchaser.
G-3
eligible for exemptive relief under Prohibited Transaction Class Exemption
("PTCE") 00-00, XXXX 00-0, XXXX 91-38, PTCE 95-60 or PTCE 96-23
10. The Purchaser of an ERISA Restricted Certificate (A) is not an employee
benefit plan subject to Title I of ERISA, a plan subject to Section 4975 of the
Code, a plan subject to any state, local, federal, non-U.S. or other law
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") and is not directly or indirectly acquiring such Certificates by, on
behalf of, or with any assets of any such plan, or (B) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, is an insurance company
that is acquiring the Certificate with assets of an "insurance company general
account," as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60, and the acquisition and holding of the Certificate are covered
and exempt under Sections I and III of PTCE 95-60 (in the case of any ERISA
Restricted Certificate other than Class C Certificates or Class P Certificates,
after the termination of the Swap Agreement), or (C) solely in the event the
Certificate is a Definitive Certificate, herewith delivers an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee shall be entitled to
rely, to the effect that the acquisition and holding of the Certificate will not
constitute or result in a nonexempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, or a violation of Similar Law, and will not
subject the Trustee, the NIMs Insurer, the Servicer or the Depositor to any
obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the NIMs Insurer, the Servicer or the Depositor.
11. The Purchaser of a Class R Certificate is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
12. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
13. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-4
EXHIBIT H
[RESERVED]
H-5
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2006-4
In connection with the administration of the Mortgage Loans held by you, as
Trustee, pursuant to the Pooling and Servicing Agreement dated as of June 1,
2006 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, LaSalle Bank
National Association, as trustee and Xxxxxx Loan Servicing LP, as servicer (the
"Pooling and Servicing Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
____ 1. Mortgage Paid in Full
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation (Repurchases, etc.)
____ 5. Nonliquidation
____
Address to which the Trustee should deliver the Mortgage File:
By:
------------------------------------
(authorized signer)
Address:
-------------------------------
Date:
----------------------------------
I-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By:
--------------------------------- ----------------------------------------
Signature Date
Documents returned to Custodian:
By:
--------------------------------- ----------------------------------------
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
[RESERVED]
K-1
EXHIBIT L
[RESERVED]
X-0
XXXXXXX X-0
[RESERVED]
X-0-0
XXXXXXX X-0
[RESERVED]
X-0-0
XXXXXXX X-0
[RESERVED]
M-3-1
EXHIBIT N-1
FORM OF CLASS A-1 CAP CONTRACT
Dated: June __, 2006
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. [37611]
Ladies and Gentlemen:
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms
and conditions of the rate Cap Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between The Bank of New York ("BNY"), a
trust company duly organized and existing under the laws of the State of New
York, and the Ownit Mortgage Loan Asset-Backed Certificates Series 2006-4 (the
"COUNTERPARTY"), as represented by LaSalle Bank National Association, not in its
individual capacity, but solely as Trustee under the Pooling and Servicing
Agreement, dated and effective June 1, 2006, among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as Depositor, Xxxxxx Loan Servicing LP, as Servicer, and
LaSalle Bank National Association, as Trustee (the "POOLING AND SERVICING
AGREEMENT"). This Agreement, which evidences a complete and binding agreement
between you and us to enter into the Transaction on the terms set forth below,
constitutes a "CONFIRMATION" as referred to in the "ISDA FORM MASTER AGREEMENT"
(as defined below), as well as a "Schedule" as referred to in the ISDA Form
Master Agreement.
1. FORM OF AGREEMENT. This Agreement is subject to the 2000 ISDA Definitions
(the "DEFINITIONS"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). You and we have agreed to enter
into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA
Master Agreement (Multicurrency--Cross Border) form (the "ISDA FORM MASTER
AGREEMENT"). An ISDA Form Master Agreement, as modified by the Schedule
terms in Paragraph 4 of this Confirmation (the "MASTER AGREEMENT"), shall
be deemed to have been executed by you and us on the date we entered into
the Transaction. Except as otherwise specified, references herein to
Sections shall be to Sections of the ISDA Form Master Agreement and the
Master Agreement, and references to Paragraphs shall be to paragraphs of
this Agreement. Each party hereto agrees that the Master Agreement deemed
to have been executed by the parties hereto shall be the same Master
Agreement referred to in the agreement setting forth the terms of
transaction reference numbers [37610, 37612 and 37613]. In the event of any
inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Capitalized terms not otherwise defined herein
or in the Definitions or the Master Agreement shall have the meaning
defined for such term in the Pooling and Servicing Agreement.
2. CERTAIN TERMS. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any Calculation Period the
amount set forth for such period on Schedule I
attached hereto.
N-1
Trade Date: June 30, 2006
Effective Date: June 26, 2006
Termination Date: December 25, 2006, subject to adjustment in
accordance with the Modified Following Business
Day Convention.
FLOATING AMOUNTS
Floating Rate Payer: BNY
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Day Count
Fraction: Actual/360
Floating Rate Option: USD-LIBOR-BBA, provided, however, if the
Floating Rate Option for a Calculation Period
is greater than [10.32]% (as set forth for such
period on Schedule I attached hereto) then the
Floating Rate Option for such Calculation
Period shall be deemed equal to [10.32]%.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on
December 25, 2006 and ending on the Termination
Date, subject to adjustment in accordance with
the Modified Following Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The Floating
Rate Payer Payment Date shall be two (2)
Business Days preceding each Floating Rate
Payer Period End Date.
Reset Dates: The first day of each Calculation Period or
Compounding Period, if Compounding is
applicable.
Compounding: Inapplicable
Business Days for
Payments By both parties: New York
Calculation Agent: BNY
3. ADDITIONAL PROVISIONS:
N-2
1) RELIANCE. Each party hereto is hereby advised and acknowledges that
the other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained from
taking) other material actions in reliance upon the entry by the
parties into the Transaction being entered into on the terms and
conditions set forth herein.
2) TRANSFER, AMENDMENT AND ASSIGNMENT. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall
be permitted by either party unless each of Standard & Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc ("S&P") and
Xxxxx'x Investors Service, Inc. ("MOODY'S"), has been provided notice
of the same and confirms in writing (including by facsimile
transmission) that it will not downgrade, qualify, withdraw or
otherwise modify its then-current ratings on the Certificates issued
under the Pooling and Servicing Agreement (the "CERTIFICATES").
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
1) NO NETTING BETWEEN TRANSACTIONS. The parties agree that subparagraph
(ii) of Section 2(c) will apply to any Transaction.
2) TERMINATION PROVISIONS. Subject to the provisions of Paragraph 4(10)
below, for purposes of the Master Agreement:
(a) "SPECIFIED ENTITY" is not applicable to BNY or the Counterparty
for any purpose.
(b) The "BREACH OF AGREEMENT" provision of Section 5(a)(ii) will not
apply to BNY or the Counterparty.
(c) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
not apply to BNY (except with respect to credit support furnished
pursuant to Paragraph 4 9) below or the Counterparty.
(d) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not
apply to BNY or the Counterparty.
(e) "DEFAULT UNDER SPECIFIED TRANSACTION" is not applicable to BNY or
the Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BNY or the Counterparty.
(f) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply
to BNY or to the Counterparty.
(g) The "BANKRUPTCY" provisions of Section 5(a)(vii)(2) will not
apply to the Counterparty; the words "trustee" and "custodian" in
Section 5(a)(vii)(6) will not include the Trustee; and the words
"specifically authorized " are inserted before the word "action"
in Section 5(a)(vii)(9).
(h) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will not apply to BNY or the Counterparty.
(i) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will
not apply to BNY or to the Counterparty.
N-3
(j) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "TERMINATION CURRENCY" means United States Dollars.
(l) NO ADDITIONAL AMOUNTS PAYABLE BY COUNTERPARTY. The Counterparty
shall not be required to pay any additional amounts pursuant to
Section 2(d)(i)(4) or 2(d)(ii).
3) TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), BNY and
the Counterparty make the following representations:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e)) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement contained in Section 4
(a)(i) or 4(a)(iii) and the accuracy and effectiveness of
any document provided by the other party pursuant to Section
4 (a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d), provided that it shall not be a
breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material
prejudice of its legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f), BNY and
the Counterparty make the following representations.
(i) The following representation will apply to BNY:
(x) It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) for United States federal income tax purposes,
(y) it is a trust company duly organized and existing under
the laws of the State of New York, and (y) its U.S. taxpayer
identification number is 000000000.
(ii) The following representation will apply to the Counterparty:
N-4
It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations)
for United States federal income tax purposes.
4) DOCUMENTS TO BE DELIVERED. FOR THE PURPOSE OF SECTION 4(A):
(a) Tax forms, documents or certificates to be delivered are:
COVERED BY
PARTY REQUIRED TO DELIVER DATE BY WHICH TO BE SECTION 3(D)
DOCUMENT FORM/DOCUMENT/ CERTIFICATE DELIVERED REPRESENTATION
------------------------- --------------------------------------------- ------------------------- --------------
BNY and Counterparty Any document required or reasonably Upon the execution and Yes
requested to allow the other party to make delivery of this
payments under this Agreement without any Agreement
deduction or withholding for or on the
account of any tax.
(b) Other documents to be delivered are:
COVERED BY
PARTY REQUIRED TO DELIVER DATE BY WHICH TO BE SECTION 3(D)
DOCUMENT FORM/DOCUMENT/ CERTIFICATE DELIVERED REPRESENTATION
------------------------- --------------------------------------------- ------------------------- --------------
BNY A certificate of an authorized officer of the Upon the execution and Yes
party, as to the incumbency and authority of delivery of this
the respective officers of the party signing Agreement
this Agreement, any relevant Credit Support
Document, or any Confirmation, as the case
may be.
Counterparty (i) a copy of the executed Pooling and Upon the execution and Yes
Servicing Agreement, and (ii) an incumbency delivery of this
certificate verifying the true signatures and Agreement
authority of the person or persons signing
this letter agreement on behalf of the
Counterparty.
BNY A copy of the most recent publicly available Promptly after request by Yes
regulatory call report. the other party
BNY Legal Opinion as to enforceability of the Upon the execution and Yes
Swap Agreement. delivery of this
Agreement.
Counterparty Certified copy of the Board of Directors Upon the execution and Yes
resolution (or equivalent authorizing delivery of this
documentation) which sets forth the authority Agreement.
of each signatory to the Confirmation signing
on its behalf and the authority of such party
to enter into Transactions contemplated and
performance of its obligations hereunder.
N-5
5) MISCELLANEOUS.
(a) ADDRESS FOR NOTICES: For the purposes of Section 12(a):
Address for notices or communications to BNY:
The Bank of New York
Swaps and Derivative Products Group
Global Market Division
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
with a copy to:
The Bank of New York
Swaps and Derivative Products Group
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Tele: 000-000-0000
Fax: 000-000-0000/5837
(For all purposes)
Address for notices or communications to the Counterparty:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: OWNIT 2006-4
Tele: 000-000-0000
Fax: 000-000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
BNY appoints as its Process Agent: Not Applicable
The Counterparty appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will not apply to this
Agreement; neither BNY nor the Counterparty have any Offices
other than as set forth in the Notices Section and BNY agrees
that, for purposes of Section 6(b), it shall not in future have
any Office other than one in the United States.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
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BNY is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is BNY.
(f) CREDIT SUPPORT DOCUMENT. Not applicable for either BNY (except
with respect to credit support furnished
pursuant to Paragraph 9) or the
Counterparty.
(g) CREDIT SUPPORT PROVIDER.
BNY: Not Applicable (except with respect to
credit support furnished pursuant to
Paragraph 9)
Counterparty: Not Applicable
(h) GOVERNING LAW. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i) SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) RECORDING OF CONVERSATIONS. Each party (i) consents to the
recording of telephone conversations between the trading,
marketing and other relevant personnel of the parties in
connection with this Agreement or any potential Transaction, (ii)
agrees to obtain any necessary consent of, and give any necessary
notice of such recording to, its relevant personnel and (iii)
agrees, to the extent permitted by applicable law, that
recordings may be submitted in evidence in any Proceedings.
(k) WAIVER OF JURY TRIAL. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(l) NON-RECOURSE. Notwithstanding any provision herein or in the ISDA
Form Master Agreement to the contrary, the obligations of the
Counterparty hereunder
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are limited recourse obligations of the Counterparty, payable
solely from the Trust Fund and the proceeds thereof to satisfy
the Counterparty's obligations hereunder. In the event that the
Trust Fund and proceeds thereof should be insufficient to satisfy
all claims outstanding and following the realization of the Trust
Fund and the distribution of the proceeds thereof in accordance
with the Pooling and Servicing Agreement, any claims against or
obligations of the Counterparty under the ISDA Form Master
Agreement or any other confirmation thereunder, still outstanding
shall be extinguished and thereafter not revive. This provision
shall survive the expiration of this Agreement.
(m) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. BNY shall
not institute against or cause any other person to institute
against, or join any other person in instituting against the
Counterparty, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, under any of the laws of
the United States or any other jurisdiction, for a period of one
year and one day (or, if longer, the applicable preference
period) following indefeasible payment in full of the
Certificates. This provision shall survive the expiration of this
Agreement.
(n) REMEDY OF FAILURE TO PAY OR DELIVER. The ISDA Form Master
Agreement is hereby amended by replacing the word "third" in the
third line of Section 5(a)(i) by the word "second".
(o) "AFFILIATE" will have the meaning specified in Section 14 of the
ISDA Form Master Agreement, provided that the Counterparty shall
not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii).
(p) TRUSTEE'S CAPACITY. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by
the Trustee (i) this Confirmation is executed and delivered by
LaSalle Bank National Association, not in its individual capacity
but solely as Trustee pursuant to the Pooling and Servicing
Agreement in the exercise of the powers and authority conferred
and vested in it thereunder and pursuant to instruction set forth
therein (ii) each of the representations, undertakings and
agreements herein made on behalf of the trust is made and
intended not as a personal representation, undertaking or
agreement of the Trustee but is made and intended for the purpose
of binding only the Counterparty, and (iii) under no
circumstances will LaSalle Bank National Association, in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach
or failure of any obligation, representation, warranty or
covenant made or undertaken under this Confirmation.
(q) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as
Trustee, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this letter agreement as Trustee on behalf of the
Counterparty.
(r) AMENDMENT TO POOLING AND SERVICING AGREEMENT. Notwithstanding any
provisions to the contrary in the Pooling and Servicing
Agreement, none of the Depositor, the Servicer or the Trustee
shall enter into any amendment thereto
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which could have a material adverse affect on BNY without the
prior written consent of BNY.
6) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding,
before the close parenthesis in the introductory sentence thereof, the
words ", and, in the case of the representations in Section 3(i), at
all times", and, at the end thereof, the following Sections 3(g), 3(h)
and 3(i):
"(g) RELATIONSHIP BETWEEN PARTIES.
(1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(i) Each Party acknowledges that LaSalle Bank National
Association, has been directed under the Pooling and
Servicing Agreement to enter into this Transaction as
Trustee on behalf of the Counterparty.
(ii) It is acting for its own account and has the capacity
to evaluate (internally or through independent
professional advice) the Transaction and has made its
own decision to enter into the Transaction; it is not
relying on any communication (written or oral) of the
other party as investment advice or as a recommendation
to enter into such transaction; it being understood
that information and explanations related to the terms
and conditions of such transaction shall not be
considered investment advice or a recommendation to
enter into such transaction. No communication (written
or oral) received from the other party shall be deemed
to be an assurance or guarantee as to the expected
results of the transaction; and
(iii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those
terms and conditions and to assume (and does, in fact
assume) those risks, financially and otherwise.
(3) PRINCIPAL. The other party is not acting as a fiduciary or
an advisor for it in respect of this Transaction.
(h) EXCLUSION FROM COMMODITIES EXCHANGE ACT. (A) It is an "eligible
contract participant" within the meaning of Section 1a(12) of the
Commodity Exchange Act, as amended; (B) this Agreement and each
Transaction is subject to individual negotiation by such party;
and (C) neither this Agreement nor any Transaction will be
executed or traded on a "trading facility" within the meaning of
Section 1a(33) of the Commodity Exchange Act, as amended.
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(i) ERISA (PENSION PLANS). It is not a pension plan or employee
benefits plan and it is not using assets of any such plan or
assets deemed to be assets of such a plan in connection with this
Transaction.
7) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreement (but without limiting the provisions of
Section 2(c) and Section 6, except as provided in the next sentence),
each party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition payment
or performance of any obligation between it and the other party
hereunder against any obligation between it and the other party under
any other agreements. The last sentence of the first paragraph of
Section 6(e) shall not apply for purposes of this Transaction.
8) ADDITIONAL TERMINATION EVENTS. The following Additional Termination
Events will apply, in each case with respect to BNY as the sole
Affected Party (unless otherwise provided below):
(i) REMEDY OF RATINGS EVENTS. BNY fails to comply with the provisions
of Paragraph 9.
(ii) AMENDMENT OF POOLING AND SERVICING AGREEMENT WITHOUT CONSENT OF
BNY. If the Trustee permits the Pooling and Servicing Agreement
to be amended in a manner which could have a material adverse
affect on BNY without first obtaining the prior written consent
of BNY. The Counterparty shall be the sole Affected Party with
respect to the occurrence of a Termination Event described in
this Paragraph 8(ii).
(iii) FAILURE TO PROVIDE INFORMATION REQUIRED BY REGULATION AB. If the
Depositor under the Pooling and Servicing Agreement still has a
reporting obligation with respect to this Transaction pursuant to
Regulation AB under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended ("REGULATION AB")
and BNY has not, within 30 days after receipt of a Swap
Disclosure Request complied with the provisions set forth below
in this Paragraph 4(8)(iii) (provided that if the significance
percentage reaches 10% after a Swap Disclosure Request has been
made to BNY, BNY must comply with the provisions set forth below
in this Section 4(8)(iii) within 10 days of BNY being informed of
the significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to BNY and BNY
shall be the sole Affected Party with respect to such Additional
Termination Event.
BNY acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB,
the Depositor is required under Regulation AB to disclose certain
information set forth in Regulation AB regarding BNY or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other
derivative contracts between BNY or its group of affiliated
entities, if applicable, and the Counterparty, as calculated from
time to time in accordance with Item 1115 of Regulation AB.
If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to
nine (9) percent, then the Depositor may request on a Business
Day after the date of such determination
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from BNY the same information set forth in Item 1115(b) of
Regulation AB that would have been required if the significance
percentage had in fact increased to ten (10) percent (such
request, a "SWAP DISCLOSURE REQUEST" and such requested
information, subject to the last sentence of this paragraph, is
the "SWAP FINANCIAL DISCLOSURE"). The Counterparty or the
Depositor shall provide BNY with the calculations and any other
information reasonably requested by BNY with respect to the
Depositor's determination that led to the Swap Disclosure
Request. The parties hereto further agree that the Swap Financial
Disclosure provided to meet the Swap Disclosure Request may be,
solely at BNY's option, either the information set forth in Item
1115(b)(1) or Item 1115(b)(2) of Regulation AB.
Upon the occurrence of a Swap Disclosure Request, BNY, at its own
expense, shall (x) provide the Depositor with the Swap Financial
Disclosure, or (y) subject to Rating Agency Confirmation, secure
another entity to replace BNY as party to this Agreement on terms
substantially similar to this Agreement which entity is able to
provide the Swap Financial Disclosure. If permitted by Regulation
AB, any required Swap Financial Disclosure may be provided by
incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
9) PROVISIONS RELATING TO DOWNGRADE OF BNY DEBT RATINGS.
(i) For purposes of this Transaction:
(a) A "COLLATERALIZATION RATINGS EVENT" shall occur with respect
to BNY (or any applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is reduced to "P-1 on watch for downgrade" or below,
and its long-term unsecured and unsubordinated debt is
reduced to "A1 on watch for downgrade" or below (or, if
it has no short-term unsecured and unsubordinated debt
rating, its long term rating is reduced to "Aa3 on
watch for downgrade" or below) by Xxxxx'x, or
(y) its short-term unsecured and unsubordinated debt rating
is reduced below "A-1" by S&P.
Such ratings are referred to herein as the "QUALIFYING
RATINGS."
(b) A "RATINGS EVENT" shall occur with respect to BNY (or any
applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is withdrawn or reduced to "P-2" or below by Xxxxx'x
and its long-term unsecured and unsubordinated debt is
reduced to "A3" or below (or, if it has no short-term
unsecured and unsubordinated debt rating, its long term
rating is reduced to "A2" or below) by Xxxxx'x, or
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(y) its long-term unsecured and unsubordinated debt rating
is withdrawn or reduced below "BBB-" by S&P.
For purposes of (a) and (b) above, such events include those
occurring in connection with a merger, consolidation or
other similar transaction by BNY or any applicable credit
support provider, but they shall be deemed not to occur if,
within 30 days thereafter, each of Xxxxx'x and S&P has
reconfirmed the ratings of the Certificates, as applicable,
which were in effect immediately prior thereto. For the
avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that BNY does not post
sufficient collateral.
(c) "RATING AGENCY CONDITION" means, with respect to any
particular proposed act or omission to act hereunder, that
the Trustee shall have received prior written confirmation
from each of Xxxxx'x and S&P, and shall have provided notice
thereof to BNY, that the proposed action or inaction would
not cause a downgrade or withdrawal of their then-current
ratings of the Certificates.
(ii) Subject, in each case set forth in (a) and (b) below, to
satisfaction of the Rating Agency Condition:
(a) COLLATERALIZATION RATINGS EVENT. If a Collateralization
Ratings Event occurs with respect to BNY (or any applicable
credit support provider), then BNY shall, at its own
expense, and subject to rating agency confirmation within
thirty (30) days of such Collateralization Ratings Event:
(w) post collateral under agreements and other instruments
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, and
satisfactory to Xxxxx'x and S&P, which will be
sufficient to restore the immediately prior ratings of
the Certificates,
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably
N-12
withheld and satisfactory to Xxxxx'x and S&P which will
be sufficient to restore the immediately prior ratings
of their Certificates.
(b) RATINGS EVENT. If a Ratings Event occurs with respect to BNY
(or any applicable credit support provider), then BNY shall,
at its own expense, and subject to rating agency
confirmation within ten (10) Business Days of such Ratings
Event:
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld and satisfactory to Moody's
and S&P which will be sufficient to restore the
immediately prior ratings of their Certificates.
10) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6
of the ISDA Form Master Agreement, if the Counterparty has satisfied
its payment obligations under Section 2(a)(i) of the ISDA Form Master
Agreement, and shall, at the time, have no future payment or delivery
obligation, whether absolute or contingent, then unless BNY is
required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of
the Counterparty any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the ISDA Form Master Agreement with
respect to the Counterparty shall not constitute an Event of Default
or Potential Event of Default with respect to the Counterparty as the
Defaulting Party and (b) BNY shall be entitled to designate an Early
Termination Date pursuant to Section 6 of the ISDA Form Master
Agreement only as a result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form Master Agreement
with respect to BNY as the Affected Party or Section 5(b)(iii) of the
ISDA Form Master Agreement with respect to BNY as the Burdened Party.
11) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Xxxxxxx Xxxxx
Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts
paid hereunder are not intended to benefit the holder of any class of
certificates rated by any rating agency if such holder is MLML or any
of its affiliates. If MLML or any of its affiliates receives any such
amounts, it will promptly remit (or, if such amounts are received by
an affiliate of MLML, MLML hereby agrees that it will cause such
affiliate to promptly remit) such
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amounts to the Trustee, whereupon such Trustee will promptly remit
such amounts to BNY. MLML further agrees to provide notice to BNY upon
any remittance to the trustee.
12) BNY PAYMENTS TO BE MADE TO TRUSTEE. BNY will, unless otherwise
directed by the Trustee, make all payments hereunder to the Trustee.
Payment made to the Trustee at the account specified herein or to
another account specified in writing by the Trustee shall satisfy the
payment obligations of BNY hereunder to the extent of such payment.
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
Payments to BNY:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #
Account #
Reference: Interest Rate Swap
Payments to Counterparty:
LaSalle Bank N.A.
ABA #
Acct #:
Ref: Ownit 2006-4 Cap Account
6. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxx Au-Xxxxx at 000-000-0000/5837.
Once we receive this we will send you two original confirmations for execution.
N-14
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
BY:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The Counterparty, acting through its duly authorized signatory, hereby
agrees to, accepts and confirms the terms of the foregoing as of the Trade Date.
OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY: LASALLE BANK, NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEE
ON BEHALF OF OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraph 4(11)
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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SCHEDULE I
All dates subject to adjustment in accordance with the Modified Following
Business Day Convention.
N-16
EXHIBIT N-2
FORM OF CLASS A-2 CAP CONTRACT
Dated: June __, 2006
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. [37612]
Ladies and Gentlemen:
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms
and conditions of the rate Cap Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between The Bank of New York ("BNY"), a
trust company duly organized and existing under the laws of the State of New
York, and the Ownit Mortgage Loan Asset-Backed Certificates Series 2006-4 (the
"COUNTERPARTY"), as represented by LaSalle Bank National Association, not in its
individual capacity, but solely as Trustee under the Pooling and Servicing
Agreement, dated and effective June 1, 2006, among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as Depositor, Xxxxxx Loan Servicing LP, as Servicer, and
LaSalle Bank National Association, as Trustee (the "POOLING AND SERVICING
AGREEMENT"). This Agreement, which evidences a complete and binding agreement
between you and us to enter into the Transaction on the terms set forth below,
constitutes a "CONFIRMATION" as referred to in the "ISDA FORM MASTER AGREEMENT"
(as defined below), as well as a "Schedule" as referred to in the ISDA Form
Master Agreement.
1. FORM OF AGREEMENT. This Agreement is subject to the 2000 ISDA Definitions
(the "DEFINITIONS"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). You and we have agreed to enter
into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA
Master Agreement (Multicurrency--Cross Border) form (the "ISDA FORM MASTER
AGREEMENT"). An ISDA Form Master Agreement, as modified by the Schedule
terms in Paragraph 4 of this Confirmation (the "MASTER AGREEMENT"), shall
be deemed to have been executed by you and us on the date we entered into
the Transaction. Except as otherwise specified, references herein to
Sections shall be to Sections of the ISDA Form Master Agreement and the
Master Agreement, and references to Paragraphs shall be to paragraphs of
this Agreement. Each party hereto agrees that the Master Agreement deemed
to have been executed by the parties hereto shall be the same Master
Agreement referred to in the agreement setting forth the terms of
transaction reference numbers [37610, 37611 and 37613]. In the event of any
inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Capitalized terms not otherwise defined herein
or in the Definitions or the Master Agreement shall have the meaning
defined for such term in the Pooling and Servicing Agreement.
2. CERTAIN TERMS. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any Calculation Period the
amount set forth for such period on Schedule I
attached hereto.
Trade Date: June 30, 2006
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Effective Date: June 26, 2006
Termination Date: December 25, 2006, subject to adjustment in
accordance with the Modified Following
Business Day Convention.
FLOATING AMOUNTS
Floating Rate Payer: BNY
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Day Count
Fraction: Actual/360
Floating Rate Option: USD-LIBOR-BBA, provided, however, if the
Floating Rate Option for a Calculation Period
is greater than [10.28]% (as set forth for
such period on Schedule I attached hereto)
then the Floating Rate Option for such
Calculation Period shall be deemed equal to
[10.28]%.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on
December 25, 2006 and ending on the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The
Floating Rate Payer Payment Date shall be two
(2) Business Days preceding each Floating Rate
Payer Period End Date.
Reset Dates: The first day of each Calculation Period or
Compounding Period, if Compounding is
applicable.
Compounding: Inapplicable
Business Days for Payments
By both parties: New York
Calculation Agent: BNY
3. ADDITIONAL PROVISIONS:
N-2
1) RELIANCE. Each party hereto is hereby advised and acknowledges that the
other party has engaged in (or refrained from engaging in) substantial
financial transactions and has taken (or refrained from taking) other
material actions in reliance upon the entry by the parties into the
Transaction being entered into on the terms and conditions set forth
herein.
2) TRANSFER, AMENDMENT AND ASSIGNMENT. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall be
permitted by either party unless each of Standard & Poor's Ratings Service,
a division of The XxXxxx-Xxxx Companies, Inc ("S&P") and Xxxxx'x Investors
Service, Inc. ("MOODY'S"), has been provided notice of the same and
confirms in writing (including by facsimile transmission) that it will not
downgrade, qualify, withdraw or otherwise modify its then-current ratings
on the Certificates issued under the Pooling and Servicing Agreement (the
"CERTIFICATES").
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
2) NO NETTING BETWEEN TRANSACTIONS. The parties agree that subparagraph
(ii) of Section 2(c) will apply to any Transaction.
2) TERMINATION PROVISIONS. Subject to the provisions of Paragraph 4(10)
below, for purposes of the Master Agreement:
(a) "SPECIFIED ENTITY" is not applicable to BNY or the Counterparty
for any purpose.
(b) The "BREACH OF AGREEMENT" provision of Section 5(a)(ii) will not
apply to BNY or the Counterparty.
(c) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
not apply to BNY (except with respect to credit support furnished
pursuant to Paragraph 4 9) below or the Counterparty.
(d) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not
apply to BNY or the Counterparty.
(e) "DEFAULT UNDER SPECIFIED TRANSACTION" is not applicable to BNY or
the Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BNY or the Counterparty.
(f) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply
to BNY or to the Counterparty.
(g) The "BANKRUPTCY" provisions of Section 5(a)(vii)(2) will not
apply to the Counterparty; the words "trustee" and "custodian" in
Section 5(a)(vii)(6) will not include the Trustee; and the words
"specifically authorized " are inserted before the word "action"
in Section 5(a)(vii)(9).
(h) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will not apply to BNY or the Counterparty.
(i) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will
not apply to BNY or to the Counterparty.
N-2
(j) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "TERMINATION CURRENCY" means United States Dollars.
(l) NO ADDITIONAL AMOUNTS PAYABLE BY COUNTERPARTY. The Counterparty
shall not be required to pay any additional amounts pursuant to
Section 2(d)(i)(4) or 2(d)(ii).
3) TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), BNY and
the Counterparty make the following representations:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e)) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement contained in Section 4
(a)(i) or 4(a)(iii) and the accuracy and effectiveness of
any document provided by the other party pursuant to Section
4 (a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d), provided that it shall not be a
breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material
prejudice of its legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f), BNY and
the Counterparty make the following representations.
(i) The following representation will apply to BNY:
(x) It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) for United States federal income tax purposes,
(y) it is a trust company duly organized and existing under
the laws of the State of New York, and (y) its U.S. taxpayer
identification number is 000000000.
(ii) The following representation will apply to the Counterparty:
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It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations) for
United States federal income tax purposes.
4) DOCUMENTS TO BE DELIVERED. FOR THE PURPOSE OF SECTION 4(A):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO DATE BY COVERED BY
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE WHICH TO BE DELIVERED SECTION 3(D) REPRESENTATION
---------------- ----------------------------------------- ---------------------- ---------------------------
BNY and Counterparty Any document required or reasonably Upon the execution and Yes
requested to allow the other party to delivery of this
make payments under this Agreement Agreement
without any deduction or withholding for
or on the account of any tax.
(b) Other documents to be delivered are:
PARTY REQUIRED TO DATE BY COVERED BY
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE WHICH TO BE DELIVERED SECTION 3(D) REPRESENTATION
---------------- ----------------------------------------- ---------------------- ---------------------------
BNY A certificate of an authorized officer of Upon the execution and Yes
the party, as to the incumbency and delivery of this
authority of the respective officers of Agreement
the party signing this Agreement, any
relevant Credit Support Document, or any
Confirmation, as the case may be.
Counterparty (i) a copy of the executed Pooling and Upon the execution and Yes
Servicing Agreement, and (ii) an delivery of this
incumbency certificate verifying the true Agreement
signatures and authority of the person or
persons signing this letter agreement on
behalf of the Counterparty.
BNY A copy of the most recent publicly Promptly after request Yes
available regulatory call report. by the other party
BNY Legal Opinion as to enforceability of the Upon the execution and Yes
Swap Agreement. delivery of this
Agreement.
Counterparty Certified copy of the Board of Directors Upon the execution and Yes
resolution (or equivalent authorizing delivery of this
documentation) which sets forth the Agreement.
authority of each signatory to the
Confirmation signing on its behalf and
the authority of such party to enter into
Transactions contemplated and performance
of its obligations hereunder.
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5) MISCELLANEOUS.
(a) ADDRESS FOR NOTICES: For the purposes of Section 12(a):
Address for notices or communications to BNY:
The Bank of New York
Swaps and Derivative Products Group
Global Market Division
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
with a copy to:
The Bank of New York
Swaps and Derivative Products Group
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Tele: 000-000-0000
Fax: 000-000-0000/5837
(For all purposes)
Address for notices or communications to the Counterparty:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: OWNIT 2006-4
Tele: 000-000-0000
Fax: 000-000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
BNY appoints as its Process Agent: Not Applicable
The Counterparty appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will not apply to this
Agreement; neither BNY nor the Counterparty have any Offices
other than as set forth in the Notices Section and BNY agrees
that, for purposes of Section 6(b), it shall not in future have
any Office other than one in the United States.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
BNY is not a Multibranch Party.
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The Counterparty is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is BNY.
(f) CREDIT SUPPORT DOCUMENT. Not applicable for either BNY (except
with respect to credit support furnished
pursuant to Paragraph 9) or the
Counterparty.
(g) CREDIT SUPPORT PROVIDER.
BNY: Not Applicable (except with respect to
credit support furnished pursuant to
Paragraph 9)
Counterparty: Not Applicable
(h) GOVERNING LAW. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i) SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) RECORDING OF CONVERSATIONS. Each party (i) consents to the
recording of telephone conversations between the trading,
marketing and other relevant personnel of the parties in
connection with this Agreement or any potential Transaction, (ii)
agrees to obtain any necessary consent of, and give any necessary
notice of such recording to, its relevant personnel and (iii)
agrees, to the extent permitted by applicable law, that
recordings may be submitted in evidence in any Proceedings.
(k) WAIVER OF JURY TRIAL. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(l) NON-RECOURSE. Notwithstanding any provision herein or in the ISDA
Form Master Agreement to the contrary, the obligations of the
Counterparty hereunder are limited recourse obligations of the
Counterparty, payable solely from the
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Trust Fund and the proceeds thereof to satisfy the Counterparty's
obligations hereunder. In the event that the Trust Fund and
proceeds thereof should be insufficient to satisfy all claims
outstanding and following the realization of the Trust Fund and
the distribution of the proceeds thereof in accordance with the
Pooling and Servicing Agreement, any claims against or
obligations of the Counterparty under the ISDA Form Master
Agreement or any other confirmation thereunder, still outstanding
shall be extinguished and thereafter not revive. This provision
shall survive the expiration of this Agreement.
(m) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. BNY shall
not institute against or cause any other person to institute
against, or join any other person in instituting against the
Counterparty, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, under any of the laws of
the United States or any other jurisdiction, for a period of one
year and one day (or, if longer, the applicable preference
period) following indefeasible payment in full of the
Certificates. This provision shall survive the expiration of this
Agreement.
(n) REMEDY OF FAILURE TO PAY OR DELIVER. The ISDA Form Master
Agreement is hereby amended by replacing the word "third" in the
third line of Section 5(a)(i) by the word "second".
(o) "AFFILIATE" will have the meaning specified in Section 14 of the
ISDA Form Master Agreement, provided that the Counterparty shall
not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii).
(p) TRUSTEE'S CAPACITY. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by
the Trustee (i) this Confirmation is executed and delivered by
LaSalle Bank National Association, not in its individual capacity
but solely as Trustee pursuant to the Pooling and Servicing
Agreement in the exercise of the powers and authority conferred
and vested in it thereunder and pursuant to instruction set forth
therein (ii) each of the representations, undertakings and
agreements herein made on behalf of the trust is made and
intended not as a personal representation, undertaking or
agreement of the Trustee but is made and intended for the purpose
of binding only the Counterparty, and (iii) under no
circumstances will LaSalle Bank National Association, in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach
or failure of any obligation, representation, warranty or
covenant made or undertaken under this Confirmation.
(q) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as
Trustee, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this letter agreement as Trustee on behalf of the
Counterparty.
(r) AMENDMENT TO POOLING AND SERVICING AGREEMENT. Notwithstanding any
provisions to the contrary in the Pooling and Servicing
Agreement, none of the Depositor, the Servicer or the Trustee
shall enter into any amendment thereto
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which could have a material adverse affect on BNY without the
prior written consent of BNY.
6) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding,
before the close parenthesis in the introductory sentence thereof, the
words ", and, in the case of the representations in Section 3(i), at
all times", and, at the end thereof, the following Sections 3(g), 3(h)
and 3(i):
"(g) RELATIONSHIP BETWEEN PARTIES.
(1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(ii) Each Party acknowledges that LaSalle Bank National
Association, has been directed under the Pooling and
Servicing Agreement to enter into this Transaction as
Trustee on behalf of the Counterparty.
(ii) It is acting for its own account and has the capacity
to evaluate (internally or through independent
professional advice) the Transaction and has made its
own decision to enter into the Transaction; it is not
relying on any communication (written or oral) of the
other party as investment advice or as a recommendation
to enter into such transaction; it being understood
that information and explanations related to the terms
and conditions of such transaction shall not be
considered investment advice or a recommendation to
enter into such transaction. No communication (written
or oral) received from the other party shall be deemed
to be an assurance or guarantee as to the expected
results of the transaction; and
(iii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those
terms and conditions and to assume (and does, in fact
assume) those risks, financially and otherwise.
(3) PRINCIPAL. The other party is not acting as a fiduciary or
an advisor for it in respect of this Transaction.
(h) EXCLUSION FROM COMMODITIES EXCHANGE ACT. (A) It is an "eligible
contract participant" within the meaning of Section 1a(12) of the
Commodity Exchange Act, as amended; (B) this Agreement and each
Transaction is subject to individual negotiation by such party;
and (C) neither this Agreement nor any Transaction will be
executed or traded on a "trading facility" within the meaning of
Section 1a(33) of the Commodity Exchange Act, as amended.
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(i) ERISA (PENSION PLANS). It is not a pension plan or employee
benefits plan and it is not using assets of any such plan or
assets deemed to be assets of such a plan in connection with this
Transaction.
7) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreement (but without limiting the provisions of
Section 2(c) and Section 6, except as provided in the next sentence),
each party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition payment
or performance of any obligation between it and the other party
hereunder against any obligation between it and the other party under
any other agreements. The last sentence of the first paragraph of
Section 6(e) shall not apply for purposes of this Transaction.
8) ADDITIONAL TERMINATION EVENTS. The following Additional Termination
Events will apply, in each case with respect to BNY as the sole
Affected Party (unless otherwise provided below):
(i) REMEDY OF RATINGS EVENTS. BNY fails to comply with the provisions
of Paragraph 9.
(ii) AMENDMENT OF POOLING AND SERVICING AGREEMENT WITHOUT CONSENT OF
BNY. If the Trustee permits the Pooling and Servicing Agreement
to be amended in a manner which could have a material adverse
affect on BNY without first obtaining the prior written consent
of BNY. The Counterparty shall be the sole Affected Party with
respect to the occurrence of a Termination Event described in
this Paragraph 8(ii).
(iii) FAILURE TO PROVIDE INFORMATION REQUIRED BY REGULATION AB. If the
Depositor under the Pooling and Servicing Agreement still has a
reporting obligation with respect to this Transaction pursuant to
Regulation AB under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended ("REGULATION AB")
and BNY has not, within 30 days after receipt of a Swap
Disclosure Request complied with the provisions set forth below
in this Paragraph 4(8)(iii) (provided that if the significance
percentage reaches 10% after a Swap Disclosure Request has been
made to BNY, BNY must comply with the provisions set forth below
in this Section 4(8)(iii) within 10 days of BNY being informed of
the significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to BNY and BNY
shall be the sole Affected Party with respect to such Additional
Termination Event.
BNY acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB,
the Depositor is required under Regulation AB to disclose certain
information set forth in Regulation AB regarding BNY or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other
derivative contracts between BNY or its group of affiliated
entities, if applicable, and the Counterparty, as calculated from
time to time in accordance with Item 1115 of Regulation AB.
If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to
nine (9) percent, then the Depositor may request on a Business
Day after the date of such determination
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from BNY the same information set forth in Item 1115(b) of
Regulation AB that would have been required if the significance
percentage had in fact increased to ten (10) percent (such
request, a "SWAP DISCLOSURE REQUEST" and such requested
information, subject to the last sentence of this paragraph, is
the "SWAP FINANCIAL DISCLOSURE"). The Counterparty or the
Depositor shall provide BNY with the calculations and any other
information reasonably requested by BNY with respect to the
Depositor's determination that led to the Swap Disclosure
Request. The parties hereto further agree that the Swap Financial
Disclosure provided to meet the Swap Disclosure Request may be,
solely at BNY's option, either the information set forth in Item
1115(b)(1) or Item 1115(b)(2) of Regulation AB.
Upon the occurrence of a Swap Disclosure Request, BNY, at its own
expense, shall (x) provide the Depositor with the Swap Financial
Disclosure, or (y) subject to Rating Agency Confirmation, secure
another entity to replace BNY as party to this Agreement on terms
substantially similar to this Agreement which entity is able to
provide the Swap Financial Disclosure. If permitted by Regulation
AB, any required Swap Financial Disclosure may be provided by
incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
9) PROVISIONS RELATING TO DOWNGRADE OF BNY DEBT RATINGS.
(i) For purposes of this Transaction:
(a) A "COLLATERALIZATION RATINGS EVENT" shall occur with respect
to BNY (or any applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is reduced to "P-1 on watch for downgrade" or below,
and its long-term unsecured and unsubordinated debt is
reduced to "A1 on watch for downgrade" or below (or, if
it has no short-term unsecured and unsubordinated debt
rating, its long term rating is reduced to "Aa3 on
watch for downgrade" or below) by Moody's, or
(y) its short-term unsecured and unsubordinated debt rating
is reduced below "A-1" by S&P.
Such ratings are referred to herein as the "QUALIFYING
RATINGS."
(b) A "RATINGS EVENT" shall occur with respect to BNY (or any
applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is withdrawn or reduced to "P-2" or below by Moody's
and its long-term unsecured and unsubordinated debt is
reduced to "A3" or below (or, if it has no short-term
unsecured and unsubordinated debt rating, its long term
rating is reduced to "A2" or below) by Moody's, or
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(y) its long-term unsecured and unsubordinated debt rating
is withdrawn or reduced below "BBB-" by S&P.
For purposes of (a) and (b) above, such events include those
occurring in connection with a merger, consolidation or
other similar transaction by BNY or any applicable credit
support provider, but they shall be deemed not to occur if,
within 30 days thereafter, each of Moody's and S&P has
reconfirmed the ratings of the Certificates, as applicable,
which were in effect immediately prior thereto. For the
avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that BNY does not post
sufficient collateral.
(c) "RATING AGENCY CONDITION" means, with respect to any
particular proposed act or omission to act hereunder, that
the Trustee shall have received prior written confirmation
from each of Moody's and S&P, and shall have provided
notice thereof to BNY, that the proposed action or inaction
would not cause a downgrade or withdrawal of their
then-current ratings of the Certificates.
(ii) Subject, in each case set forth in (a) and (b) below, to
satisfaction of the Rating Agency Condition:
(a) COLLATERALIZATION RATINGS EVENT. If a Collateralization
Ratings Event occurs with respect to BNY (or any applicable
credit support provider), then BNY shall, at its own
expense, and subject to rating agency confirmation within
thirty (30) days of such Collateralization Ratings Event:
(w) post collateral under agreements and other instruments
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, and
satisfactory to Moody's and S&P, which will be
sufficient to restore the immediately prior ratings of
the Certificates,
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably
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withheld and satisfactory to Moody's and S&P which will
be sufficient to restore the immediately prior ratings
of their Certificates.
(b) RATINGS EVENT. If a Ratings Event occurs with respect to BNY
(or any applicable credit support provider), then BNY shall,
at its own expense, and subject to rating agency
confirmation within ten (10) Business Days of such Ratings
Event:
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld and satisfactory to Moody's
and S&P which will be sufficient to restore the
immediately prior ratings of their Certificates.
10) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6
of the ISDA Form Master Agreement, if the Counterparty has satisfied
its payment obligations under Section 2(a)(i) of the ISDA Form Master
Agreement, and shall, at the time, have no future payment or delivery
obligation, whether absolute or contingent, then unless BNY is
required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of
the Counterparty any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the ISDA Form Master Agreement with
respect to the Counterparty shall not constitute an Event of Default
or Potential Event of Default with respect to the Counterparty as the
Defaulting Party and (b) BNY shall be entitled to designate an Early
Termination Date pursuant to Section 6 of the ISDA Form Master
Agreement only as a result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form Master Agreement
with respect to BNY as the Affected Party or Section 5(b)(iii) of the
ISDA Form Master Agreement with respect to BNY as the Burdened Party.
11) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Xxxxxxx Xxxxx
Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts
paid hereunder are not intended to benefit the holder of any class of
certificates rated by any rating agency if such holder is MLML or any
of its affiliates. If MLML or any of its affiliates receives any such
amounts, it will promptly remit (or, if such amounts are received by
an affiliate of MLML, MLML hereby agrees that it will cause such
affiliate to promptly remit) such
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amounts to the Trustee, whereupon such Trustee will promptly remit
such amounts to BNY. MLML further agrees to provide notice to BNY upon
any remittance to the trustee.
12) BNY PAYMENTS TO BE MADE TO TRUSTEE. BNY will, unless otherwise
directed by the Trustee, make all payments hereunder to the Trustee.
Payment made to the Trustee at the account specified herein or to
another account specified in writing by the Trustee shall satisfy the
payment obligations of BNY hereunder to the extent of such payment.
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
Payments to BNY:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #
Account #
Reference: Interest Rate Swap
Payments to Counterparty:
LaSalle Bank N.A.
ABA #
Acct #:
Ref: Ownit 2006-4 Cap Account
6. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxx Au-Xxxxx at 000-000-0000/5837.
Once we receive this we will send you two original confirmations for execution.
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We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
BY:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The Counterparty, acting through its duly authorized signatory, hereby
agrees to, accepts and confirms the terms of the foregoing as of the Trade Date.
OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY: LASALLE BANK, NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEE
ON BEHALF OF OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraph 4(11)
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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SCHEDULE I
All dates subject to adjustment in accordance with the Modified Following
Business Day Convention.
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EXHIBIT N-3
FORM OF SUBORDINATE CERTIFICATES CAP CONTRACT
Dated: June __, 2006
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. [37613]
Ladies and Gentlemen:
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms
and conditions of the rate Cap Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between The Bank of New York ("BNY"), a
trust company duly organized and existing under the laws of the State of New
York, and the Ownit Mortgage Loan Asset-Backed Certificates Series 2006-4 (the
"COUNTERPARTY"), as represented by LaSalle Bank National Association, not in its
individual capacity, but solely as Trustee under the Pooling and Servicing
Agreement, dated and effective June 1, 2006, among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as Depositor, Xxxxxx Loan Servicing LP, as Servicer and LaSalle
Bank National Association, as Trustee (the "POOLING AND SERVICING AGREEMENT").
This Agreement, which evidences a complete and binding agreement between you and
us to enter into the Transaction on the terms set forth below, constitutes a
"CONFIRMATION" as referred to in the "ISDA FORM MASTER AGREEMENT" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. FORM OF AGREEMENT. This Agreement is subject to the 2000 ISDA Definitions
(the "DEFINITIONS"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). You and we have agreed to enter
into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA
Master Agreement (Multicurrency--Cross Border) form (the "ISDA FORM MASTER
AGREEMENT"). An ISDA Form Master Agreement, as modified by the Schedule
terms in Paragraph 4 of this Confirmation (the "MASTER AGREEMENT"), shall
be deemed to have been executed by you and us on the date we entered into
the Transaction. Except as otherwise specified, references herein to
Sections shall be to Sections of the ISDA Form Master Agreement and the
Master Agreement, and references to Paragraphs shall be to paragraphs of
this Agreement. Each party hereto agrees that the Master Agreement deemed
to have been executed by the parties hereto shall be the same Master
Agreement referred to in the agreement setting forth the terms of
transaction reference numbers [37610, 37611 and 37612]. In the event of any
inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Capitalized terms not otherwise defined herein
or in the Definitions or the Master Agreement shall have the meaning
defined for such term in the Pooling and Servicing Agreement.
2. CERTAIN TERMS. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Cap
Notional Amount: USD [86,580,000.00]
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Trade Date: June 30, 2006
Effective Date: June 26, 2006
Termination Date: December 25, 2006, subject to adjustment in
accordance with the Modified Following Business
Day Convention.
FLOATING AMOUNTS
Floating Rate Payer: BNY
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Day Count
Fraction: Actual/360
Floating Rate Option: USD-LIBOR-BBA, provided, however, if the
Floating Rate Option for a Calculation Period is
greater than [8.94]% (as set forth for such
period on Schedule I attached hereto) then the
Floating Rate Option for such Calculation Period
shall be deemed equal to [8.94]%.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on
December 25, 2006 and ending on the Termination
Date, subject to adjustment in accordance with
the Modified Following Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The Floating
Rate Payer Payment Date shall be two (2)
Business Days preceding each Floating Rate Payer
Period End Date.
Reset Dates: The first day of each Calculation Period or
Compounding Period, if Compounding is
applicable.
Compounding: Inapplicable
Business Days for Payments
By both parties: New York
Calculation Agent: BNY
3. ADDITIONAL PROVISIONS:
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1) RELIANCE. Each party hereto is hereby advised and acknowledges that
the other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained from
taking) other material actions in reliance upon the entry by the
parties into the Transaction being entered into on the terms and
conditions set forth herein.
2) TRANSFER, AMENDMENT AND ASSIGNMENT. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall
be permitted by either party unless each of Standard & Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc ("S&P") and
Xxxxx'x Investors Service, Inc. ("MOODY'S"), has been provided notice
of the same and confirms in writing (including by facsimile
transmission) that it will not downgrade, qualify, withdraw or
otherwise modify its then-current ratings on the Certificates issued
under the Pooling and Servicing Agreement (the "CERTIFICATES").
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
3) NO NETTING BETWEEN TRANSACTIONS. The parties agree that subparagraph
(ii) of Section 2(c) will apply to any Transaction.
2) TERMINATION PROVISIONS. Subject to the provisions of Paragraph 4(10)
below, for purposes of the Master Agreement:
(a) "SPECIFIED ENTITY" is not applicable to BNY or the Counterparty
for any purpose.
(b) The "BREACH OF AGREEMENT" provision of Section 5(a)(ii) will not
apply to BNY or the Counterparty.
(c) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
not apply to BNY (except with respect to credit support furnished
pursuant to Paragraph 4 9) below or the Counterparty.
(d) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not
apply to BNY or the Counterparty.
(e) "DEFAULT UNDER SPECIFIED TRANSACTION" is not applicable to BNY or
the Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BNY or the Counterparty.
(f) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply
to BNY or to the Counterparty.
(g) The "BANKRUPTCY" provisions of Section 5(a)(vii)(2) will not
apply to the Counterparty; the words "trustee" and "custodian" in
Section 5(a)(vii)(6) will not include the Trustee; and the words
"specifically authorized " are inserted before the word "action"
in Section 5(a)(vii)(9).
(h) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will not apply to BNY or the Counterparty.
(i) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will
not apply to BNY or to the Counterparty.
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(j) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "TERMINATION CURRENCY" means United States Dollars.
(l) NO ADDITIONAL AMOUNTS PAYABLE BY COUNTERPARTY. The Counterparty
shall not be required to pay any additional amounts pursuant to
Section 2(d)(i)(4) or 2(d)(ii).
3) TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), BNY and
the Counterparty make the following representations:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e)) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement contained in Section 4
(a)(i) or 4(a)(iii) and the accuracy and effectiveness of
any document provided by the other party pursuant to Section
4 (a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d), provided that it shall not be a
breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material
prejudice of its legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f), BNY and
the Counterparty make the following representations.
(i) The following representation will apply to BNY:
(x) It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) for United States federal income tax purposes,
(y) it is a trust company duly organized and existing under
the laws of the State of New York, and (y) its U.S. taxpayer
identification number is 000000000.
(ii) The following representation will apply to the Counterparty:
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It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations)
for United States federal income tax purposes.
4) DOCUMENTS TO BE DELIVERED. FOR THE PURPOSE OF SECTION 4(A):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO DATE BY WHICH COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE TO BE DELIVERED 3(D) REPRESENTATION
----------------- -------------------------------------------------------------- ------------------------- -------------------
BNY and Any document required or reasonably requested to allow the Upon the execution and Yes
Counterparty other party to make payments under this Agreement without delivery of this
any deduction or withholding for or on the account of any tax. Agreement
(b) Other documents to be delivered are:
PARTY REQUIRED TO DATE BY WHICH COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE TO BE DELIVERED 3(D) REPRESENTATION
----------------- -------------------------------------------------------------- ------------------------- -------------------
BNY A certificate of an authorized officer of the party, as to the Upon the execution and Yes
incumbency and authority of the respective officers of the delivery of this
party signing this Agreement, any relevant Credit Support Agreement
Document, or any Confirmation, as the case may be.
Counterparty (i) a copy of the executed Pooling and Servicing Agreement, Upon the execution and Yes
and (ii) an incumbency certificate verifying the true delivery of this
signatures and authority of the person or persons signing this Agreement
letter agreement on behalf of the Counterparty.
BNY A copy of the most recent publicly available regulatory call Promptly after request by Yes
report. the other party
BNY Legal Opinion as to enforceability of the Swap Agreement. Upon the execution and Yes
delivery of this
Agreement.
Counterparty Certified copy of the Board of Directors resolution (or Upon the execution and Yes
equivalent authorizing documentation) which sets forth the delivery of this
authority of each signatory to the Confirmation signing on its Agreement.
behalf and the authority of such party to enter into
Transactions contemplated and performance of its obligations
hereunder.
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5) MISCELLANEOUS.
(a) ADDRESS FOR NOTICES: For the purposes of Section 12(a):
Address for notices or communications to BNY:
The Bank of New York
Swaps and Derivative Products Group
Global Market Division
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
with a copy to:
The Bank of New York
Swaps and Derivative Products Group
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Tele: 000-000-0000
Fax: 000-000-0000/5837
(For all purposes)
Address for notices or communications to the Counterparty:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: OWNIT 2006-4
Tele: 000-000-0000
Fax: 000-000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
BNY appoints as its Process Agent: Not Applicable
The Counterparty appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will not apply to this
Agreement; neither BNY nor the Counterparty have any Offices
other than as set forth in the Notices Section and BNY agrees
that, for purposes of Section 6(b), it shall not in future have
any Office other than one in the United States.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
BNY is not a Multibranch Party.
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The Counterparty is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is BNY.
(f) CREDIT SUPPORT DOCUMENT. Not applicable for either BNY (except
with respect to credit support furnished
pursuant to Paragraph 9) or the
Counterparty.
(g) CREDIT SUPPORT PROVIDER.
BNY: Not Applicable (except with respect to
credit support furnished pursuant to
Paragraph 9)
Counterparty: Not Applicable
(h) GOVERNING LAW. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i) SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) RECORDING OF CONVERSATIONS. Each party (i) consents to the
recording of telephone conversations between the trading,
marketing and other relevant personnel of the parties in
connection with this Agreement or any potential Transaction, (ii)
agrees to obtain any necessary consent of, and give any necessary
notice of such recording to, its relevant personnel and (iii)
agrees, to the extent permitted by applicable law, that
recordings may be submitted in evidence in any Proceedings.
(k) WAIVER OF JURY TRIAL. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
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(l) NON-RECOURSE. Notwithstanding any provision herein or in the ISDA
Form Master Agreement to the contrary, the obligations of the
Counterparty hereunder are limited recourse obligations of the
Counterparty, payable solely from the Trust Fund and the proceeds
thereof to satisfy the Counterparty's obligations hereunder. In
the event that the Trust Fund and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the
realization of the Trust Fund and the distribution of the
proceeds thereof in accordance with the Pooling and Servicing
Agreement, any claims against or obligations of the Counterparty
under the ISDA Form Master Agreement or any other confirmation
thereunder, still outstanding shall be extinguished and
thereafter not revive. This provision shall survive the
expiration of this Agreement.
(m) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. BNY shall
not institute against or cause any other person to institute
against, or join any other person in instituting against the
Counterparty, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, under any of the laws of
the United States or any other jurisdiction, for a period of one
year and one day (or, if longer, the applicable preference
period) following indefeasible payment in full of the
Certificates. This provision shall survive the expiration of this
Agreement.
(n) REMEDY OF FAILURE TO PAY OR DELIVER. The ISDA Form Master
Agreement is hereby amended by replacing the word "third" in the
third line of Section 5(a)(i) by the word "second".
(o) "AFFILIATE" will have the meaning specified in Section 14 of the
ISDA Form Master Agreement, provided that the Counterparty shall
not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii).
(p) TRUSTEE'S CAPACITY. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by
the Trustee (i) this Confirmation is executed and delivered by
LaSalle Bank National Association, not in its individual capacity
but solely as Trustee pursuant to the Pooling and Servicing
Agreement in the exercise of the powers and authority conferred
and vested in it thereunder and pursuant to instruction set forth
therein (ii) each of the representations, undertakings and
agreements herein made on behalf of the trust is made and
intended not as a personal representation, undertaking or
agreement of the Trustee but is made and intended for the purpose
of binding only the Counterparty, and (iii) under no
circumstances will LaSalle Bank National Association, in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach
or failure of any obligation, representation, warranty or
covenant made or undertaken under this Confirmation.
(q) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as
Trustee, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this letter agreement as Trustee on behalf of the
Counterparty.
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(r) AMENDMENT TO POOLING AND SERVICING AGREEMENT. Notwithstanding any
provisions to the contrary in the Pooling and Servicing
Agreement, none of the Depositor, the Servicer or the Trustee
shall enter into any amendment thereto which could have a
material adverse affect on BNY without the prior written consent
of BNY.
6) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding,
before the close parenthesis in the introductory sentence thereof, the
words ", and, in the case of the representations in Section 3(i), at
all times", and, at the end thereof, the following Sections 3(g), 3(h)
and 3(i):
"(g) RELATIONSHIP BETWEEN PARTIES.
(1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(iii) Each Party acknowledges that LaSalle Bank National
Association, has been directed under the Pooling and
Servicing Agreement to enter into this Transaction as
Trustee on behalf of the Counterparty.
(ii) It is acting for its own account and has the capacity
to evaluate (internally or through independent
professional advice) the Transaction and has made its
own decision to enter into the Transaction; it is not
relying on any communication (written or oral) of the
other party as investment advice or as a recommendation
to enter into such transaction; it being understood
that information and explanations related to the terms
and conditions of such transaction shall not be
considered investment advice or a recommendation to
enter into such transaction. No communication (written
or oral) received from the other party shall be deemed
to be an assurance or guarantee as to the expected
results of the transaction; and
(iii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those
terms and conditions and to assume (and does, in fact
assume) those risks, financially and otherwise.
(3) PRINCIPAL. The other party is not acting as a fiduciary or
an advisor for it in respect of this Transaction.
(h) EXCLUSION FROM COMMODITIES EXCHANGE ACT. (A) It is an "eligible
contract participant" within the meaning of Section 1a(12) of the
Commodity Exchange Act, as amended; (B) this Agreement and each
Transaction is subject to individual negotiation by such party;
and (C) neither this Agreement nor any Transaction will
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be executed or traded on a "trading facility" within the meaning
of Section 1a(33) of the Commodity Exchange Act, as amended.
(i) ERISA (PENSION PLANS). It is not a pension plan or employee
benefits plan and it is not using assets of any such plan or
assets deemed to be assets of such a plan in connection with this
Transaction.
7) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreement (but without limiting the provisions of
Section 2(c) and Section 6, except as provided in the next sentence),
each party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition payment
or performance of any obligation between it and the other party
hereunder against any obligation between it and the other party under
any other agreements. The last sentence of the first paragraph of
Section 6(e) shall not apply for purposes of this Transaction.
8) ADDITIONAL TERMINATION EVENTS. The following Additional Termination
Events will apply, in each case with respect to BNY as the sole
Affected Party (unless otherwise provided below):
(i) REMEDY OF RATINGS EVENTS. BNY fails to comply with the provisions
of Paragraph 9.
(ii) AMENDMENT OF POOLING AND SERVICING AGREEMENT WITHOUT CONSENT OF
BNY. If the Trustee permits the Pooling and Servicing Agreement
to be amended in a manner which could have a material adverse
affect on BNY without first obtaining the prior written consent
of BNY. The Counterparty shall be the sole Affected Party with
respect to the occurrence of a Termination Event described in
this Paragraph 8(ii).
(iii) FAILURE TO PROVIDE INFORMATION REQUIRED BY REGULATION AB. If the
Depositor under the Pooling and Servicing Agreement still has a
reporting obligation with respect to this Transaction pursuant to
Regulation AB under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended ("REGULATION AB")
and BNY has not, within 30 days after receipt of a Swap
Disclosure Request complied with the provisions set forth below
in this Paragraph 4(8)(iii) (provided that if the significance
percentage reaches 10% after a Swap Disclosure Request has been
made to BNY, BNY must comply with the provisions set forth below
in this Section 4(8)(iii) within 10 days of BNY being informed of
the significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to BNY and BNY
shall be the sole Affected Party with respect to such Additional
Termination Event.
BNY acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB,
the Depositor is required under Regulation AB to disclose certain
information set forth in Regulation AB regarding BNY or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other
derivative contracts between BNY or its group of affiliated
entities, if applicable, and the Counterparty, as calculated from
time to time in accordance with Item 1115 of Regulation AB.
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If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to
nine (9) percent, then the Depositor may request on a Business
Day after the date of such determination from BNY the same
information set forth in Item 1115(b) of Regulation AB that would
have been required if the significance percentage had in fact
increased to ten (10) percent (such request, a "SWAP DISCLOSURE
REQUEST" and such requested information, subject to the last
sentence of this paragraph, is the "SWAP FINANCIAL DISCLOSURE").
The Counterparty or the Depositor shall provide BNY with the
calculations and any other information reasonably requested by
BNY with respect to the Depositor's determination that led to the
Swap Disclosure Request. The parties hereto further agree that
the Swap Financial Disclosure provided to meet the Swap
Disclosure Request may be, solely at BNY's option, either the
information set forth in Item 1115(b)(1) or Item 1115(b)(2) of
Regulation AB.
Upon the occurrence of a Swap Disclosure Request, BNY, at its own
expense, shall (x) provide the Depositor with the Swap Financial
Disclosure, or (y) subject to Rating Agency Confirmation, secure
another entity to replace BNY as party to this Agreement on terms
substantially similar to this Agreement which entity is able to
provide the Swap Financial Disclosure. If permitted by Regulation
AB, any required Swap Financial Disclosure may be provided by
incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
9) PROVISIONS RELATING TO DOWNGRADE OF BNY DEBT RATINGS.
(i) For purposes of this Transaction:
(a) A "COLLATERALIZATION RATINGS EVENT" shall occur with respect
to BNY (or any applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is reduced to "P-1 on watch for downgrade" or below,
and its long-term unsecured and unsubordinated debt is
reduced to "A1 on watch for downgrade" or below (or, if
it has no short-term unsecured and unsubordinated debt
rating, its long term rating is reduced to "Aa3 on
watch for downgrade" or below) by Xxxxx'x, or
(y) its short-term unsecured and unsubordinated debt rating
is reduced below "A-1" by S&P.
Such ratings are referred to herein as the "QUALIFYING
RATINGS."
(b) A "RATINGS EVENT" shall occur with respect to BNY (or any
applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is withdrawn or reduced to "P-2" or below by Xxxxx'x
and its long-term unsecured and unsubordinated debt is
reduced to "A3" or below (or, if it has no short-term
unsecured and
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unsubordinated debt rating, its long term rating is
reduced to "A2" or below) by Xxxxx'x, or
(y) its long-term unsecured and unsubordinated debt rating
is withdrawn or reduced below "BBB-" by S&P.
For purposes of (a) and (b) above, such events include those
occurring in connection with a merger, consolidation or
other similar transaction by BNY or any applicable credit
support provider, but they shall be deemed not to occur if,
within 30 days thereafter, each of Xxxxx'x and S&P has
reconfirmed the ratings of the Certificates, as applicable,
which were in effect immediately prior thereto. For the
avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that BNY does not post
sufficient collateral.
(c) "RATING AGENCY CONDITION" means, with respect to any
particular proposed act or omission to act hereunder, that
the Trustee shall have received prior written confirmation
from each of Xxxxx'x and S&P, and shall have provided
notice thereof to BNY, that the proposed action or inaction
would not cause a downgrade or withdrawal of their
then-current ratings of the Certificates.
(ii) Subject, in each case set forth in (a) and (b) below, to
satisfaction of the Rating Agency Condition:
(a) COLLATERALIZATION RATINGS EVENT. If a Collateralization
Ratings Event occurs with respect to BNY (or any applicable
credit support provider), then BNY shall, at its own
expense, and subject to rating agency confirmation within
thirty (30) days of such Collateralization Ratings Event:
(w) post collateral under agreements and other instruments
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, and
satisfactory to Xxxxx'x and S&P, which will be
sufficient to restore the immediately prior ratings of
the Certificates,
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
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(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld and satisfactory to Xxxxx'x
and S&P which will be sufficient to restore the
immediately prior ratings of their Certificates.
(b) RATINGS EVENT. If a Ratings Event occurs with respect to BNY
(or any applicable credit support provider), then BNY shall,
at its own expense, and subject to rating agency
confirmation within ten (10) Business Days of such Ratings
Event:
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of which) meet or exceed the
Qualifying Ratings, on terms substantially similar to
this Confirmation, which party is approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of,
another person, the ratings of the debt of which (or
the ratings of the debt of the credit support provider
of which) meet or exceed the Qualifying Ratings, to
honor BNY's obligations under this Agreement, provided
that such other person is approved by the Counterparty
and the NIMS Insurer, such approval not to be
unreasonably withheld, or
(z) establish any other arrangement approved by the
Counterparty and the NIMS Insurer, such approval not to
be unreasonably withheld and satisfactory to Xxxxx'x
and S&P which will be sufficient to restore the
immediately prior ratings of their Certificates.
10) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6
of the ISDA Form Master Agreement, if the Counterparty has satisfied
its payment obligations under Section 2(a)(i) of the ISDA Form Master
Agreement, and shall, at the time, have no future payment or delivery
obligation, whether absolute or contingent, then unless BNY is
required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of
the Counterparty any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the ISDA Form Master Agreement with
respect to the Counterparty shall not constitute an Event of Default
or Potential Event of Default with respect to the Counterparty as the
Defaulting Party and (b) BNY shall be entitled to designate an Early
Termination Date pursuant to Section 6 of the ISDA Form Master
Agreement only as a result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form Master Agreement
with respect to BNY as the Affected Party or Section 5(b)(iii) of the
ISDA Form Master Agreement with respect to BNY as the Burdened Party.
11) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Xxxxxxx Xxxxx
Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts
paid hereunder are not intended to benefit the holder of any class of
certificates rated by any rating agency if such holder is MLML or any
of its affiliates. If MLML or any of its affiliates receives
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any such amounts, it will promptly remit (or, if such amounts are
received by an affiliate of MLML, MLML hereby agrees that it will
cause such affiliate to promptly remit) such amounts to the Trustee,
whereupon such Trustee will promptly remit such amounts to BNY. MLML
further agrees to provide notice to BNY upon any remittance to the
trustee.
12) BNY PAYMENTS TO BE MADE TO TRUSTEE. BNY will, unless otherwise
directed by the Trustee, make all payments hereunder to the Trustee.
Payment made to the Trustee at the account specified herein or to
another account specified in writing by the Trustee shall satisfy the
payment obligations of BNY hereunder to the extent of such payment.
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
Payments to BNY:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #
Account #
Reference: Interest Rate Swap
Payments to Counterparty:
LaSalle Bank N.A.
ABA #
Acct #:
Ref: Ownit 2006-4 Cap Account
6. COUNTERPARTS. This Agreement may be executed in several counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxx Au-Xxxxx at 000-000-0000/5837.
Once we receive this we will send you two original confirmations for execution.
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We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
BY:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The Counterparty, acting through its duly authorized signatory, hereby
agrees to, accepts and confirms the terms of the foregoing as of the Trade Date.
OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY: LASALLE BANK, NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEE
ON BEHALF OF OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY:
---------------------------------
Name:
-------------------------------
Title:
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Solely with respect to Paragraph 4(11)
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
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SCHEDULE I
All dates subject to adjustment in accordance with the Modified Following
Business Day Convention.
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EXHIBIT O-1
CLASS A-1 ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 06/26/06 07/25/06 243,564,000 7.467 9.860
2 07/25/06 08/25/06 241,561,614 6.976 9.860
3 08/25/06 09/25/06 238,889,477 6.976 9.860
4 09/25/06 10/25/06 235,550,525 7.213 9.860
5 10/25/06 11/25/06 231,546,141 6.976 9.860
6 11/25/06 12/25/06 226,885,694 7.214 9.860
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 9.860%) exceeds
the Lower Collar, the Issuing Entity will receive payments pursuant to the
Class A-1 Cap Contract.
O-1-1
EXHIBIT O-2
CLASS A-2 ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 06/26/06 07/25/06 384,581,000 7.281 10.500
2 07/25/06 08/25/06 381,477,115 6.802 10.500
3 08/25/06 09/25/06 377,319,742 6.803 10.500
4 09/25/06 10/25/06 372,113,138 7.034 10.500
5 10/25/06 11/25/06 365,859,189 6.803 10.500
6 11/25/06 12/25/06 358,572,263 7.034 10.500
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 10.500%)
exceeds the Lower Collar, the Issuing Entity will receive payments pursuant
to the Class A-2 Cap Contract.
O-2-1
EXHIBIT O-3
SUBORDINATE CERTIFICATES ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 06/26/06 07/25/06 142,719,000 6.937 8.950
2 07/25/06 08/25/06 142,719,000 6.454 8.950
3 08/25/06 09/25/06 142,719,000 6.454 8.950
4 09/25/06 10/25/06 142,719,000 6.687 8.950
5 10/25/06 11/25/06 142,719,000 6.454 8.950
6 11/25/06 12/25/06 142,719,000 6.688 8.950
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 8.950%) exceeds
the Lower Collar, the Issuing Entity will receive payments pursuant to the
Subordinate Certificates Cap Contract.
O-3-1
EXHIBIT P
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
XXXXXX LOAN SERVICING LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: _________________________________
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ___________________, having its principal
place of business at _____________________________, as Trustee (the "Trustee")
pursuant to that Pooling and Servicing Agreement among _______________ (the
"Depositor"), Xxxxxx Loan Servicing LP (the "Servicer") and the Trustee, dated
as of ____________ 1, 200__ (the "Pooling and Servicing Agreement"), hereby
constitutes and appoints the Servicer, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for the
purpose of performing all acts and executing all documents in the name of the
Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust,"
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recordings is for the purpose of correcting the Mortgage
or Deed of Trust to conform same to the original intent of the parties
thereto or to correct title errors discovered after such title insurance
was issued and said modification or re-recording, in either instance, does
not adversely affect the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement
in favor of a public utility company of a government agency or unit with
powers of eminent domain; this section shall include, without limitation,
the execution of partial satisfactions/releases, partial reconveyances or
the execution or requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the closing of
the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
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5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related
Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of
a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any
such foreclosure, including, without limitation, any and all of the
following acts:
a. the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or notices of
sale;
d. the cancellation/rescission of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and performance
of such other actions as may be necessary under the terms of the
Mortgage, Deed of Trust or state law to expeditiously complete said
transactions in paragraphs 8.a. through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof; provided, that the Servicer shall not without
the Trustee's written consent, (A) initiate any action in the Trustee's name
without indicating the Servicer's representative capacity or (B) cause the
Trustee to be registered to do business in any state; and provided further that
the Trustee shall not be liable for any misuse of, or negligence, willful
misfeasance or bad faith of the Servicer in connection with, the Servicer's use
of this power of attorney.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
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IN WITNESS WHEREOF, ____________________________ as Trustee pursuant to that
Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of _________ 1, 200__ (_________________ Mortgage Loan Asset
Backed Certificates, Series 200__-___), has caused its corporate seal to be
hereto affixed and these presents to be signed and acknowledged in its name and
behalf by its duly elected and authorized Vice President this __________ day of
________, 200__.
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as Trustee for _____ Mortgage Loan Asset
Backed Certificates, Series 200__-___
By
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STATE OF
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COUNTY OF
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On _______________________ __________, 200__, before me, the undersigned, a
Notary Public in and for said state, personally appeared _______________, Vice
President of _________________ as Trustee for __________________ Mortgage Loan
Asset Backed Certificates, Series 200__-___, personally known to me to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed that same in his/her authorized capacity, and that by
his/her signature on the instrument the entity upon behalf of which the person
acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
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Notary Public
My Commission Expires
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EXHIBIT Q
[RESERVED]
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EXHIBIT R
[RESERVED]
R-1
EXHIBIT S
FORM OF SWAP AGREEMENT
Dated: June __, 2006
RATE SWAP TRANSACTION
RE: BNY REFERENCE NO.[37610]
Ladies and Gentlemen:
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms
and conditions of the rate Swap Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between The Bank of New York ("BNY"), a
trust company duly organized and existing under the laws of the State of New
York, and the Ownit Mortgage Loan Asset-Backed Certificates Series 2006-4 (the
"COUNTERPARTY"), as represented by LaSalle Bank National Association, not in its
individual capacity, but solely as Trustee under the Pooling and Servicing
Agreement, dated and effective June 1, 2006, among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as Depositor, Xxxxxx Loan Servicing LP, as Servicer and LaSalle
Bank National Association, as Trustee (the "POOLING AND SERVICING AGREEMENT").
This Agreement, which evidences a complete and binding agreement between you and
us to enter into the Transaction on the terms set forth below, constitutes a
"CONFIRMATION" as referred to in the "ISDA FORM MASTER AGREEMENT" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. FORM OF AGREEMENT. This Agreement is subject to the 2000 ISDA Definitions
(the "DEFINITIONS"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). You and we have agreed to enter
into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA
Master Agreement (Multicurrency--Cross Border) form (the "ISDA FORM MASTER
AGREEMENT"). An ISDA Form Master Agreement, as modified by the Schedule
terms in Paragraph 4 of this Confirmation (the "MASTER AGREEMENT"), shall
be deemed to have been executed by you and us on the date we entered into
the Transaction. Except as otherwise specified, references herein to
Sections shall be to Sections of the ISDA Form Master Agreement and the
Master Agreement, and references to Paragraphs shall be to paragraphs of
this Agreement. Each party hereto agrees that the Master Agreement deemed
to have been executed by the parties hereto shall be the same Master
Agreement referred to in the agreement setting forth the terms of
transaction reference numbers [37611, 37612 and 37613]. In the event of any
inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Capitalized terms not otherwise defined herein
or in the Definitions or the Master Agreement shall have the meaning
defined for such term in the Pooling and Servicing Agreement.
2. CERTAIN TERMS. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Swap
Notional Amount: With respect to any Calculation Period the
amount set forth for such period on Schedule I
attached hereto.
Trade Date: June 30, 2006
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Effective Date: January 25, 2007
Termination Date: March 25, 2011, subject to adjustment in
accordance with the Following Business Day
Convention.
FIXED AMOUNTS
Fixed Rate Payer: Counterparty
Fixed Rate: _______%
Fixed Rate Day Count
Fraction: 30/360
Fixed Rate Payer
Period End Dates: The 25th day of each month, beginning on
January 25, 2007 and ending on the Termination
Date, subject to adjustment in accordance with
the Following Business Day Convention with No
Adjustment.
Fixed Rate Payer
Payment Dates: Early Payment shall be applicable. The Fixed
Rate Payer Payment Date shall be two (2)
Business Days preceding each Fixed Rate Payer
Period End Date.
FLOATING AMOUNTS
Floating Rate Payer: BNY
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Day Count
Fraction: Actual/360
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on
January 25, 2007 and ending on the Termination
Date, subject to adjustment in accordance with
the Following Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The
Floating Rate Payer Payment Date shall be two
(2) Business Days preceding each Floating Rate
Payer Period End Date.
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Reset Dates: The first day of each Calculation Period or
Compounding Period, if Compounding is
applicable.
Compounding: Inapplicable
Business Days for Payments
By both parties: New York
Calculation Agent: BNY
Additional Fees: The Counterparty shall pay BNY
USD ___________ on June 26, 2006.
3. ADDITIONAL PROVISIONS:
1) RELIANCE. Each party hereto is hereby advised and acknowledges that
the other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained from
taking) other material actions in reliance upon the entry by the
parties into the Transaction being entered into on the terms and
conditions set forth herein.
2) TRANSFER, AMENDMENT AND ASSIGNMENT. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall
be permitted by either party unless each of Standard & Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc ("S&P") and
Xxxxx'x Investors Service, Inc. ("MOODY'S"), has been provided notice
of the same and confirms in writing (including by facsimile
transmission) that it will not downgrade, qualify, withdraw or
otherwise modify its then-current ratings on the Certificates issued
under the Pooling and Servicing Agreement (the "CERTIFICATES").
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
4) NO NETTING BETWEEN TRANSACTIONS. The parties agree that subparagraph
(ii) of Section 2(c) will apply to any Transaction.
2) TERMINATION PROVISIONS. For purposes of the Master Agreement:
(a) "SPECIFIED ENTITY" is not applicable to BNY or the Counterparty
for any purpose.
(b) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will not
apply to BNY or the Counterparty.
(c) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
not apply to BNY (except with respect to credit support furnished
pursuant to Paragraph 4(9) below or the Counterparty.
(d) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not
apply to BNY or the Counterparty.
(e) "DEFAULT UNDER SPECIFIED TRANSACTION" is not applicable to BNY or
the Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BNY or the Counterparty.
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(f) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply
to BNY or to the Counterparty.
(g) The "BANKRUPTCY" provisions of Section 5(a)(vii)(2) will not
apply to the Counterparty; the words "trustee" and "custodian" in
Section 5(a)(vii)(6) will not include the Trustee; and the words
"specifically authorized " are inserted before the word "action"
in Section 5(a)(vii)(9)
(h) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will not apply to BNY or the Counterparty.
(i) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will
not apply to BNY or to the Counterparty.
(j) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "TERMINATION CURRENCY" means United States Dollars.
(l) NO ADDITIONAL AMOUNTS PAYABLE BY COUNTERPARTY. The Counterparty
shall not be required to pay any additional amounts pursuant to
Section 2(d)(i)(4) or 2(d)(ii).
3) TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), BNY and
the Counterparty make the following representations:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e)) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of
any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d), provided that it shall not be a
breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material
prejudice of its legal or commercial position.
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(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f), BNY and
the Counterparty make the following representations.
(i) The following representation will apply to BNY:
(x) It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) for United States federal income tax purposes,
(y) it is a trust company duly organized and existing under
the laws of the State of New York, and (y) its U.S. taxpayer
identification number is 000000000.
(ii) The following representation will apply to the Counterparty:
It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations)
for United States federal income tax purposes.
4) DOCUMENTS TO BE DELIVERED. FOR THE PURPOSE OF SECTION 4(A):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO DATE BY WHICH COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE TO BE DELIVERED 3(D) REPRESENTATION
----------------- -------------------------- --------------- -------------------
BNY and Counterparty Any document required or reasonably requested Upon the execution and Yes
to allow the other party to make payments under delivery of this Agreement
this Agreement without any deduction or
withholding for or on the account of any tax.
(b) Other documents to be delivered are:
PARTY REQUIRED TO DATE BY WHICH COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE TO BE DELIVERED 3(D) REPRESENTATION
----------------- -------------------------- --------------- -------------------
BNY A certificate of an authorized officer of the Upon the execution and Yes
party, as to the incumbency and authority of delivery of this Agreement
the respective officers of the party signing
this Agreement, any relevant Credit Support
Document, or any Confirmation, as the case may
be.
Counterparty (i) a copy of the executed Pooling and Upon the execution and Yes
Servicing Agreement, and (ii) an incumbency delivery of this Agreement
certificate verifying the true signatures and
authority of the person or persons signing this
letter agreement on behalf of the Counterparty.
BNY A copy of the most recent publicly available Promptly after request by Yes
regulatory call report. the other party
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BNY Legal Opinion as to enforceability of the Swap Upon the execution and Yes
Agreement. delivery of this Agreement.
Counterparty Certified copy of the Board of Directors Upon the execution and Yes
resolution (or equivalent authorizing delivery of this Agreement.
documentation) which sets forth the authority
of each signatory to the Confirmation signing
on its behalf and the authority of such party
to enter into Transactions contemplated and
performance of its obligations hereunder.
5) MISCELLANEOUS.
(a) ADDRESS FOR NOTICES: For the purposes of Section 12(a):
Address for notices or communications to BNY:
The Bank of New York
Swaps and Derivative Products Group
Global Market Division
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
with a copy to:
The Bank of New York
Swaps and Derivative Products Group
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Tele: 000-000-0000
Fax: 000-000-0000/5837
(For all purposes)
Address for notices or communications to the Counterparty:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: OWNIT 2006-4
Tele: 000-000-0000
Fax: 000-000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
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BNY appoints as its Process Agent: Not Applicable
The Counterparty appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will not apply to this
Agreement; neither BNY nor the Counterparty have any Offices
other than as set forth in the Notices Section and BNY agrees
that, for purposes of Section 6(b), it shall not in future have
any Office other than one in the United States.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
BNY is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is BNY.
(f) CREDIT SUPPORT DOCUMENT. Not applicable for either BNY (except
with respect to credit support furnished
pursuant to Paragraph 9) or the
Counterparty.
(g) CREDIT SUPPORT PROVIDER.
BNY: Not Applicable (except with respect to
credit support furnished pursuant to
Paragraph 9)
Counterparty: Not Applicable
(h) GOVERNING LAW. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i) SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) RECORDING OF CONVERSATIONS. Each party (i) consents to the
recording of telephone conversations between the trading,
marketing and other relevant personnel of the parties in
connection with this Agreement or any potential
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Transaction, (ii) agrees to obtain any necessary consent of, and
give any necessary notice of such recording to, its relevant
personnel and (iii) agrees, to the extent permitted by applicable
law, that recordings may be submitted in evidence in any
Proceedings.
(k) WAIVER OF JURY TRIAL. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(l) NON-RECOURSE. Notwithstanding any provision herein or in the ISDA
Form Master Agreement to the contrary, the obligations of the
Counterparty hereunder are limited recourse obligations of the
Counterparty, payable solely from the Trust Fund and the proceeds
thereof to satisfy the Counterparty's obligations hereunder. In
the event that the Trust Fund and proceeds thereof should be
insufficient to satisfy all claims outstanding, and following the
realization of the Trust Fund and the distribution of the
proceeds thereof in accordance with the Pooling and Servicing
Agreement, any claims against or obligations of the Counterparty
under the ISDA Form Master Agreement, or any other confirmation
thereunder, still outstanding shall be extinguished and
thereafter not revive. This provision shall survive the
expiration of this Agreement.
(m) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. BNY shall
not institute against or cause any other person to institute
against, or join any other person in instituting against the
Counterparty, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, under any of the laws of
the United States or any other jurisdiction, for a period of one
year and one day (or, if longer, the applicable preference
period) following indefeasible payment in full of the
Certificates. This provision shall survive the expiration of this
Agreement.
(n) REMEDY OF FAILURE TO PAY OR DELIVER. The ISDA Form Master
Agreement is hereby amended by replacing the word "third" in the
third line of Section 5(a)(i) by the word "second".
(o) "AFFILIATE" will have the meaning specified in Section 14 of the
ISDA Form Master Agreement, provided that the Counterparty shall
not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii).
(p) TRUSTEE'S CAPACITY. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by
the Trustee (i) this Confirmation is executed and delivered by
LaSalle Bank National Association, not in its individual capacity
but solely as Trustee pursuant to the Pooling and Servicing
Agreement in the exercise of the powers and authority conferred
and vested in it thereunder and pursuant to instruction set forth
therein (ii) each of the representations, undertakings and
agreements herein made on behalf of the trust is made and
intended not as a personal representation, undertaking or
agreement of the Trustee but is made and intended for the purpose
of binding only the Counterparty, and (iii) under no
circumstances will LaSalle Bank National Association, in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach
or failure of any
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obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
(q) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as
Trustee, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this letter agreement as Trustee on behalf of the
Counterparty.
(r) AMENDMENT TO POOLING AND SERVICING AGREEMENT. Notwithstanding any
provisions to the contrary in the Pooling and Servicing
Agreement, none of the Depositor, the Servicer or the Trustee
shall enter into any amendment thereto which could have a
material adverse affect on BNY without the prior written consent
of BNY.
6) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding,
before the close parenthesis in the introductory sentence thereof, the
words ", and, in the case of the representations in Section 3(i), at
all times", and, at the end thereof, the following Sections 3(g), 3(h)
and 3(i):
"(g) RELATIONSHIP BETWEEN PARTIES.
(1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in respect
of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(i) Each party acknowledges that LaSalle Bank National
Association, has been directed under the Pooling and
Servicing Agreement to enter into this Transaction as
Trustee on behalf of the Counterparty.
(ii) It is acting for its own account and has the capacity
to evaluate (internally or through independent professional
advice) the Transaction and has made its own decision to
enter into the Transaction; it is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into such
transaction; it being understood that information and
explanations related to the terms and conditions of such
transaction shall not be considered investment advice or a
recommendation to enter into such transaction. No
communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to
the expected results of the transaction; and
(iii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms
and conditions and to assume (and does, in fact assume)
those risks, financially and otherwise.
S-9
(3) PRINCIPAL. The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.
(h) EXCLUSION FROM COMMODITIES EXCHANGE ACT. (A) It is an "eligible
contract participant" within the meaning of Section 1a(12) of the
Commodity Exchange Act, as amended; (B) this Agreement and each
Transaction is subject to individual negotiation by such party; and
(C) neither this Agreement nor any Transaction will be executed or
traded on a "trading facility" within the meaning of Section 1a(33) of
the Commodity Exchange Act, as amended.
(i) ERISA (PENSION PLANS). It is not a pension plan or employee
benefits plan and it is not using assets of any such plan or assets
deemed to be assets of such a plan in connection with this
Transaction.
7) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreement (but without limiting the provisions of
Section 2(c) and Section 6, except as provided in the next sentence),
each party irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition payment
or performance of any obligation between it and the other party
hereunder against any obligation between it and the other party under
any other agreements. The last sentence of the first paragraph of
Section 6(e) shall not apply for purposes of this Transaction.
8) ADDITIONAL TERMINATION EVENTS. The following Additional Termination
Events will apply, in each case with respect to the Counterparty as
the sole Affected Party (unless otherwise provided below):
(i) REMEDY OF RATINGS EVENTS. BNY fails to comply with the provisions
of Paragraph 9. For all purposes of this Agreement, BNY shall be
the sole Affected Party with respect to the occurrence of a
Termination Event described in this Paragraph 8(i).
(ii) TERMINATION OF TRUST FUND. The Trust Fund shall be terminated
pursuant to any provision of the Pooling and Servicing Agreement.
The Early Termination Date with respect to such Additional
Termination Event shall be the Distribution Date upon which the
Trust is terminated and final payment is made in respect of the
Certificates.
(iii) AMENDMENT OF POOLING AND SERVICING AGREEMENT WITHOUT CONSENT OF
BNY. If the Trustee permits the Pooling and Servicing Agreement
to be amended in a manner which could have a material adverse
affect on BNY without first obtaining the prior written consent
of BNY.
(iv) FAILURE TO PROVIDE INFORMATION REQUIRED BY REGULATION AB. If the
Depositor under the Pooling and Servicing Agreement still has a
reporting obligation with respect to this Transaction pursuant to
Regulation AB under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended ("REGULATION AB")
and BNY has not, within 30 days after receipt of a Swap
Disclosure Request complied with the provisions set forth below
in this Paragraph 4(8)(iv) (provided that if the significance
percentage reaches 10% after a Swap Disclosure Request has been
made to BNY, BNY must comply with the provisions set forth below
in this Section 4(8)(iv) within 10 days of BNY being
S-10
informed of the significance percentage reaching 10%), then an
Additional Termination Event shall have occurred with respect to
BNY and BNY shall be the sole Affected Party with respect to such
Additional Termination Event.
BNY acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB,
the Depositor is required under Regulation AB to disclose certain
information set forth in Regulation AB regarding BNY or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other
derivative contracts between BNY or its group of affiliated
entities, if applicable, and the Counterparty, as calculated from
time to time in accordance with Item 1115 of Regulation AB.
If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to
nine (9) percent, then the Depositor may request on a Business
Day after the date of such determination from BNY the same
information set forth in Item 1115(b) of Regulation AB that would
have been required if the significance percentage had in fact
increased to ten (10) percent (such request, a "SWAP DISCLOSURE
REQUEST" and such requested information, subject to the last
sentence of this paragraph, is the "SWAP FINANCIAL DISCLOSURE").
The Counterparty or the Depositor shall provide BNY with the
calculations and any other information reasonably requested by
BNY with respect to the Depositor's determination that led to the
Swap Disclosure Request. The parties hereto further agree that
the Swap Financial Disclosure provided to meet the Swap
Disclosure Request may be, solely at BNY's option, either the
information set forth in Item 1115(b)(1) or Item 1115(b)(2) of
Regulation AB.
Upon the occurrence of a Swap Disclosure Request, BNY, at its own
expense, shall (x) provide the Depositor with the Swap Financial
Disclosure, or (y) subject to Rating Agency Confirmation, secure
another entity to replace BNY as party to this Agreement on terms
substantially similar to this Agreement which entity is able to
provide the Swap Financial Disclosure. If permitted by Regulation
AB, any required Swap Financial Disclosure may be provided by
incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
9) PROVISIONS RELATING TO DOWNGRADE OF BNY DEBT RATINGS.
(i) For purposes of this Transaction:
(a) A "COLLATERALIZATION RATINGS EVENT" shall occur with respect
to BNY (or any applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is reduced to "P-1 on watch for downgrade" or below,
and its long-term unsecured and unsubordinated debt is
reduced to "A1 on watch for downgrade" or below (or, if
it has no short-term unsecured and unsubordinated debt
rating, its long term rating is reduced to "Aa3 on
watch for downgrade" or below) by Moody's, or
S-11
(y) its short-term unsecured and unsubordinated debt rating
is reduced below "A-1" by S&P.
Such ratings are referred to herein as the "QUALIFYING
RATINGS."
(b) A "RATINGS EVENT" shall occur with respect to BNY (or any
applicable credit support provider) if:
(x) its short-term unsecured and unsubordinated debt rating
is withdrawn or reduced to "P-2" or below by Moody's
and its long-term unsecured and unsubordinated debt is
reduced to "A3" or below (or, if it has no short-term
unsecured and unsubordinated debt rating, its long term
rating is reduced to "A2" or below) by Moody's, or
(y) its long-term unsecured and unsubordinated debt rating
is withdrawn or reduced below "BBB-" by S&P.
For purposes of (a) and (b) above, such events include those
occurring in connection with a merger, consolidation or
other similar transaction by BNY or any applicable credit
support provider, but they shall be deemed not to occur if,
within 30 days thereafter, each of Moody's and S&P has
reconfirmed the ratings of the Certificates, as applicable,
which were in effect immediately prior thereto. For the
avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that BNY does not post
sufficient collateral.
(c) "RATING AGENCY CONDITION" means, with respect to any
particular proposed act or omission to act hereunder, that
the Trustee shall have received prior written confirmation
from each of Moody's and S&P, and shall have provided notice
thereof to BNY, that the proposed action or inaction would
not cause a downgrade or withdrawal of their then-current
ratings of the Certificates.
(ii) Subject, in each case set forth in (a) and (b) below, to
satisfaction of the Rating Agency Condition:
(a) COLLATERALIZATION RATINGS EVENT. If a Collateralization
Ratings Event occurs with respect to BNY (or any applicable
credit support provider), then BNY shall, at its own
expense, and subject to rating agency confirmation, within
thirty (30) days of such Collateralization Ratings Event:
(w) post collateral under agreements and other instruments
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, and
satisfactory to Moody's and S&P, which will be
sufficient to restore the immediately prior ratings of
the Certificates,
(x) assign this Transaction to a third party, the ratings
of the debt of which (or the ratings of the debt of the
credit support provider of
S-12
which) meet or exceed the Qualifying Ratings, on terms
substantially similar to this Confirmation, which party is
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld,
(y) obtain a guaranty of, or a contingent agreement of, another
person, the ratings of the debt of which (or the ratings of
the debt of the credit support provider of which) meet or
exceed the Qualifying Ratings, to honor BNY's obligations
under this Agreement, provided that such other person is
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, or
(z) establish any other arrangement approved by the Counterparty
and the NIMS Insurer, such approval not to be unreasonably
withheld and satisfactory to Moody's and S&P which will be
sufficient to restore the immediately prior ratings of their
Certificates.
(b) RATINGS EVENT. If a Ratings Event occurs with respect to BNY (or
any applicable credit support provider), then BNY shall, at its
own expense, and subject to rating agency confirmation within ten
(10) Business Days of such Ratings Event:
(x) assign this Transaction to a third party, the ratings of the
debt of which (or the ratings of the debt of the credit
support provider of which) meet or exceed the Qualifying
Ratings, on terms substantially similar to this
Confirmation, which party is approved by the Counterparty
and the NIMS Insurer, such approval not to be unreasonably
withheld,
(y) obtain a guaranty of, or a contingent agreement of, another
person, the ratings of the debt of which (or the ratings of
the debt of the credit support provider of which) meet or
exceed the Qualifying Ratings, to honor BNY's obligations
under this Agreement, provided that such other person is
approved by the Counterparty and the NIMS Insurer, such
approval not to be unreasonably withheld, or
(z) establish any other arrangement approved by the Counterparty
and the NIMS Insurer, such approval not to be unreasonably
withheld and satisfactory to Moody's and S&P which will be
sufficient to restore the immediately prior ratings of their
Certificates.
10) BNY PAYMENTS TO BE MADE TO TRUSTEE. BNY will, unless otherwise
directed by the Trustee, make all payments hereunder to the Trustee.
Payment made to the Trustee at the account specified herein or to
another account specified in writing by the Trustee shall satisfy the
payment obligations of BNY hereunder to the extent of such payment.
S-13
11) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Xxxxxxx Xxxxx
Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts
paid hereunder are not intended to benefit the holder of any class of
certificates rated by any rating agency if such holder is MLML or any
of its affiliates. If MLML or any of its affiliates receives any such
amounts, it will promptly remit (or, if such amounts are received by
an affiliate of MLML, MLML hereby agrees that it will cause such
affiliate to promptly remit) such amounts to the Trustee, whereupon
such Trustee will promptly remit such amounts to BNY. MLML further
agrees to provide notice to BNY upon any remittance to the trustee.
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
Payments to BNY:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #
Account #
Reference: Interest Rate Swap
Payments to Counterparty:
LaSalle Bank N.A.
ABA #
Acct #:
Ref: Ownit 2006-4 Swap Account
6. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxx Au-Xxxxx at 000-000-0000/5837.
Once we receive this we will send you two original confirmations for execution.
S-14
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
The Counterparty, acting through its duly authorized signatory, hereby
agrees to, accepts and confirms the terms of the foregoing as of the Trade Date.
OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY: LASALLE BANK NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEE
ON BEHALF OF OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATE, SERIES 2006-4
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Solely with respect to Paragraph 4(11)
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
S-15
SCHEDULE I
All dates subject to adjustment in accordance with the Following Business Day
Convention.
ACCRUAL NOTIONAL
START ACCRUAL AMOUNT
DATE END DATES (USD)
------- ---------- -----------
09/25/06 10/25/2006 480,877,791
10/25/06 11/25/2006 467,063,081
11/25/06 12/25/2006 450,862,938
12/25/2006 1/25/2007 432,819,346
1/25/2007 2/25/2007 412,975,748
2/25/2007 3/25/2007 391,452,091
3/25/2007 4/25/2007 368,806,702
4/25/2007 5/25/2007 346,229,902
5/25/2007 6/25/2007 324,831,809
6/25/2007 7/25/2007 304,714,465
7/25/2007 8/25/2007 285,784,232
8/25/2007 9/25/2007 267,973,505
9/25/2007 10/25/2007 251,284,499
10/25/2007 11/25/2007 235,618,378
11/25/2007 12/25/2007 220,925,605
12/25/2007 1/25/2008 206,946,149
1/25/2008 2/25/2008 193,007,517
2/25/2008 3/25/2008 178,326,079
3/25/2008 4/25/2008 162,741,812
4/25/2008 5/25/2008 147,961,289
5/25/2008 6/25/2008 135,238,308
6/25/2008 7/25/2008 124,226,793
7/25/2008 8/25/2008 114,531,076
8/25/2008 9/25/2008 105,888,285
9/25/2008 10/25/2008 98,032,161
10/25/2008 11/25/2008 90,785,533
11/25/2008 12/25/2008 86,592,000
12/25/2008 1/25/2009 86,592,000
1/25/2009 2/25/2009 86,592,000
2/25/2009 3/25/2009 83,809,433
3/25/2009 4/25/2009 83,645,736
4/25/2009 5/25/2009 76,044,599
S-16
5/25/2009 6/25/2009 69,095,103
6/25/2009 7/25/2009 63,441,574
7/25/2009 8/25/2009 58,761,628
8/25/2009 9/25/2009 54,702,363
9/25/2009 10/25/2009 51,100,199
10/25/2009 11/25/2009 47,884,605
11/25/2009 12/25/2009 45,003,063
12/25/2009 1/25/2010 42,411,426
1/25/2010 2/25/2010 40,064,736
2/25/2010 3/25/2010 37,925,001
3/25/2010 4/25/2010 35,961,820
4/25/2010 5/25/2010 34,150,358
5/25/2010 6/25/2010 32,472,165
6/25/2010 7/25/2010 30,912,146
7/25/2010 8/25/2010 29,457,812
S-17
EXHIBIT T-1
FORM OF ASSESSMENT OF COMPLIANCE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit Series 2006-4
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard & Poor's, a division of
The XxXxxx-Xxxx Companies, Inc.
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of June 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor,
Xxxxxx Loan Servicing LP, as servicer, and LaSalle Bank National
Association, as trustee, relating to the Ownit Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series 2006-4 (the "Trust")
For the calendar year ending December 31, [2006] or portion thereof,
[Xxxxxx Loan Servicing LP, as Servicer] [LaSalle Bank National Association, as
Trustee] for the Trust has complied in all material respects with the relevant
Servicing Criteria in Exhibit T-2 of the Agreement.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Agreement.
Date:
-------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
T-1-1
EXHIBIT T-2
SERVICING CRITERIA
(EXHIBIT A TO FORM OF ASSESSMENT OF COMPLIANCE)
(RMBS UNLESS OTHERWISE NOTED)
DEFINITIONS
PRIMARY SERVICER - transaction party having borrower contact
CUSTODIAN - safe keeper of pool assets
TRUSTEE - fiduciary of the transaction
LASALLE BANK
XXXXXX LOAN NATIONAL
SERVICING LP ASSOCIATION
REG AB REFERENCE SERVICING CRITERIA (SERVICER) (CUSTODIAN) (TRUSTEE)
---------------- ---------------------------------------- ----------------- ----------------- -----------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted X X
to monitor any performance or other
triggers and events of default in
accordance with the transaction
agreements.
1122(d)(1)(ii) If any material servicing activities are If applicable for If applicable for If applicable for
outsourced to third parties, policies a transaction a transaction a transaction
and procedures are instituted to monitor participant participant participant
the third party's performance and
compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the transaction
agreements to maintain a back-up
servicer for the Pool Assets are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions X
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the
amount of coverage required by and
otherwise in accordance with the terms
of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited X X
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business days
following receipt, or such other number
of days specified in the transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on X X
behalf of an obligor or to an investor
are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees X
regarding collections, cash flows or
distributions, and any interest or other
fees charged for such advances, are
made, reviewed and approved as specified
in the transaction agreements.
1122(d)(2)(iv) The related accounts for the X* X
transaction, such as cash reserve
accounts or accounts established as a
form of over collateralization, are
separately maintained
T-2-1
LASALLE BANK
XXXXXX LOAN NATIONAL
SERVICING LP ASSOCIATION
REG AB REFERENCE SERVICING CRITERIA (SERVICER) (CUSTODIAN) (TRUSTEE)
---------------- ---------------------------------------- ----------------- ----------------- -----------------
(e.g., with respect to commingling of
cash) as set forth in the transaction
agreements.
1122(d)(2)(v) Each custodial account is maintained at X X*
a federally insured depository
institution as set forth in the
transaction agreements. For purposes of
this criterion, "federally insured
depository institution" with respect to
a foreign financial institution means a
foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of
the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to If applicable If applicable
prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a X X
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and related
bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30
calendar days after the bank statement
cutoff date, or such other number of
days specified in the transaction
agreements; (C) reviewed and approved by
someone other than the person who
prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of
their original identification, or such
other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to X X
be filed with the Securities and
Exchange Commission, are maintained in
accordance with the transaction
agreements and applicable Securities and
Exchange Commission requirements.
Specifically, such reports (A) are
prepared in accordance with timeframes
and other terms set forth in the
transaction agreements; (B) provide
information calculated in accordance
with the terms specified in the
transaction agreements; (C) are filed
with the Securities and Exchange
Commission as required by its rules and
regulations; and (D) agree with
investors' or the trustee's records as
to the total unpaid principal balance
and number of Pool Assets serviced by
the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated X X
and remitted in accordance with
timeframes, distribution priority and
other terms set forth in the transaction
agreements.
1122(d)(3)(iii) Disbursements made to an investor are X X
posted within two business days to the
T-3-2
LASALLE BANK
XXXXXX LOAN NATIONAL
SERVICING LP ASSOCIATION
REG AB REFERENCE SERVICING CRITERIA (SERVICER) (CUSTODIAN) (TRUSTEE)
---------------- ---------------------------------------- ----------------- ----------------- -----------------
Servicer's investor records, or such
other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the X X
investor reports agree with cancelled
checks, or other form of payment, or
custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is X X*
maintained as required by the
transaction agreements or related pool
asset documents.
1122(d)(4)(ii) Pool assets and related documents are X
safeguarded as required by the
transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions X X
to the asset pool are made, reviewed and
approved in accordance with any
conditions or requirements in the
transaction agreements.
1122(d)(4)(iv) Payments on pool assets, including any X
payoffs, made in accordance with the
related pool asset documents are posted
to the Servicer's obligor records
maintained no more than two business
days after receipt, or such other number
of days specified in the transaction
agreements, and allocated to principal,
interest or other items (e.g., escrow)
in accordance with the related pool
asset documents.
1122(d)(4)(v) The Servicer's records regarding the X
pool assets agree with the Servicer's
records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or X
status of an obligor's pool assets
(e.g., loan modifications or re-agings)
are made, reviewed and approved by
authorized personnel in accordance with
the transaction agreements and related
pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions X
(e.g., forbearance plans, modifications
and deeds in lieu of foreclosure,
foreclosures and repossessions, as
applicable) are initiated, conducted and
concluded in accordance with the
timeframes or other requirements
established by the transaction
agreements.
1122(d)(4)(viii) Records documenting collection efforts X
are maintained during the period a pool
asset is delinquent in accordance with
the transaction agreements. Such records
are maintained on at least a monthly
basis, or such other period specified in
the transaction agreements, and describe
the
T-3-3
LASALLE BANK
XXXXXX LOAN NATIONAL
SERVICING LP ASSOCIATION
REG AB REFERENCE SERVICING CRITERIA (SERVICER) (CUSTODIAN) (TRUSTEE)
---------------- ---------------------------------------- ----------------- ----------------- -----------------
entity's activities in monitoring
delinquent pool assets including, for
example, phone calls, letters and
payment rescheduling plans in cases
where delinquency is deemed temporary
(e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates X
of return for pool assets with variable
rates are computed based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A)
such funds are analyzed, in accordance
with the obligor's pool asset documents,
on at least an annual basis, or such
other period specified in the
transaction agreements; (B) interest on
such funds is paid, or credited, to
obligors in accordance with applicable
pool asset documents and state laws; and
(C) such funds are returned to the
obligor within 30 calendar days of full
repayment of the related pool assets, or
such other number of days specified in
the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor X
(such as tax or insurance payments) are
made on or before the related penalty or
expiration dates, as indicated on the
appropriate bills or notices for such
payments, provided that such support has
been received by the servicer at least
30 calendar days prior to these dates,
or such other number of days specified
in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection X
with any payment to be made on behalf of
an obligor are paid from the Servicer's
funds and not charged to the obligor,
unless the late payment was due to the
obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an X
obligor are posted within two business
days to the obligor's records maintained
by the servicer, or such other number of
days specified in the transaction
agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and X
uncollectible accounts are recognized
and recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other X
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
transaction agreements.
T-3-4
* For d(2)(iv) Servicer needs to provide only if it is deemed that the
Collection Account is subject to this criteria.
* For d(2)(i) and (v) Trustee needs to provide only if it is deemed that any
account maintained by the Trustee is a custodial account for purposes of
the servicing criteria. Subject to further clarification from the
Securities and Exchange Commission.
* For d(4)(i) Trustee needs to provide only if it is deemed that the final
certification required to be delivered by the Trustee pursuant to Section
2.02 of the Agreement, "Acceptance by the Trustee of the Mortgage Loans",
is not covered in the (d)(4)(iii) servicing criteria.
T-3-5
EXHIBIT T-3
FORM OF XXXXXXXX-XXXXX CERTIFICATION
2006-4 TRUST,
OWNIT MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-4
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2006-4
I, [identify the certifying individual], certify that:
1. I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act Periodic Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act Periodic Reports;
4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act Periodic
Reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
5. All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor, custodian or trustee].]
Date:
-------------------------------
----------------------------------------
[Signature]
[Title]
--------------------------------
T-3-1
EXHIBIT T-4
FORM OF ITEM 1123 CERTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Ownit Series 2006-4
Re: Pooling and Servicing Agreement (the "Agreement") dated as of June 1, 2006,
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxxx Loan
Servicing LP, as servicer, and LaSalle Bank National Association, as
trustee, relating to Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-4.
I, [identify name of certifying individual], [title of certifying individual] of
Xxxxxx Loan Servicing LP (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the Agreement has
been made under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].
Date:
-------------------------------
Xxxxxx Loan Servicing LP, as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
T-4-1
EXHIBIT T-5
FORM OF OFFICER'S CERTIFICATE (TRUSTEE)
[[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of June 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxxx
Loan Servicing LP, as servicer, and LaSalle Bank National Association, as
trustee, relating to Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-4
The Trustee hereby certifies to the Depositor, the Servicer and their
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal year
[2006] (the "Annual Report"), and all reports on Form 8-K (if any) and on Form
10-D required to be filed in respect of the period covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the Trust;
(2) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the Servicer
and Depositor (to the extent that such statements or data were received by the
Trustee and are relevant to the statements made by the Trustee in this Back-Up
Certification), the information in the Reports relating to the trustee, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by the Annual Report;
(3) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the Servicer
and Depositor (to the extent that such statements or data were received by the
Trustee and are relevant to the statements made by the Trustee in this Back-Up
Certification), the distribution and any other information required to be
provided by the Trustee (other than information provided by or on behalf of the
Servicer or the Depositor) to the Depositor and each Servicer under the Pooling
and Servicing Agreement for inclusion in the Reports is included in the Reports
and does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading; and
(4) The report on assessment of compliance with servicing criteria for
asset-backed securities of the Trustee and its related attestation report on
assessment of compliance with servicing criteria required to be included in the
Annual Report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 has been included as an exhibit to the Annual Report.
Any
T-5-1
material instances of non-compliance are described in such report and have been
disclosed in the Annual Report.
LaSalle Bank National Association,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
T-5-2
EXHIBIT U
[RESERVED]
U-1
EXHIBIT V
[RESERVED]
V-1
EXHIBIT W
[RESERVED]
W-1
EXHIBIT X
FORM 8-K DISCLOSURE
Item on Form 8-K Party Responsible
---------------- -----------------
Item 1.01- Entry into a Material Definitive Agreement Depositor, Trustee, Servicer
Item 1.02- Termination of a Material Definitive Agreement Depositor, Trustee, Servicer
Item 1.03- Bankruptcy or Receivership Depositor
Item 2.04- Triggering Events that Accelerate or Increase a Depositor
Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
Item 3.03- Material Modification to Rights of Security Holders Depositor, Trustee
Item 5.03- Amendments of Articles of Incorporation or Bylaws; Depositor
Change of Fiscal Year
Item 6.01- ABS Informational and Computational Material Depositor
Item 6.02- Change of Servicer or Trustee Depositor, Trustee, Servicer
Item 6.03- Change in Credit Enhancement or External Support Depositor, Trustee
Item 6.04- Failure to Make a Required Distribution Depositor, Trustee
Item 6.05- Securities Act Updating Disclosure Depositor
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
To the extent no notice is provided to the Trustee of the events or information
as described above in this Exhibit X, the Trustee shall without further notice
conclude that there is no event or information to be reported.
X-1
EXHIBIT Y
FORM OF 10-D DISCLOSURE
ITEM DESCRIPTION RESPONSIBLE PARTY
---- ----------- -----------------
1 DISTRIBUTION AND POOL PERFORMANCE INFORMATION
Item 1121(a) - Distribution and Pool Performance Information
(1) Any applicable record dates, accrual dates, determination dates for 4.05 statement*
calculating distributions and actual distribution dates for the
distribution period.
(2) Cash flows received and the sources thereof for distributions, fees 4.05 statement
and expenses.
(3) Calculated amounts and distribution of the flow of funds for the 4.05 statement
period itemized by type and priority of payment, including:
(i) Fees or expenses accrued and paid, with an identification of the 4.05 statement
general purpose of such fees and the party receiving such fees or
expenses.
(ii) Payments accrued or paid with respect to enhancement or other 4.05 statement
support identified in Item 1114 of Regulation AB (such as insurance
premiums or other enhancement maintenance fees), with an identification
of the general purpose of such payments and the party receiving such
payments.
(iii) Principal, interest and other distributions accrued and paid 4.05 statement
on the asset-backed securities by type and by class or series and any
principal or interest shortfalls or carryovers.
(iv) The amount of excess cashflow or excess spread and the 4.05 statement
disposition of excess cashflow.
(4) Beginning and ending principal balances of the asset-backed 4.05 statement
securities.
(5)Interest rates applicable to the pool assets and the asset-backed 4.05 statement
securities, as applicable. Interest rate information for pool assets in
appropriate distributional groups and incremental ranges.
(6) Beginning and ending balances of transaction accounts, such as 4.05 statement
reserve accounts, and material account activity during the period.
(7) Any amounts drawn on any credit enhancement or other support 4.05 statement
identified in Item 1114 of Regulation AB, as applicable, and the amount
of coverage remaining under any such enhancement, if known and
applicable.
(8) Number and amount of pool assets at the beginning and ending of each 4.05 statement
period, and updated pool composition information, including weighted
average coupon, weighted average life, weighted average remaining term, Pool composition
pool factors and prepayment amounts. information fields may
be updated as specified
by Depositor from time
to time.
(9) Delinquency and loss information for the period. 4.05 statement
In addition, describe any material changes to the information specified Form 10-D report:
in Item 1100(b)(5) of Regulation AB regarding the pool assets. Servicer
(10) Information on the amount, terms and general purpose of any advances 4.05 statement
made or reimbursed during the period, including the general use of funds
Y-1
advanced and the general source of funds for reimbursements.
(11) Any material modifications, extensions or waivers to pool asset 4.05 statement
terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time.
(12) Material breaches of pool asset representations or warranties or Form 10-D report:
transaction covenants Servicer
(13) Information on ratio, coverage or other tests used for determining 4.05 statement
any early amortization, liquidation or other performance trigger and
whether the trigger was met.
(14) Information regarding any new issuance of asset-backed securities Form 10-D report:
backed by the same asset pool, information regarding any pool asset Depositor
changes (other than in connection with a pool asset converting into cash
in accordance with its terms), such as additions or removals in
connection with a prefunding or revolving period and pool asset
substitutions and repurchases (and purchase rates, if applicable), and
cash flows available for future purchases, such as the balances of any
prefunding or revolving accounts, if applicable. Disclose any material
changes in the solicitation, credit-granting, underwriting, origination,
acquisition or pool selection criteria or procedures, as applicable, used
to originate, acquire or select the new pool assets.
Item 1121(b) - Pre-Funding or Revolving Period Information
Updated pool information as required under Item 1121(b). N/A
2 LEGAL PROCEEDINGS
Item 1117 - Legal proceedings pending against the following entities, or (i) all parties to the
their respective property, that is material to Certificateholders, Pooling Agreement as to
including proceedings known to be contemplated by governmental themselves, (ii) the
authorities: Depositor, the Trustee
Sponsor and the Servicer as to
Depositor the Issuing Entity (in
Trustee each case, to the extent
Issuing Entity any such party has
Originator actual knowledge of the
Custodian proceedings), and (iii)
the Depositor as to the
Sponsor, any 1110(b)
originator and any
1110(d)(1) party.
3 SALES OF SECURITIES AND USE OF PROCEEDS
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the Sponsor, Depositor or Depositor
Issuing Entity that are backed by the same asset pool or are otherwise
issued by the Issuing Entity, whether or not registered, provide the
sales and use of proceeds information in Item 701 of Regulation S-K.
Pricing information may be omitted if securities were not registered.
4 DEFAULT UPON SENIOR SECURITIES
Information from Item 3 of Part II Of Form 10-Q:
Y-2
Report the occurrence of any Event of Default (after expiration of any Trustee
grace period and provision of any required notice).
5 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Information from Item 4 of Part II of Form 10-Q Trustee
6 SIGNIFICANT OBLIGORS OF POOL ASSETS
Item 1112(b) - Significant Obligor Financial Information* N/A
* This information need only be reported on the Form 10-D for the
distribution period in which updated information is required
pursuant to the Item.
7 SIGNIFICANT ENHANCEMENT PROVIDER INFORMATION
Item 1114(b)(2) - Credit Enhancement Provider Financial Information*
Determining applicable disclosure threshold. Depositor
Obtaining required financial information or effecting incorporation by Depositor
reference.
Item 1115(b) - Derivative Counterparty Financial Information*
Determining current maximum probable exposure. Depositor
Determining current significance percentage. Depositor
Obtaining required financial information or effecting incorporation by Depositor
reference.
* This information need only be reported on the Form 10-D for the
distribution period in which updated information is required
pursuant to the Items.
8 OTHER INFORMATION
Disclose any information required to be reported on Form 8-K during the The Responsible Party
period covered by the Form 10-D but not reported. for the applicable Form
8-K item.
9 EXHIBITS
Distribution Report Trustee
Exhibits required by Item 601 of Regulation S-K, such as material Depositor
agreements.
* "4.05 statement" refers to the Statements to be prepared by the Trustee as
described in Section 4.05 of the Pooling Agreement.
To the extent no notice is provided to the Trustee of the events or information
as described above in this Exhibit Y, the Trustee shall without further notice
conclude that there is no event or information to be reported.
Y-3
EXHIBIT Z
FORM 10-K DISCLOSURE
Item on Form 10-K Party Responsible
----------------- -----------------
Item 1B: Unresolved Staff Comments Depositor
Item 9B: Other Information Any party responsible for disclosure items on Form 8-K
Item 15: Exhibits, Financial Statement Schedules Depositor, Trustee
Additional Item: (i) All parties to the Pooling and Servicing Agreement
(as to themselves), (ii) the Depositor, the Trustee
Disclosure per Item 1117 of Reg AB and the Servicer as to the issuing entity (in each
case, to the extent such party has actual knowledge),
and (iii) the Depositor as to the sponsor, any 1110(b)
originator and any 1100(d)(1) party
Additional Item: All parties to the Pooling and Servicing Agreement as
Disclosure per Item 1119 of Reg AB to themselves, (ii) the Depositor as to the sponsor,
originator, significant obligor, enhancement or
support provider
Additional Item: N/A
Disclosure per Item 1112(b) of Reg AB
Additional Item: Depositor/Sponsor
Disclosure per Items 1114(b) and 1115(b) of Reg AB
To the extent no notice is provided to the Trustee of the events or information
as described above in this Exhibit Z, the Trustee shall without further notice
conclude that there is no event or information to be reported.
Z-1
EXHIBIT Z-1
ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA FAX [FAX NO.] AND VIA EMAIL TO [EMAIL ADDRESS] AND VIA OVERNIGHT MAIL
TO THE ADDRESS IMMEDIATELY BELOW**
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association, as Trustee
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Global Securities and Trust Services- [DEAL NAME]--SEC REPORT PROCESSING
RE: **Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies and Gentlemen:
In accordance with Section [___] of the Pooling and Servicing Agreement,
dated as of June 1, 2006, among Xxxxxx Servicing LP, as Servicer, Xxxxxxx Xxxxx
Mortgage Investors, Inc., as Depositor, and LaSalle Bank National Association,
as Trustee, the undersigned, as [___________], hereby notifies you that certain
events have come to our attention that [will] [may] need to be disclosed on Form
[10-D][10-K][8-K].
Description of Additional Form [10-D][10-K][8-K] Disclosure:
List of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure:
Any inquiries related to this notification should be directed to
[_________________], phone number: [_________________]; email address:
[_________________].
[NAME OF PARTY],
as [role]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Z-1-1
