Exhibit 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
HOME LOAN SERVICES, INC.,
Servicer
and
LASALLE BANK NATIONAL ASSOCIATION,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2007
----------
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-5
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.............................................................. 13
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES............. 66
SECTION 2.01. Conveyance of Mortgage Loans........................................ 66
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans..................... 68
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.......... 70
SECTION 2.04. Representations and Warranties of the Servicer...................... 73
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that are not
"Qualified Mortgages"............................................... 74
SECTION 2.06. Authentication and Delivery of Certificates......................... 75
SECTION 2.07. REMIC Elections..................................................... 75
SECTION 2.08. [RESERVED].......................................................... 80
SECTION 2.09. Covenants of the Servicer........................................... 80
SECTION 2.10. [RESERVED].......................................................... 80
SECTION 2.11. Permitted Activities of the Issuing Entity.......................... 81
SECTION 2.12. Qualifying Special Purpose Entity................................... 81
SECTION 2.13. Depositor Notification of NIM Notes................................. 81
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................... 81
SECTION 3.01. Servicer to Service Mortgage Loans.................................. 81
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer............................................................ 83
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer.. 84
SECTION 3.04. Trustee to Act as Servicer.......................................... 84
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account................................................. 85
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts............................................................ 88
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans...................................................... 89
SECTION 3.08. Permitted Withdrawals from the Collection Account and Certificate
Account............................................................. 89
SECTION 3.09. [RESERVED].......................................................... 91
SECTION 3.10. Maintenance of Hazard Insurance..................................... 91
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements........... 92
-i-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Special Loss Mitigation................................... 93
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files..................... 97
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be Held
for the Trustee..................................................... 98
SECTION 3.15. Servicing Compensation.............................................. 99
SECTION 3.16. Access to Certain Documentation..................................... 99
SECTION 3.17. Annual Statement as to Compliance................................... 99
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements................................................. 100
SECTION 3.19. Subordination of Liens.............................................. 102
SECTION 3.20. Periodic Filings.................................................... 103
SECTION 3.21. Indemnification by Trustee.......................................... 106
SECTION 3.22. Indemnification by Servicer......................................... 107
SECTION 3.23. Prepayment Charge Reporting Requirements............................ 107
SECTION 3.24. Information to the Trustee.......................................... 108
SECTION 3.25. Indemnification..................................................... 108
SECTION 3.26. Solicitation........................................................ 108
SECTION 3.27. High Cost Mortgage Loans............................................ 109
SECTION 3.28. Rights of the NIMs Insurer.......................................... 109
ARTICLE IV DISTRIBUTIONS............................................................ 109
SECTION 4.01. Advances............................................................ 109
SECTION 4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls................................................. 110
SECTION 4.03. Distributions on the REMIC Interests................................ 110
SECTION 4.04. Distributions....................................................... 111
SECTION 4.05. Monthly Statements to Certificateholders............................ 121
ARTICLE V THE CERTIFICATES......................................................... 125
SECTION 5.01. The Certificates.................................................... 125
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates........................................................ 127
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates................... 131
SECTION 5.04. Persons Deemed Owners............................................... 131
SECTION 5.05. Access to List of Certificateholders' Names and Addresses........... 131
-ii-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 5.06. Book-Entry Certificates............................................. 132
SECTION 5.07. Notices to Depository............................................... 133
SECTION 5.08. Definitive Certificates............................................. 133
SECTION 5.09. Maintenance of Office or Agency..................................... 133
SECTION 5.10. Authenticating Agents............................................... 133
ARTICLE VI THE DEPOSITOR AND THE SERVICER........................................... 134
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer............ 134
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer............ 134
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others... 135
SECTION 6.04. Limitation on Resignation of Servicer............................... 136
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds...................... 136
ARTICLE VII DEFAULT; TERMINATION OF SERVICER......................................... 137
SECTION 7.01. Events of Default................................................... 137
SECTION 7.02. Trustee to Act; Appointment of Successor............................ 138
SECTION 7.03. Notification to Certificateholders.................................. 139
ARTICLE VIII CONCERNING THE TRUSTEE................................................... 140
SECTION 8.01. Duties of the Trustee............................................... 140
SECTION 8.02. Certain Matters Affecting the Trustee............................... 141
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans............... 142
SECTION 8.04. Trustee May Own Certificates........................................ 143
SECTION 8.05. Trustee's Fees and Expenses......................................... 143
SECTION 8.06. Indemnification and Expenses of Trustee............................. 143
SECTION 8.07. Eligibility Requirements for Trustee................................ 144
SECTION 8.08. Resignation and Removal of Trustee.................................. 145
SECTION 8.09. Successor Trustee................................................... 145
SECTION 8.10. Merger or Consolidation of Trustee.................................. 146
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee....................... 146
SECTION 8.12. Tax Matters......................................................... 147
ARTICLE IX TERMINATION.............................................................. 149
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans.... 149
SECTION 9.02. Final Distribution on the Certificates.............................. 151
SECTION 9.03. Additional Termination Requirements................................. 152
-iii-
TABLE OF CONTENTS
(continued)
PAGE
----
ARTICLE X MISCELLANEOUS PROVISIONS................................................. 153
SECTION 10.01. Amendment........................................................... 153
SECTION 10.02. Counterparts........................................................ 155
SECTION 10.03. Governing Law....................................................... 155
SECTION 10.04. Intention of Parties................................................ 155
SECTION 10.05. Notices............................................................. 156
SECTION 10.06. Severability of Provisions.......................................... 156
SECTION 10.07. Assignment; Sales; Advance Facilities............................... 157
SECTION 10.08. Limitation on Rights of Certificateholders.......................... 158
SECTION 10.09. Inspection and Audit Rights......................................... 159
SECTION 10.10. Certificates Nonassessable and Fully Paid........................... 159
SECTION 10.11. Compliance with Regulation AB....................................... 159
SECTION 10.12. Third Party Rights.................................................. 159
SECTION 10.13. Additional Rights of the NIMs Insurer............................... 159
-iv-
TABLE OF CONTENTS
PAGE
----
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A INVESTMENT LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF BACK-UP CERTIFICATION OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF CLASS 1-A CAP CORRIDOR CONTRACT
EXHIBIT M-2 FORM OF CLASS 2-A CAP CORRIDOR CONTRACT
EXHIBIT M-3 FORM OF SUBORDINATE CERTIFICATE CAP CORRIDOR CONTRACT
EXHIBIT M-4 FORM OF CREDIT SUPPORT ANNEX RELATED TO THE CAP CORRIDOR CONTRACTS
EXHIBIT N [RESERVED]
EXHIBIT O FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER TO REGULATION S
BOOK-ENTRY CERTIFICATE FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE
OR DEFINITIVE CERTIFICATE
EXHIBIT P FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER PURSUANT TO RULE
144A FROM A HOLDER OF A REGULATION S BOOK-ENTRY CERTIFICATE OR DEFINITIVE
CERTIFICATE
EXHIBIT Q-1 FORM OF SWAP AGREEMENT
EXHIBIT Q-2 FORM OF CREDIT SUPPORT ANNEX RELATED TO THE SWAP AGREEMENT
EXHIBIT R FORM OF ASSESSMENT OF COMPLIANCE
EXHIBIT S SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
EXHIBIT T FORM OF XXXXXXXX-XXXXX CERTIFICATIONS
EXHIBIT U FORM OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT V FORM OF DELINQUENCY REPORT
EXHIBIT W XXXXX'X MORTGAGE LOAN DATA FILE
SCHEDULE X
SCHEDULE Y
SCHEDULE Z
-v-
POOLING AND SERVICING AGREEMENT, dated as of September 1, 2007 (the
"Agreement"), among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the "Depositor"), HOME LOAN SERVICES, INC., a Nevada
corporation, 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 Corridor Contract and the
Corridor 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 Sponsor in the FFFC Purchase
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 $106,205,972.015 (1)
1-SW1A $ 4,210,001.623 (2)
1-SW1B $ 4,210,001.623 (3)
1-SW2A $ 4,069,505.083 (2)
1-SW2B $ 4,069,505.083 (3)
1-SW3A $ 3,901,547.422 (2)
1-SW3B $ 3,901,547.422 (3)
1-SW4A $ 3,694,921.159 (2)
1-SW4B $ 3,694,921.159 (3)
1-SW5A $ 3,564,796.099 (2)
1-SW5B $ 3,564,796.099 (3)
1-SW6A $ 3,450,650.159 (2)
1-SW6B $ 3,450,650.159 (3)
1-SW7A $ 3,344,064.287 (2)
1-SW7B $ 3,344,064.287 (3)
1-SW8A $ 3,251,715.110 (2)
1-SW8B $ 3,251,715.110 (3)
1-SW9A $ 3,344,186.156 (2)
1-SW9B $ 3,344,186.156 (3)
1-SW10A $ 3,475,348.153 (2)
1-SW10B $ 3,475,348.153 (3)
1-SW11A $ 3,321,472.637 (2)
1-SW11B $ 3,321,472.637 (3)
1-SW12A $ 2,915,903.946 (2)
1-SW12B $ 2,915,903.946 (3)
1-SW13A $ 2,678,617.406 (2)
1-SW13B $ 2,678,617.406 (3)
1-SW14A $ 2,460,235.675 (2)
1-SW14B $ 2,460,235.675 (3)
1-SW15A $ 2,249,554.647 (2)
1-SW15B $ 2,249,554.647 (3)
1-SW16A $ 2,068,391.324 (2)
1-SW16B $ 2,068,391.324 (3)
1-SW17A $ 1,923,900.110 (2)
1-SW17B $ 1,923,900.110 (3)
1-SW18A $ 1,814,406.471 (2)
1-SW18B $ 1,814,406.471 (3)
1-SW19A $ 1,693,025.375 (2)
1-SW19B $ 1,693,025.375 (3)
1-SW20A $ 1,609,402.452 (2)
1-SW20B $ 1,609,402.452 (3)
1-SW21A $ 3,415,576.469 (2)
1-SW21B $ 3,415,576.469 (3)
1-SW22A $ 7,622,210.260 (2)
1-SW22B $ 7,622,210.260 (3)
1-SW23A $ 7,516,627.379 (2)
1-SW23B $ 7,516,627.379 (3)
1-SW24A $ 5,205,314.886 (2)
1-SW24B $ 5,205,314.886 (3)
1-SW25A $ 3,676,850.032 (2)
1-SW25B $ 3,676,850.032 (3)
1-SW26A $ 2,779,570.335 (2)
1-SW26B $ 2,779,570.335 (3)
1-SW27A $ 2,384,222.579 (2)
1-SW27B $ 2,384,222.579 (3)
-2-
1-SW28A $ 2,122,161.298 (2)
1-SW28B $ 2,122,161.298 (3)
1-SW29A $ 1,903,063.115 (2)
1-SW29B $ 1,903,063.115 (3)
1-SW30A $ 1,689,536.518 (2)
1-SW30B $ 1,689,536.518 (3)
1-SW31A $ 1,483,592.762 (2)
1-SW31B $ 1,483,592.762 (3)
1-SW32A $ 1,323,389.779 (2)
1-SW32B $ 1,323,389.779 (3)
1-SW33A $ 1,298,394.915 (2)
1-SW33B $ 1,298,394.915 (3)
1-SW34A $ 1,288,244.191 (2)
1-SW34B $ 1,288,244.191 (3)
1-SW35A $ 1,171,442.022 (2)
1-SW35B $ 1,171,442.022 (3)
1-SW36A $ 1,110,239.331 (2)
1-SW36B $ 1,110,239.331 (3)
1-SW37A $ 945,151.696 (2)
1-SW37B $ 945,151.696 (3)
1-SW38A $ 883,581.923 (2)
1-SW38B $ 883,581.923 (3)
1-SW39A $ 813,174.360 (2)
1-SW39B $ 813,174.360 (3)
1-SW40A $ 772,550.589 (2)
1-SW40B $ 772,550.589 (3)
1-SW41A $ 686,186.255 (2)
1-SW41B $ 686,186.255 (3)
1-SW42A $ 654,844.105 (2)
1-SW42B $ 654,844.105 (3)
1-SW43A $ 604,057.803 (2)
1-SW43B $ 604,057.803 (3)
1-SW44A $ 558,128.322 (2)
1-SW44B $ 558,128.322 (3)
1-SW45A $ 516,978.282 (2)
1-SW45B $ 516,978.282 (3)
1-SW46A $ 508,226.305 (2)
1-SW46B $ 508,226.305 (3)
1-SW47A $ 525,595.107 (2)
1-SW47B $ 525,595.107 (3)
1-SW48A $ 2,112,299.642 (2)
1-SW48B $ 2,112,299.642 (3)
2-SW2 $145,651,630.655 (4)
2-SW1A $ 5,773,626.377 (5)
2-SW1B $ 5,773,626.377 (6)
2-SW2A $ 5,580,948.417 (5)
-3-
2-SW2B $ 5,580,948.417 (6)
2-SW3A $ 5,350,610.078 (5)
2-SW3B $ 5,350,610.078 (6)
2-SW4A $ 5,067,241.341 (5)
2-SW4B $ 5,067,241.341 (6)
2-SW5A $ 4,888,786.901 (5)
2-SW5B $ 4,888,786.901 (6)
2-SW6A $ 4,732,246.341 (5)
2-SW6B $ 4,732,246.341 (6)
2-SW7A $ 4,586,073.713 (5)
2-SW7B $ 4,586,073.713 (6)
2-SW8A $ 4,459,425.390 (5)
2-SW8B $ 4,459,425.390 (6)
2-SW9A $ 4,586,240.844 (5)
2-SW9B $ 4,586,240.844 (6)
2-SW10A $ 4,766,117.347 (5)
2-SW10B $ 4,766,117.347 (6)
2-SW11A $ 4,555,091.363 (5)
2-SW11B $ 4,555,091.363 (6)
2-SW12A $ 3,998,891.554 (5)
2-SW12B $ 3,998,891.554 (6)
2-SW13A $ 3,673,475.094 (5)
2-SW13B $ 3,673,475.094 (6)
2-SW14A $ 3,373,984.825 (5)
2-SW14B $ 3,373,984.825 (6)
2-SW15A $ 3,085,055.353 (5)
2-SW15B $ 3,085,055.353 (6)
2-SW16A $ 2,836,606.676 (5)
2-SW16B $ 2,836,606.676 (6)
2-SW17A $ 2,638,450.390 (5)
2-SW17B $ 2,638,450.390 (6)
2-SW18A $ 2,488,290.029 (5)
2-SW18B $ 2,488,290.029 (6)
2-SW19A $ 2,321,827.125 (5)
2-SW19B $ 2,321,827.125 (6)
2-SW20A $ 2,207,146.048 (5)
2-SW20B $ 2,207,146.048 (6)
2-SW21A $ 4,684,146.031 (5)
2-SW21B $ 4,684,146.031 (6)
2-SW22A $ 10,453,153.740 (5)
2-SW22B $ 10,453,153.740 (6)
2-SW23A $ 10,308,356.621 (5)
2-SW23B $ 10,308,356.621 (6)
2-SW24A $ 7,138,606.114 (5)
2-SW24B $ 7,138,606.114 (6)
2-SW25A $ 5,042,458.468 (5)
-4-
2-SW25B $ 5,042,458.468 (6)
2-SW26A $ 3,811,922.665 (5)
2-SW26B $ 3,811,922.665 (6)
2-SW27A $ 3,269,739.921 (5)
2-SW27B $ 3,269,739.921 (6)
2-SW28A $ 2,910,347.202 (5)
2-SW28B $ 2,910,347.202 (6)
2-SW29A $ 2,609,874.385 (5)
2-SW29B $ 2,609,874.385 (6)
2-SW30A $ 2,317,042.482 (5)
2-SW30B $ 2,317,042.482 (6)
2-SW31A $ 2,034,609.738 (5)
2-SW31B $ 2,034,609.738 (6)
2-SW32A $ 1,814,906.221 (5)
2-SW32B $ 1,814,906.221 (6)
2-SW33A $ 1,780,628.085 (5)
2-SW33B $ 1,780,628.085 (6)
2-SW34A $ 1,766,707.309 (5)
2-SW34B $ 1,766,707.309 (6)
2-SW35A $ 1,606,523.978 (5)
2-SW35B $ 1,606,523.978 (6)
2-SW36A $ 1,522,590.169 (5)
2-SW36B $ 1,522,590.169 (6)
2-SW37A $ 1,296,187.804 (5)
2-SW37B $ 1,296,187.804 (6)
2-SW38A $ 1,211,750.577 (5)
2-SW38B $ 1,211,750.577 (6)
2-SW39A $ 1,115,193.140 (5)
2-SW39B $ 1,115,193.140 (6)
2-SW40A $ 1,059,481.411 (5)
2-SW40B $ 1,059,481.411 (6)
2-SW41A $ 941,040.745 (5)
2-SW41B $ 941,040.745 (6)
2-SW42A $ 898,057.895 (5)
2-SW42B $ 898,057.895 (6)
2-SW43A $ 828,409.197 (5)
2-SW43B $ 828,409.197 (6)
2-SW44A $ 765,421.178 (5)
2-SW44B $ 765,421.178 (6)
2-SW45A $ 708,987.718 (5)
2-SW45B $ 708,987.718 (6)
2-SW46A $ 696,985.195 (5)
2-SW46B $ 696,985.195 (6)
2-SW47A $ 720,804.893 (5)
2-SW47B $ 720,804.893 (6)
2-SW48A $ 2,896,822.858 (5)
-5-
2-SW48B $ 2,896,822.858 (6)
SWR (7) (7)
(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
Certificates or Related Mortgage
Class Initial Principal Balance Interest Rate Group
------- ------------------------- ------------- --------------------------------
LT1-A (1) (8) 1-A, R
LT2-A1 (1) (8) 2-A1
LT2-A2 (1) (8) 2-A2
LT2-A3 (1) (8) 2-A3
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
-6-
LTB-2 (1) (8) B-2
LTB-3 (1) (8) B-3
LTIX (2) (8) N/A
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
-7-
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 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 LT-IO Interest 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.
SWAP REMIC
Distribution Date Regular Interest
----------------- ----------------
13 Class 1-SW1A
Class 2-SW1A
13-14 Class 1-SW2A
Class 2-SW2A
13-15 Class 1-SW3A
Class 2-SW3A
13-16 Class 1-SW4A
Class 2-SW4A
13-17 Class 1-SW5A
Class 2-SW5A
13-18 Class 1-SW6A
Class 2-SW6A
13-19 Class 1-SW7A
Class 2-SW7A
13-20 Class 1-SW8A
Class 2-SW8A
13-21 Class 1-SW9A
Class 2-SW9A
13-22 Class 1-SW10A
Class 2-SW10A
13-23 Class 1-SW11A
Class 2-SW11A
13-24 Class 1-SW12A
Class 2-SW12A
13-25 Class 1-SW13A
Class 2-SW13A
13-26 Class 1-SW14A
Class 2-SW14A
13-27 Class 1-SW15A
Class 2-SW15A
13-28 Class 1-SW16A
-8-
Class 2-SW16A
13-29 Class 1-SW17A
Class 2-SW17A
13-30 Class 1-SW18A
Class 2-SW18A
13-31 Class 1-SW19A
Class 2-SW19A
13-32 Class 1-SW20A
Class 2-SW20A
13-33 Class 1-SW21A
Class 2-SW21A
13-34 Class 1-SW22A
Class 2-SW22A
13-35 Class 1-SW23A
Class 2-SW23A
13-36 Class 1-SW24A
Class 2-SW24A
13-37 Class 1-SW25A
Class 2-SW25A
13-38 Class 1-SW26A
Class 2-SW26A
13-39 Class 1-SW27A
Class 2-SW27A
13-40 Class 1-SW28A
Class 2-SW28A
13-41 Class 1-SW29A
Class 2-SW29A
13-42 Class 1-SW30A
Class 2-SW30A
13-43 Class 1-SW31A
Class 2-SW31A
13-44 Class 1-SW32A
Class 2-SW32A
13-45 Class 1-SW33A
Class 2-SW33A
13-46 Class 1-SW34A
Class 2-SW34A
13-47 Class 1-SW35A
Class 2-SW35A
13-48 Class 1-SW36A
Class 2-SW36A
13-49 Class 1-SW37A
Class 2-SW37A
13-50 Class 1-SW38A
Class 2-SW38A
13-51 Class 1-SW39A
Class 2-SW39A
13-52 Class 1-SW40A
Class 2-SW40A
13-53 Class 1-SW41A
Class 2-SW41A
13-54 Class 1-SW42A
Class 2-SW42A
-9-
13-55 Class 1-SW43A
Class 2-SW43A
13-56 Class 1-SW44A
Class 2-SW44A
13-57 Class 1-SW45A
Class 2-SW45A
13-58 Class 1-SW46A
Class 2-SW46A
13-59 Class 1-SW47A
Class 2-SW47A
13-60 Class 1-SW48A
Class 2-SW48A
(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 Principal Class of Related
Class Balance Rate Certificates
----- ----------------- ---- ----------------
UT1-A (1) (2) 1-A
UT2-A1 (1) (2) 2-A1
UT2-A2 (1) (2) 2-A2
UT2-A3 (1) (2) 2-A3
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 and
the Residual Interest shall equal the initial principal balance of its
Class of Related Certificates.
(2) The interest rates on each of these REMIC Regular Interests and the
Residual Interest 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 Cap 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
-10-
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
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.
Class Initial Class Principal Amount Interest Rate
----- ------------------------------ -------------
1-A (1) (2)
2-A1 (1) (2)
2-A2 (1) (2)
2-A3 (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:
-11-
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 account mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Accommodated Mortgage Loan: Any Mortgage Loan listed as an "accommodated"
Mortgage Loan on the Mortgage Loan Schedule.
Accountant's Attestation: As defined in Section 3.18(b) hereof.
Accrual Period: With respect to each Class of LIBOR Certificates, 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 and
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 LIBOR Certificates, 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 and 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 Form 10-D Disclosure: As defined in Section 3.20 hereof.
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.
Adjustment Date Waiver: With respect to each Accommodated Mortgage Loan,
the modification effected pursuant to a letter from the Servicer to the
Mortgagor of the related Mortgage Note that caused the initial Adjustment Date
and mortgage margin value with respect to such Accommodated Mortgage Loan to be
amended such that each will occur and become effective, respectively, in
connection with the sixty-first Monthly Payment due thereunder.
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 (or, with respect to the interest-only Mortgage Loans,
payments of scheduled interest) (net of the Servicing Fee) on the related
Mortgage Loans that were due during the applicable Due Period and not received
as of the close of business on the related Determination Date, except as
provided in Section 4.01 hereof, less the aggregate amount of any
-12-
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 (i) any Mortgage Loan that is 150 days
delinquent or more, (ii) shortfalls in principal and interest due to bankruptcy
proceedings, the application of the Relief Act or similar laws or certain
permitted modifications of the Mortgage Loans and (iii) the principal portion of
any amount paid on a Balloon Loan, there will be no obligation to make advances
and, provided further, however, that with respect to any Mortgage Loan that has
been converted to an REO Property which is less than 150 days delinquent, the
obligation to make Advances shall only be to payments of interest (subject to
the exceptions described above and net of the related Servicing Fees), to be
calculated after taking into account rental income.
Advance Facility: A financing or other facility as described in Section
10.07.
Advancing Person: A Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.
Affected Mortgage Loans: Mortgage Loans that are sixty (60) or more days
Delinquent, including for this purpose (x) (i) any such Mortgage Loans that were
repurchased from the Issuing Entity, (ii) Mortgage Loans that were substituted
by the Sponsor and (iii) Mortgage Loans that have been subject to a Servicing
Modification, in each case during the period which includes the previous twelve
(12) Distribution Dates, (y) Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Issuing Entity, and (z) Mortgage
Loans in bankruptcy and foreclosure.
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
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 1-A Certificate Principal Balance, the Class 2-A1 Certificate
Principal Balance, the Class 2-A2 Certificate Principal Balance, the Class 2-A3
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, the "Appraised Value" of a
Mortgaged Property 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
-13-
the origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assessment of Compliance: As defined in Section 3.18(a) hereof.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property 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 1-A Available Funds Cap, the Class
2-A Available Funds Cap or the Weighted Average Available Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 or 30 years which provides for level monthly payments of
principal and interest based on a 30-, 40- or 50-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.
Business Day: Any day other than (1) a Saturday or a Sunday, (2) a day on
which banking institutions in the State of Illinois, State of Pennsylvania or in
the City of New York, New York are authorized or obligated by law or executive
order to be closed, or (3) with respect to Home Loan Services, Inc. only, a day
on which the New York Stock Exchange is closed.
Cap Contract Counterparty: The Bank of New York, and any successor thereto.
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 Xxxxxxx Xxxxx First
Xxxxxxxx Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2007-5." Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
-14-
Certificate Group: Either of Certificate Group One or Certificate Group
Two.
Certificate Group One: The Class 1-A and Class R Certificates. For purposes
of Section 2.07 hereof, Certificate Group One shall be related to Group One.
Certificate Group Two: The Class 2-A 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 (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the immediately preceding sentence, however, to the extent any
excess referred to in the immediately preceding sentence is attributable to
distributions of proceeds of the Swap Agreement, such sentence shall be applied
by substituting "Class C Unpaid Realized Loss Amount" for "Class C Interest
Carry Forward Amount". Notwithstanding the foregoing on any Distribution Date
relating to a Due Period in which a Subsequent Recovery has been received by the
Servicer, 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
(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(a)
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.
-15-
Class: All Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.
Class 1-A 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 Stated Principal Balance of the Group One Mortgage
Loans to the Stated Principal Balance of the total pool of Mortgage Loans)
allocable to the Group One Mortgage Loans of any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) owed to
the Swap Counterparty for such Distribution Date and (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.
The Class 1-A Available Funds Cap shall relate to the Class 1-A and Class R
Certificates.
Class 1-A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class 1-A Certificates.
Class 1-A Certificates: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
Class 1-A Corridor Contract: The confirmation and agreement, including the
schedule thereto and the related credit support annex (attached as Exhibit M-4
hereto), between the Trustee on behalf of the Issuing Entity and the Cap
Contract Counterparty (attached as Exhibit M-1 hereto), with respect to the
Class 1-A and Class R Certificates.
Class 1-A Corridor Contract Notional Balance: With respect to any
Distribution Date, the Class 1-A Corridor Contract Notional Balance set forth
for such Distribution Date in the Class 1-A LIBOR Table (attached as Schedule I
to Exhibit M-1 hereto).
Class 1-A Corridor Contract Termination Date: The Distribution Date in June
2014.
Class 1-A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A Pass-Through Rate on
the Class 1-A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class 1-A
Current Interest or a Class 1-A 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 1-A
Certificates.
Class 1-A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class 1-A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
1-A Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class 1-A Pass-Through Rate for the
related Accrual Period.
-16-
Class 1-A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.8500% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.7000% per annum.
Class 1-A 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 Stated Principal Balance of the Group One Mortgage Loans to
the Stated Principal Balance of the total pool of Mortgage Loans) allocable to
the Group One Mortgage Loans of any Net Swap Payments or Swap Termination
Payments owed to the Swap Counterparty for such Distribution Date (other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated Principal
Balance of the Group One Mortgage Loans 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.
The Class 1-A Maximum Rate Cap shall relate to Class 1-A and Class R
Certificates.
Class 1-A Pass-Through Rate: For the first Distribution Date, 5.97188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class 1-A Margin, (2) the Class 1-A Available Funds Cap for such
Distribution Date and (3) the Class 1-A Maximum Rate Cap for such Distribution
Date.
Class 1-A Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class 1-A 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 (A) with respect to any Distribution Date on
which the Class 1-A and Class R Certificates are outstanding and the Certificate
Principal Balances of the Class 2-A Certificates is reduced to zero, the Class
2-A Principal Distribution Amount in excess of the amount necessary to reduce
the Certificate Principal Balance of the Class 2-A Certificates to zero will be
applied to increase the Class 1-A Principal Distribution Amount and (B) with
respect to any Distribution Date thereafter, the Class 1-A Principal
Distribution Amount will equal the Class A Principal Distribution Amount.
Class 1-A Upper Collar: With respect to each Distribution Date with respect
to which payments are received on the Group One Corridor Contract, a rate equal
to the lesser of One-Month LIBOR and (x) 10.150% per annum for the Distribution
Dates from October 2007 through September 2008 and (y) 12.000% per annum for the
Distribution Dates from August 2011 through June 2014.
Class 2-A 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 Stated Principal Balance of the Group Two Mortgage
Loans to the Stated Principal Balance of the total pool of Mortgage Loans)
allocable to the Group Two Mortgage Loans of any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) owed to
the Swap Counterparty for such Distribution Date, and (y) the aggregate Stated
Principal Balance of the Group Two Mortgage Loans 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
-17-
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period. The Class 2-A Available Funds Cap shall
relate to the Class 2-A Certificates.
Class 2-A Certificates: Any of the Class 2-A1, Class 2-A2 and Class 2-A3
Certificates.
Class 2-A Corridor Contract: The confirmation and agreement, including the
schedule thereto and the related credit support annex (attached as Exhibit M-4
hereto), between the Trustee on behalf of the Issuing Entity and the Cap
Contract Counterparty (attached as Exhibit M-2 hereto), with respect to the
Class 2-A Certificates.
Class 2-A Corridor Contract Notional Balance: With respect to any
Distribution Date, the Class 2-A Corridor Contract Notional Balance set forth
for such Distribution Date in the Class 2-A LIBOR Cap Table (attached as
Schedule I to Exhibit M-2 hereto).
Class 2-A Corridor Contract Termination Date: The Distribution Date in
February 2014.
Class 2-A 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 Stated Principal Balance of the Group Two Mortgage Loans to
the Stated Principal Balance of the total pool of Mortgage Loans) allocable to
the Group Two Mortgage Loans of any Net Swap Payments or Swap Termination
Payments owed to the Swap Counterparty for such Distribution Date (other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated Principal
Balance of the Group Two Mortgage Loans 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.
The Class 2-A Maximum Rate Cap shall relate to the Class 2-A Certificates.
Class 2-A Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class 2-A Certificates and (ii) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that (A) with respect to any Distribution Date on which the
Class 2-A Certificates are outstanding and the Certificate Principal Balances of
the Class 1-A and Class R Certificates is reduced to zero, the Group One
Principal Distribution Amount in excess of the amount necessary to reduce the
Certificate Principal Balance of the Class 1-A Certificates and Class R
Certificates to zero will be applied to increase the Class 2-A Principal
Distribution Amount and (B) with respect to any Distribution Date thereafter,
the Class 2-A Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Class 2-A Upper Collar: With respect to each Distribution Date with respect
to which payments are received on the Class 2-A Corridor Contract, a rate equal
to the lesser of One-Month LIBOR and (x) 9.490% per annum for the Distribution
Dates from October 2007 through September 2008 and (y) 12.000% per annum for the
Distribution Dates from August 2011 through February 2014.
-18-
Class 2-A1 Certificate: Any Certificate designated as a "Class 2-A1
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
Class 2-A1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class 2-A1 Certificates.
Class 2-A1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A1 Pass-Through Rate on
the Class 2-A1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class 2-A1
Current Interest or a Class 2-A1 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 2-A1
Certificates.
Class 2-A1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class 2-A1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
2-A1 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class 2-A1 Pass-Through Rate for the
related Accrual Period.
Class 2-A1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.7000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.4000% per annum.
Class 2-A1 Pass-Through Rate: For the first Distribution Date, 5.82188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class 2-A1 Margin, (2) the Class 2-A Available Funds Cap for such
Distribution Date and (3) the Class 2-A Maximum Rate Cap for such Distribution
Date.
Class 2-A2 Certificate: Any Certificate designated as a "Class 2-A2
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
Class 2-A2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class 2-A2 Certificates.
Class 2-A2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A2 Pass-Through Rate on
the Class 2-A2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class 2-A2
Current Interest or a Class 2-A2 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 2-A2
Certificates.
Class 2-A2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class 2-A2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
2-A2 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class 2-A2 Pass-Through Rate for the
related Accrual Period.
-19-
Class 2-A2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.0000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 2.0000% per annum.
Class 2-A2 Pass-Through Rate: For the first Distribution Date, 6.12188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class 2-A2 Margin, (2) the Class 2-A Available Funds Cap for such
Distribution Date and (3) the Class 2-A Maximum Rate Cap for such Distribution
Date.
Class 2-A3 Certificate: Any Certificate designated as a "Class 2-A3
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
Class 2-A3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class 2-A3 Certificates.
Class 2-A3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A3 Pass-Through Rate on
the Class 2-A3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class 2-A3
Current Interest or a Class 2-A3 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 2-A3
Certificates.
Class 2-A3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class 2-A3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
2-A3 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class 2-A3 Pass-Through Rate for the
related Accrual Period.
Class 2-A3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.2500% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 2.5000% per annum.
Class 2-A3 Pass-Through Rate: For the first Distribution Date, 6.37188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class 2-A3 Margin, (2) the Class 2-A Available Funds Cap for such
Distribution Date and (3) the Class 2-A Maximum Rate Cap for such Distribution
Date.
Class A Certificate Principal Balance: As of any date of determination, the
sum of the Class 1-A Certificate Principal Balance, the Class 2-A1 Certificate
Principal Balance, the Class 2-A2 Certificate Principal Balance, the Class 2-A3
Certificate Principal Balance and the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class 1-A Certificates, the Class 2-A
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
-20-
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) 43.80% 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 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 a "Class B-1
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as 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 Class B-1
Current Interest or a Class B-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 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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 7.62188% 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
-21-
(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) 80.20% 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 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."
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, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as 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 Class B-2
Current Interest or a 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.
-22-
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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 7.62188% 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) 83.60% 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 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
-23-
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, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as 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 Class B-3
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 7.62188% 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 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
-24-
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) 85.90% 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, executed by the Trustee and authenticated by the
Authenticating Agent in substantially the form set forth in 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.
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
-25-
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 (other than amounts so
added attributable to Subsequent Recoveries or proceeds of the Swap Agreement).
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 (A) pursuant to the last sentence
of the definition of "Certificate Principal Balance" or (B) attributable to
distributions of proceeds of the Swap Agreement.
Class LT1-A 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 LT2-A1 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 LT2-A2 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 LT2-A3 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.
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.
-26-
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% of 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.
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.
-27-
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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class 1-M1 Certificates.
Class M-1 Certificates: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
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 Class M-1
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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, 2.0000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.0000% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 7.12188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the
-28-
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) 52.30% 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 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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Certificates: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
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 Class M-2
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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.
-29-
Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 7.62188% 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
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)
59.80% 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 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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Certificates: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
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 Class X-0
-00-
Xxxxxxx Xxxxxxxx or a 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 Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates 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, 3.0000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 4.5000% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 8.12188% 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 (C) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 64.30% 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 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."
-31-
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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Certificates: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as Exhibit A
hereto, representing the right to distributions as set forth herein.
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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class M-4
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 7.62188% 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), (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) and (E) the Class M-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 68.50% 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.
-32-
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."
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, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as 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 Class M-5
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 7.62188% 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.
-33-
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), (D) 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 (E) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 72.50% 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 and 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, executed by the Trustee and authenticated by
the Authenticating Agent in substantially the form set forth as 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 Class M-6
Current Interest or a Class M-6 Interest Carry Forward Amount that is recovered
as a voidable
-34-
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 Current Interest or Interest Carry Forward
Amounts 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, 2.5000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.7500% per annum.
Class M-6 Pass-Through Rate: For the first Distribution Date, 7.62188% 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 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) 76.40% 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
-35-
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
Authenticating Agent in substantially the form set forth in Exhibit A,
representing the right to distributions as set forth herein.
Class Payment Shortfall: As defined in Section 2.07(d)(ii) herein.
Class R Certificate: The Class R Certificate executed by the Trustee and
authenticated by the Authenticating Agent 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 Class R 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.
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 Current Interest or Interest Carry Forward Amounts
on such prior Distribution Dates and (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, 0.8500% per annum and, as of any Distribution Date
after the Initial Optional Termination Date, 1.7000% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 5.97188% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Class 1-A Available Funds Cap for such
Distribution Date and (3) the Class 1-A Maximum Rate Cap for such Distribution
Date.
Class SWR Interest: The sole class of "residual interest" in the SWAP
REMIC.
Closing Date: October 10, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Accounts 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, "Home Loan
Services, Inc., as servicer for LaSalle Bank National Association, as trustee,
in trust for registered holders of Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Series 2007-5,
-36-
Mortgage Loan Asset-Backed Certificates". Funds in the Collection Account shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Commission: The Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a Mortgage Loan that are received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer in an amount not to exceed the product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, equal to the amount of interest at the Net Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th day of such
preceding calendar month; provided that any month consisting of less than 30
days shall be deemed to consist of 30 days.
Corresponding Certificates: With respect to the Class LT1-A Interest, the
Class 1-A and Class R Certificates. With respect to the Class LT2-A1 Interest,
the Class 2-A1 Certificates. With respect to the Class LT2-A2 Interest, the
Class 2-A2 Certificates. With respect to the Class LT2-A3 Interest, the Class
2-A3 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. 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.
Corridor Contract: Any of the Class 1-A Corridor Contract, the Class 2-A
Corridor Contract or the Subordinate Certificate Corridor Contract.
Corridor 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 Issuing Entity and designated "LaSalle Bank
National Association, as trustee, in trust for registered holders of Xxxxxxx
Xxxxx First Xxxxxxxx Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-5." Funds in the Corridor Contract Account shall be
held in trust for the Issuing Entity for the uses and purposes set forth in this
Agreement.
Corridor Contract Notional Balance: Any of the Class 1-A Corridor Contract
Notional Balance, the Class 2-A Corridor Contract Notional Balance or the
Subordinate Certificate Corridor Contract Notional Balance.
Corridor Contract Termination Date: Any of the Class 1-A Corridor Contract
Termination Date, the Class 2-A Corridor Contract Termination Date or the
Subordinate Certificate Corridor Contract Termination Date.
-37-
Corridor Posted Collateral Account: The segregated Eligible Account created
and maintained by the Trustee pursuant to Section 4.04(k)(iv) in the name of the
Trustee for the benefit of the Issuing Entity and designated "LaSalle Bank
National Association, as trustee, in trust for registered holders of Xxxxxxx
Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage Loan
Asset-Backed Certificates." Funds in the Corridor Posted Collateral Account
shall be held in trust for the Issuing Entity for the uses and purposes set
forth in the Corridor Contracts.
Current Interest: Any of the Class 1-A Current Interest, the Class 2-A1
Current Interest, the Class 2-A2 Current Interest, the Class 2-A3 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, the
Class R Current Interest and the Class C Current Interest.
Cut-off Date: September 1, 2007.
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 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. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
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.
-38-
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 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding 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 after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in October 2007.
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.
Eligible Account: An account that is (i) a segregated account maintained
with a federal or state chartered depository institution (A) the short-term
obligations of which are rated A-1 or better by S&P and P-1 by Xxxxx'x at the
time of any deposit therein or (B) the long term unsecured debt obligations of
which are rated at least "AA-" by S&P and "A+" by Fitch if the deposits are to
be held in the account more than 30 days; following a downgrade, withdrawal, or
suspension of such institution's rating, each account should promptly (and in
any case within not more than 30 calendar days) be moved to a qualifying
institution or to one or more segregated trust accounts in the trust department
of such institution, if permitted, (ii) a segregated trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution or trust company with trust powers acting in its fiduciary
-39-
capacity or (iii) any other segregated account or accounts of a depository
institution acceptable to the NIMs Insurer and the Rating Agencies (as evidenced
by a letter from each Rating Agency that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
assigned to the Classes of the Certificates then rated by the Rating Agencies).
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee or the Servicer.
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 by the United States Department of
Labor (or any other applicable underwriter's exemption granted to the
Underwriter 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 S&P, Xxxxx'x
or Fitch.
ERISA Restricted Certificates: The Class C Certificates and Class P
Certificates and any other Certificate, as long as the acquisition and holding
of such other Certificate is not covered by and exempt under any underwriter's
exemption granted by the United States Department of Labor.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Exception Report: As defined in Section 2.02 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.
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)
$56,078,879 over (B) the Pool 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
-40-
respect to such Distribution Date and (y) the greater of (a) 14.10% of the Pool
Stated Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the Pool 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.
FFFC: First Franklin Financial Corporation, or any successor thereto.
FFFC Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of
September 1, 2007, between the Depositor, as purchaser, and the Sponsor, as
seller.
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 related
Maximum Rate Cap, the sum of (A) 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 related 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 (AA) 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 (BB) the sum of (x) the quotient obtained by dividing
(I) an amount equal to the proceeds, if any, payable under the related Corridor
Contract with respect to such Distribution Date by (II) the aggregate
Certificate Principal Balance of each of the Classes of Certificates to which
such Corridor Contract relates for such Distribution Date and (y) the quotient
obtained by dividing (I) an amount of 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 (B)
the unpaid portion of any such excess from prior Distribution Dates (and
interest accrued thereon at the then applicable Pass-Through Rate, without
giving effect to the related Available Funds Cap or the related Maximum Rate
Cap) and (C) 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.
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.
-41-
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
Mortgage Loan Schedule attached hereto as Exhibit B as a Group One Mortgage
Loan.
Group One Net WAC: The Net WAC of Group One.
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
Mortgage Loan Schedule attached hereto as Exhibit B as a Group Two Mortgage
Loan.
Group Two Net WAC: The Net WAC of Group Two.
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.
Guarantee: The guarantee by Xxxxxxx Xxxxx Bank & Trust Co., FSB in favor of
the Depositor, dated as of September 1, 2007, in connection with certain
obligations of FFFC pursuant to the FFFC Purchase Agreement.
Indenture: An indenture relating to the issuance of the NIM Notes, which
may (but need not) be guaranteed by a 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
(other than the Class P Certificates), 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.
-42-
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 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, 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 pursuant to any Insurance Policy or any other
insurance policy covering such Mortgage Loan or Mortgaged Property, 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 released either to the
Mortgagor or to the holder of a senior lien on the related Mortgaged Property 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.
Interest Carry Forward Amount: Any of the Class 1-A Interest Carry Forward
Amount, the Class 2-A1 Interest Carry Forward Amount, the Class 2-A2 Interest
Carry Forward Amount, the Class 2-A3 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, October 5, 2007.
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 less the Servicing Fee, (2)
all Advances relating to interest with respect to the Mortgage Loans, (3) all
Compensating Interest with respect to the Mortgage Loans, (4) Liquidation
Proceeds with respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to interest) collected during the related Prepayment Period
relating to Principal Prepayments in full and during the preceding calendar
month relating to Principal Prepayments in part, (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 (6)
all Prepayment Charges received with respect to the Mortgage Loans during the
related Prepayment Period relating to Principal Prepayments in full and during
the preceding calendar month relating to Principal Prepayments in part, less (A)
all Non-Recoverable Advances relating to interest and (B) other amounts
-43-
reimbursable (including without limitation indemnity payments) to the Servicer
and the Trustee pursuant to this Agreement allocable to interest.
Issuing Entity: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series
2007-5.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one month.
LIBOR Business Day: Any day on which banks in the City of London, England,
Chicago, Illinois 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 Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, 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 an 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 and (Y) the sales
price of the related Mortgaged Property at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LT1-A Interest, the Class
LT2-A1 Interest, the Class LT2-A2 Interest, the Class LT2-A3 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.
-44-
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 Certificate Group One to (ii) the excess of (A) the
aggregate Stated Principal Balance of Group Two over (B) the current Certificate
Principal Balance of Certificate Group Two.
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 1-A Maximum Rate Cap, the Class 2-A
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.
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, the mortgage, deed of trust or
other instrument with all riders thereto creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note.
-45-
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 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 Exhibit B, setting forth the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the borrower's 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;
(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;
-46-
(G) the Gross Margin; and
(H) the lifetime rate cap;
(xiii) the location of the related Mortgaged Property;
(xiv) a code indicating whether a Prepayment Charge is applicable;
(A) the period during which such Prepayment Charge is in effect;
(B) the amount of such Prepayment Charge;
(C) any limitations or other conditions on the enforceability of
such Prepayment Charge; and
(D) any other information pertaining to the Prepayment Charge
specified in the related Mortgage Note;
(xv) the Credit Score and date obtained;
(xvi) the MIN; and
(xvii) a code indicating whether a Mortgage Loan is an Accommodated
Mortgage Loan.
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 Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. 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 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, including, with respect to each Accommodated Mortgage Loan, the letter
from the Servicer to the Mortgagor reflecting the Adjustment Date Waiver.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan.
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 the Servicing Fee Rate.
-47-
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 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).
NIMs Insurer: Any of the one or more insurers, if any, that may be
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.
NIM Notes: The net interest margin or excess cashflow securities to be
issued pursuant to any Indenture.
NIMs Insurer Default: As defined in Section 10.13.
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 related to the Mortgage Loans.
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 related to the Mortgage
Loans.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A, Class M, and Class B Certificates.
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, or
Trustee, the Servicer (or any other officer customarily performing functions
similar to those performed by any of the above designated officers and 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.
-48-
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 from Reuters, as of
11:00 a.m. (London time) on such Interest Determination Date (or if such service
is no longer offered, such other service for displaying LIBOR or comparable
rates as may be reasonably selected by the Trustee) or (b) if such rate does not
appear on Reuters as of 11:00 a.m. (London time), the Trustee will determine
such rate on the basis of 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 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 or the Servicer 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 and the Servicer, (2) not have any direct
financial interest in the Depositor or the Servicer or in any Affiliate of
either such party, and (3) not be connected with the Depositor or the Servicer
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 (a) of Section 9.01 hereof.
Optional Termination Amount: The repurchase price received by the Trustee
in connection with any repurchase of all of the Mortgage Loans pursuant to
Section 9.01.
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 amount paid by or on behalf of the Servicer or the NIMs
Insurer in connection with the exercise of an Optional Termination pursuant to
Section 9.01(a)(1) will be distributed on the Certificates; (ii) any
unreimbursed indemnity amounts, fees or out-of-pocket costs and expenses owed to
the Trustee or the Servicer 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 unpaid Net Swap
Payments and any Swap Termination Payment owed to the Swap Counterparty; such
Swap Termination Payment shall include any payment to the Swap Counterparty
-49-
resulting from the optional termination of the Swap Agreement after the Optional
Termination Date but prior to the final distribution to the Certificates.
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 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).
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.
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 Issuing Entity created
pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and other
assets of the Issuing Entity, including the Corridor Contracts,
Corridor Contract Account and
-50-
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
Issuing Entity;
(iii) through the appropriate subtrust, as applicable, receiving
collections on the Mortgage Loans, 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 Issuing Entity 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
the timely payment of such obligations is backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency 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 their 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
-51-
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 by the Trustee or its 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 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
Issuing Entity 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.
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
-52-
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.
Posted Collateral: As defined in the Swap Agreement or the Corridor
Contracts, as applicable.
Preliminary Statement: The paragraphs in the preamble to this Agreement
that precede Article I.
Prepayment Assumption: A rate of prepayment, as described in the Prospectus
Supplement in the definition of "Modeling Assumptions," relating to the Offered
Certificates.
Prepayment Charges: Any prepayment premium or charge payable by a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.
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 and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first
-53-
day to and including the 14th day of the month of such Distribution Date), 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 exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment.
Prepayment Period: With respect to any Distribution Date (i) with respect
to prepayments in full or any other amounts received in connection with a
Principal Prepayment in full, the period beginning with the opening of business
on the 15th day of the calendar month preceding the month in which such
Distribution Date occurs (or in the case of the first Distribution Date,
beginning with the opening of business on the Cut-off Date) and ending on the
close of business on the 14th day of the month in which such Distribution Date
occurs and (ii) with respect to partial prepayments and any other amounts
received in connection with a payment in part, the calendar month preceding the
month of such Distribution Date.
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) the 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 in full 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 the 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 relate to principal and represent payment in full), (6) all
Subsequent Recoveries received with regard to the applicable Prepayment Period
and (7) all other collections and recoveries in respect of principal, including
any partial prepayments of principal, with regard to the applicable Prepayment
Period, less (A) all Non-Recoverable Advances relating to principal with respect
to the Mortgage Loans and (B) other amounts reimbursable (including without
limitation indemnity payments) to the Servicer and the Trustee pursuant to this
Agreement 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 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 October 9, 2007,
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Sponsor pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal
-54-
balance of the Mortgage Loan as of the date of such purchase together with any
unreimbursed Servicing Advances, (ii) accrued interest thereon 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 Issuing Entity in connection with any violation
relating to such Mortgage Loan of any predatory or abusive lending law.
QIB: A "qualified institutional buyer" within the meaning of Rule 144A.
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) with respect to 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 the first Distribution Date, the Closing Date.
With respect to any other Distribution Date, the close of business on the last
Business Day of the month preceding the month in which the applicable
Distribution Date occurs.
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 Servicer.
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 Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506, 1.531 (Jan. 7, 2005)) or by the staff of
the Commission, or as may be provided by the Commission or its staff from time
to time.
Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section,
-55-
subsection, definition or term, as the case may be, or any successor thereto, in
each case as the same may be amended from time to time.
Regulation S Book-Entry Certificates: Certificates sold in offshore
transactions in reliance on Regulation S in the form of one or more permanent
global Certificates in definitive, fully registered form without interest
coupons, which shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Trustee, as custodian for DTC and
registered in the name of a nominee of DTC.
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.
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: One or more Mortgage Loans 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 (or in the case of a substitution
of more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate Stated
Principal Balance), after deduction of the principal portion of the Scheduled
Payment due in the month of
-56-
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 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.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee, 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: For any Distribution Date until the aggregate
Certificate Principal Balance of the Class A Certificates has been reduced to
zero, (i) the aggregate Stated Principal Balance of the Mortgage Loans as of the
prior Distribution Date less the outstanding Certificate Principal Balance of
the Class A Certificates prior to any distributions on such Distribution Date
divided by (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the prior Distribution Date. For any Distribution Date on or after the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero, (i) the aggregate Stated
Principal Balance of the Mortgage Loans as of the prior Distribution Date less
the outstanding Certificate Principal Balance of the Class M-1 Certificates
prior to any distributions on such Distribution Date divided by (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the prior
Distribution Date.
Requirements: Any rules or regulations promulgated pursuant to the
Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
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.
-57-
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.
Xxxxxxxx-Xxxxx Certification: Has the meaning set forth in Section 3.20.
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.
Securities Act: The Securities Act of 1933, as amended.
Servicer: Home Loan Services, Inc., or its successor in interest.
Servicer Remittance Date: With respect to any Distribution Date, the later
of (x) the date that is two (2) Business Days after the 15th day of the month in
which such Distribution Date occurs and (y) the 18th day (or if such day is not
a Business Day, the immediately succeeding Business Day) of the month in which
such Distribution Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, inspection, restoration and protection of a Mortgaged Property,
including without limitation advances in respect of prior liens, 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,
substitutions of trustees on deeds of trust or Assignments of Mortgage to the
extent not otherwise recovered from the related Mortgagors 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; and 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.
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) 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
-58-
Balance of such Mortgage Loan as of the preceding Distribution Date for the
period covered by such payment of interest.
Servicing Fee Rate: 0.50% per annum for each Mortgage Loan.
Servicing Modification: In connection with the determination of whether a
Stepdown Trigger Event has occurred, with respect to any Mortgage Loan that is
in default or with respect to which default is, in the judgment of the Servicer,
reasonably foreseeable, any modification that is effected by the Servicer that
results in any change to the payment terms of such Mortgage Loan.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Trustee by the Servicer on the Closing Date pursuant to this Agreement, as such
lists 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.
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 completion, correction or manipulation 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 (and
reported to the Trustee) of the aggregate maximum probable exposure of the
outstanding Certificates to the Swap Agreement and the Corridor Contracts, as
applicable.
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 Stated Principal
Balance of the Mortgage Loans, prior to the distribution of the Principal
Distribution Amount on such Distribution Date.
Sponsor: First Franklin Financial Corporation, 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)
-59-
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 Remittance Date prior
to such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to (x) the last day of the related Prepayment
Period for Principal Prepayments in full and (y) the last day of the preceding
calendar month for Principal Prepayments in part, 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 on or before the last day of the related Prepayment Period for
Liquidation Proceeds in full and the last day of the preceding calendar month
for Liquidation Proceeds in part. Notwithstanding the foregoing, the Stated
Principal Balance of a Liquidated Loan shall be deemed to be zero.
Stepdown Date: The earlier to occur of: (A) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class 1-A Certificates
and Class 2-A Certificates has been reduced to zero; or (B) the later to occur
of (1) the Distribution Date in October 2010 or (2) the first Distribution Date
on which (A) the Class A Certificate Principal Balance (after giving effect to
distributions of the Principal Funds amount for such Distribution Date) is less
than or equal to (B) 43.80% of the aggregate Stated Principal Balance of the
Mortgage Loans.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
-60-
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ ---------------------------------------
October 2009 - September 2010 0.95% with respect to October 2009, plus an
additional 1/12th 1.20% for each month
thereafter
October 2010 - September 2011 2.15% with respect to October 2010, plus an
additional 1/12th of 1.25% for each month
thereafter
October 2011 - September 2012 3.40% with respect to October 2011, plus an
additional 1/12th of 1.20% for each month
thereafter
October 2012 - September 2013 4.60% with respect to October 2012, plus an
additional 1/12th of 1.15% for each month
thereafter
October 2013 - September 2014 5.75% with respect to October 2013, plus an
additional 1/12th of 0.30% for each month
thereafter
October 2014 and thereafter 6.05%
-61-
Stepdown Trigger Event: The situation that exists (I) with respect to any
Distribution Date on or after the Stepdown Date until the Certificate Principal
Balance of the Class A Certificates has been reduced to zero, if (a) the
quotient, measured on a rolling three-month basis, of (1) the aggregate Stated
Principal Balance of the Affected Mortgage Loans and (2) the sum of (A) the
Stated Principal Balance of all the Mortgage Loans as of the preceding Servicer
Remittance Date and (B) the Stated Principal Balance of the Mortgage Loans that
were repurchased from the Issuing Entity during the period that includes the
previous twelve (12) Distribution Dates, equals or exceeds the product of (i)
28.00% and (ii) the Required Percentage or (b) the quotient (expressed as a
percentage) of (1) the aggregate Realized Losses incurred from the Cut-off Date
through the last day of the calendar month preceding such Distribution Date and
(2) the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date exceeds the Stepdown Required Loss Percentage; and (II) with
respect to any Distribution Date on or after the Stepdown Date and the
Certificate Principal Balance of the Class A Certificates has been reduced to
zero, if (a) the quotient of (1) the aggregate Stated Principal Balance of the
Affected Mortgage Loans and (2) the sum of (A) the Stated Principal Balance of
all the Mortgage Loans as of the preceding Servicer Remittance Date and (B) the
Stated Principal Balance of the Mortgage Loans that were repurchased from the
Issuing Entity during the period that includes the previous twelve (12)
Distribution Dates, equals or exceeds the product of (i) 33.00% and (ii) the
Required Percentage or (b) the quotient (expressed as a percentage) of (1) the
aggregate Realized Losses incurred from the Cut-off Date through the last day of
the calendar month preceding such Distribution Date and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds the
Stepdown Required Loss Percentage shown above. For purposes hereof, for any
Distribution Date, the calculation of "rolling three-month basis" above requires
first, the calculation of the quotient described in (a) of this definition for
each of the three (3) Due Periods immediately prior to such Distribution Date,
second, the addition of such 3 quotients and third, dividing the sum of such 3
quotients by 3.
Subcontractor: Any outsourcer that performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to 5% or more of the
Mortgage Loans under the direction or authority of a Servicer (measured by
aggregate Stated Principal Balance of the Mortgage Loans, annually at the
commencement of the calendar year prior to the year in which an Assessment of
Compliance is required to be delivered, multiplied by a fraction, the numerator
of which is the number of months during which such Subcontractor performs such
discrete functions and the denominator of which is 12, or, in the case of the
year in which the Closing Date occurs, the number of months elapsed in such
calendar year).
Subordinate Certificate Corridor Contract: The confirmation and agreement,
including the schedule thereto and the related credit support annex (attached as
Exhibit M-4 hereto), between the Trustee on behalf of the Issuing Entity and the
Cap Contract Counterparty (attached as Exhibit M-3 hereto), with respect to the
Class M and Class B Certificates.
Subordinate Certificate Corridor Contract Notional Balance: With respect to
any Distribution Date, the Subordinate Certificate Corridor Contract Notional
Balance set forth for such Distribution Date in the Subordinate Certificate
LIBOR Cap Table (attached as Schedule I to Exhibit M-3 hereto).
-62-
Subordinate Certificate Corridor Contract Termination Date: The
Distribution Date in June 2013.
Subordinate Certificate Upper Collar: With respect to each Distribution
Date with respect to which payments are received on the Subordinate Certificate
Corridor Contract, a rate equal to the lesser of One-Month LIBOR and (x) 7.110%
per annum for the Distribution Dates from October 2007 through September 2008
and (y) 12.000% per annum for the Distribution Dates from January 2012 through
June 2013.
Subordinate Certificates: The Class M and Class B Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
reimbursed to the Servicer related to Liquidated Mortgage Loans) 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 pursuant to a Subservicing Agreement and is responsible for the
performance of the material servicing functions required to be performed by the
Servicer under this Agreement that are identified in Item 1122(d) of Regulation
AB with respect to 10% or more of the Mortgage Loans under the direction or
authority of the Servicer (measured by aggregate Stated Principal Balance of the
Mortgage Loans, annually at the commencement of the calendar year prior to the
year in which an Assessment of Compliance is required to be delivered,
multiplied by a fraction, the numerator of which is the number of months during
which such Subservicer services the related Mortgage Loans and the denominator
of which is 12, or, in the case of the year in which the Closing Date occurs,
the number of months elapsed in such calendar year). Any subservicer shall meet
the qualifications set forth in Section 3.02.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: As defined in 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, (i) in
which the Swap Agreement will be held, certain distributions to
Certificateholders will be made and any Swap Termination Payments or Net Swap
Payments received from the Swap Counterparty will be deposited as set forth in
Section 4.04 hereof and (ii) out of which any Swap Termination Payments or Net
Swap Payments owed to the Swap Counterparty will be paid.
Supplemental Interest Trust Trustee: LaSalle Bank National Association, a
national banking association, not in its individual capacity, but solely in its
capacity as trustee of the Supplemental Interest Trust 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.
Swap Account: The separate Eligible Account created and maintained by the
Supplemental Interest Trust Trustee pursuant to Section 4.04(l) in the name of
the Supplemental Interest Trust Trustee for the benefit of the Supplemental
Interest Trust and designated "LaSalle Bank National Association, as trustee, in
trust for registered holders of Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Series 2007-5, Mortgage Loan Asset-Backed Certificates." Funds in the
Swap Account shall be held in trust for the Supplemental Interest Trust for the
uses and purposes set forth in this Agreement.
-63-
Swap Agreement: The confirmation and agreement, including the schedule
thereto and the related credit support annex (attached as Exhibit Q-2 hereto),
between the Swap Counterparty and the trustee of the Supplemental Interest Trust
for the benefit of the Certificateholders (attached as Exhibit Q-1 hereto) or
any other 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.
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 Business Day immediately preceding each
Distribution Date.
Swap Posted Collateral Account: The segregated Eligible Account created and
maintained by the Supplemental Interest Trust Trustee pursuant to Section
4.04(l) in the name of the Supplemental Interest Trust Trustee for the benefit
of the Supplemental Interest Trust and designated "LaSalle Bank National
Association, as trustee, in trust for registered holders of Xxxxxxx Xxxxx First
Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage Loan Asset-Backed
Certificates." Funds in the Swap Posted Collateral Account shall be held in
trust for the Supplemental Interest Trust for the uses and purposes set forth in
the Swap Agreement
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 pursuant
to 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.
Trust Fund: The corpus of the Issuing Entity 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
and 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 and/or the related Mortgaged Properties; (v) all proceeds
of the conversion, voluntary or involuntary, of
-64-
any of the foregoing into cash or other liquid property; (vi) the Corridor
Contracts and the Corridor 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; it being understood that certain duties of the Trustee under
Sections 2.01, 2.02 and 3.13 with respect to the possession and administration
of the Mortgage Files generally may be carried out by a custodian engaged by the
Trustee.
Uncertificated Class C Interest: An uncertificated REMIC Regular Interest
having the characteristics described in the Preliminary Statement.
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 Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UT1-A 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 UT2-A1, Class UT2-A2 and Class UT2-A3 Interests, a per annum
rate equal to the weighted average of the interest rate for the Class LTII2B 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 of the interest
rates of Class LTII1B and Class LTII2B Interests for such Distribution Date
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 (weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of each
Mortgage Group, the current aggregate Certificate Principal Balance of the Class
1-A and Class R Certificates, in the case of Group One, or the Class 2-A
Certificates, in the case of Group Two) of the Class 1-A Available Funds Cap and
the Class 2-A Available Funds Cap.
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
-65-
Stated Principal Balance of each Mortgage Group, the current aggregate
Certificate Principal Balance of the Class 1-A and Class R Certificates, in the
case of Group One, or the Class 2-A Certificates, in the case of Group Two) of
the Class 1-A Maximum Rate Cap and the Class 2-A 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, either (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; (iii) a "High-Cost Home Mortgage 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.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with the Trustee the following documents or instruments with respect
to each Mortgage Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the order
of LaSalle Bank National Association, as trustee for the Xxxxxxx Xxxxx
First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-5, 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 of the Mortgage
Loan to [____________________].
(B) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage together 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 together with all riders thereto certified to be a 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 together with all riders thereto, 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 and the assignment thereof to MERS, with
-66-
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 in blank or, to "LaSalle Bank National
Association, as trustee for the Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-5."
(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.
(F) Originals of all assumption and modification agreements, if any,
and, for each Accommodated Mortgage Loan, documents evidencing the
Adjustment Date Waiver.
(G) If in connection with any Mortgage 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 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 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 to be made such endorsement.
(H) With respect to any Mortgage 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. In the event an
Assignment of Mortgage is not recorded, the Servicer shall have no
liability for its failure to receive and act on notices related to such
Assignment of Mortgage.
(I) With respect to the Adjustment Date Waivers, the Depositor and the
Servicer shall cause delivery of such documents to the Trustee by no later
than 45 days following the Closing Date. For avoidance of doubt, the
Depositor, the Servicer and the Trustee acknowledge and agree that no
Adjustment Date Waivers have been delivered to or received by the Trustee
on or prior to the Closing Date and, therefore, any initial certification
provided by the Trustee on or prior to the Closing Date shall not include
any certification or reference to the Adjustment Date Waivers.
-67-
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. Neither the Depositor nor the Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest
therein. The Depositor and the Servicer 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 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 promptly indicate 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 the 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 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 (x) the
FFFC Purchase Agreement, including the Depositor's right, title and interest in
the representations and warranties contained in the FFFC Purchase Agreement and
the benefit of the repurchase obligations and the obligation of the Sponsor
contained in the FFFC Purchase 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 and (y) the Guarantee. The
Trustee hereby accepts such assignment, and shall be entitled to exercise all
rights of the Depositor under the Guarantee and the FFFC Purchase 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.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans
-68-
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 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
Depositor and the Trustee within forty-five (45) Business Days of the Closing
Date.
The Trustee acknowledges receipt of the three Corridor Contracts (forms of
which are attached hereto as Exhibits M-1, M-2 and M-3) and the FFFC Purchase
Agreement.
The Trustee acknowledges receipt of the Swap Agreement 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 Supplemental Interest
Trust Trustee.
The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer to review each Mortgage File delivered to it within sixty (60) days
after the Closing Date. The Trustee will ascertain and to certify, within
seventy (70) days of the Closing Date, to the NIMs Insurers, the Depositor and
the Servicer that all documents required by Section 2.01 (A)-(B), (C) (if
applicable), and (D)-(E), and the documents if actually received by it, under
Section 2.01(F), 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 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 shall promptly (and in any
event within no more than five (5) Business Days) after such finding so notify
the NIMs Insurer, the Servicer, the Sponsor and the Depositor. In addition, the
Trustee 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 seventy (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(c), within
ninety (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
Issuing Entity within ninety (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
-69-
signed by a Servicing Officer or receipt of such deposit by the Trustee, the
Trustee, upon receipt of a Request for Release and certification of the Servicer
of such required deposit, 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
Certificateholders, the NIMs Insurer, the Depositor or the Trustee pursuant to
the FFFC Purchase Agreement.
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 Trustee shall keep confidential the name of each Mortgagor
except as required for the performance of this Agreement 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 from
sources other than the other parties hereto, (ii) disclosure of any and all
information (A) if required to do so 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 business of the Trustee or that of any
Affiliate, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the 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 having a need to know the
same, provided that the Trustee advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Depositor.
Within seventy (70) days of the Closing Date, the Trustee 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 NIMs Insurer,
the Servicer 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 FFFC
Purchase 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 FFFC Purchase
Agreement and has duly authorized, by all necessary corporate action on its
-70-
part, the execution, delivery and performance of this Agreement and the
FFFC Purchase Agreement; and this Agreement and the FFFC Purchase
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 FFFC
Purchase Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the FFFC Purchase 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 enforceability of this
Agreement and the FFFC Purchase Agreement or the ability of the Depositor
to perform its obligations under this Agreement and the FFFC Purchase
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 FFFC Purchase 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 Sponsor with respect to
the Mortgage Loans in the FFFC Purchase Agreement, which have been assigned to
the Trustee hereunder, were made as of the Closing Date as specified in the FFFC
Purchase 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.
(c) Upon discovery by any of the NIMs Insurer, the Depositor, the
Servicer, the Sponsor or the Trustee (or its custodian) 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
-71-
interests of the Certificateholders, the party discovering such breach shall
give prompt written notice to the other parties. Within ninety (90) days of the
discovery of such breach of any representation or warranty, the Depositor shall
cause the Sponsor to 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. If a breach of the representations and warranties set forth in
the FFFC Purchase Agreement exists solely due to the unenforceability of a
Prepayment Charge, the Trustee or the other party having notice thereof shall
notify the Servicer thereof and not seek to enforce the repurchase remedy
provided for herein unless such Mortgage Loan is not current. 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 FFFC Purchase Agreement, if the Sponsor substitutes for a
Mortgage Loan for which there is a breach of any representation or warranty in
the FFFC Purchase 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 FFFC Purchase 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. The Sponsor indemnifies and holds the Issuing Entity, the Trustee, the
Depositor, the Servicer, the NIMs Insurer 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 Issuing Entity, the Trustee, the Depositor, the Servicer,
the NIMs Insurer 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 FFFC Purchase Agreement
to the extent that any such action causes (i) any federal or state tax to be
imposed on the Issuing Entity 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.
With respect to any Mortgage Loan repurchased by the Sponsor pursuant to
the FFFC Purchase 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 in the Certificate Account pursuant
to Section 3.05. Upon receipt by the Trustee of notice from the Servicer of
receipt by the Servicer of the full amount of the Purchase Price for a Deleted
Mortgage Loan, and upon receipt by the Trustee of the Mortgage File for a
Replacement Mortgage Loan substituted for a Deleted Mortgage Loan and a Request
for Release, the Trustee shall release and reassign to the Sponsor 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 (and its custodian) shall have no 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 pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Sponsor must deliver to the Trustee the Mortgage File for
the Replacement Mortgage Loan containing the documents set forth in
-72-
Section 2.01 along with a written certification certifying as to the Mortgage
Loan satisfying all requirements under the definition of Replacement Mortgage
Loan and 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 shall review the Mortgage File with respect to each Replacement Mortgage
Loan and certify to the Depositor that all documents required by Section
2.01(A)-(B), (C) (if applicable), and (D)-(E) 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 Trustee for deposit into the
Certificate Account by the Sponsor 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 shall 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.
The Depositor 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.
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 FFFC Purchase
Agreement, including all applicable representations and warranties thereof
included in the FFFC Purchase 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 and (ii) of the Sponsor
set forth in the FFFC Purchase 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.
-73-
(f) The Depositor shall notify the Servicer and the Trustee when any
NIM Notes are issued with the contact information of the issuer thereof and when
such NIM Notes are no longer outstanding and if such NIM Notes are insured by a
NIMs Insurer, the contact information with respect to such NIMs Insurer.
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
corporation 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 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 and 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
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.
-74-
(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.
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 five (5) Business Days of discovery) give written
notice thereof to the other parties. In connection therewith, the Depositor
shall cause the Sponsor, at the Sponsor's option, to 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 ninety (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 direction of the
Sponsor, shall reconvey to the Sponsor 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
-75-
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 Corridor Contract and the Corridor Contract Account, (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 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, the Class LTR Interest
and the Residual Interest shall be represented by the Class R Certificate. The
Class SWR Interest and the 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 Certificates (other than the Class R
Certificate), Class M Certificates, 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
-76-
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 Corridor 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 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 Corridor Contract Account, the Corridor Contracts, the
Supplemental Interest Trust which holds the Swap Agreement, 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, (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 and (iv) provide, upon applying for and receiving the
tax identification number for the grantor trust from the IRS, a properly
completed Form W-9 on behalf of such grantor trust to the Swap Counterparty and
Cap Contract Counterparty.
(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
-77-
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
(other than any Net Swap Payment or Swap Termination Payment made to the Swap
Counterparty) 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 the designation "1" 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 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 the 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.
-78-
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 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 "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.
-79-
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 Issuing Entity 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 its duties
and obligations set forth herein, the Trustee shall indemnify the NIMs Insurer
and the Issuing Entity 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
-80-
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 that 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.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Issuing Entity
The Issuing Entity 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 Issuing Entity,
the Corridor Contracts, and to execute and deliver on behalf of the Issuing
Entity, and to perform the duties and obligations of the Issuing Entity under
the Corridor 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 in writing, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof. In addition, the Supplemental Interest Trust Trustee is hereby
authorized and directed to execute and deliver, on behalf of the Supplemental
Interest Trust and the Swap Agreement, and to execute and deliver on behalf of
the Issuing Entity, and to perform the duties and obligations of the
Supplemental Interest Trust under any agreement or instrument related to the
Swap Agreement, in each case in such form as the Depositor shall direct or shall
approve in writing, 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 Issuing Entity
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 or SFAS 140.
SECTION 2.13. Depositor Notification of NIM Notes
The Depositor shall notify the Servicer and the Trustee in writing when NIM
Notes are issued and of the identity and contact information of the NIMs
Insurer, if applicable, and when all previously issued NIM Notes are no longer
outstanding.
-81-
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 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 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 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 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 Issuing Entity 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. Notwithstanding anything in this Agreement to the contrary, including
Section 3.05, 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, to the extent that the Servicer is not permitted to execute and
deliver such documents pursuant to the preceding sentence. 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 in such form as shall
be prepared by the Servicer and agreed to by the Trustee and the Servicer to
execute and file any and all documents necessary to fulfill the obligations of
the Servicer under this Section 3.01.
Upon request of the Servicer, the Trustee shall furnish the Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicer to service and administer the Mortgage
Loans. The Trustee shall not be responsible for and the Servicer shall indemnify
the Trustee for any action taken by the Servicer pursuant to the application of
any power of
-82-
attorney to the extent indemnification by the Servicer is required by Section
3.25 and provided that the Servicer shall have no obligation to indemnify the
Trustee for such action to the extent such action was taken pursuant to and in
accordance with specific written instructions from the Trustee, which
instructions are not based on Servicer's recommendations or proposals.
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.
The Servicer shall not be required to make any Advance or Servicing Advance
with respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer and the Trustee shall have at least 10 days' notice of the
issuance of any NIM Notes.
The Servicer shall deliver a list of Servicing Officers and specimen
signatures to the Trustee by the Closing Date.
In accordance with Accepted Servicing Practices the Servicer will fully
furnish (for the period it services 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 except as the Servicer deems prudent for prevention or resolution
of disputes with Mortgagors.
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 and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. 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)).
The Servicer (and any successor thereto hereunder) hereby acknowledges that
with respect to each Accommodated Mortgage Loan, (i) the first Adjustment Date
and (ii) a reduction in the mortgage margin will occur on, and become effective
as of, respectively, the sixty-first Monthly Payment due thereunder. The
Servicer's data with respect to the servicing of the Accommodated Mortgage Loans
shall at all times reflect that the first Adjustment Date and mortgage margin
reduction with respect to each Accommodated Mortgage Loan shall occur on, and
become effective as of, respectively, each such Accommodated Mortgage Loan's
sixty-first Mortgage Payment. The Servicer shall maintain such data such that
any successor to the Servicer will give effect to the Adjustment Date Waiver
with respect to each Accommodated Mortgage Loan.
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
-83-
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 Subservicing 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 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 Trustee and 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. If the Servicer is terminated, these Subservicing Agreements will
automatically terminate in accordance with the terms therein unless the
successor servicer elects otherwise.
(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.
(c) The Servicer shall not permit a Subservicer to perform any
servicing responsibilities hereunder with respect to the Mortgage Loans unless
that Subservicer first agrees in writing with the Servicer to deliver an
Assessment of Compliance and an Accountant's Attestation in such manner and at
such times that permits that Servicer to comply with Section 3.17 of this
Agreement.
(d) The Servicer may enter into a special servicing advisory agreement
with a holder of the Class R Certificate and/or one or more other classes of
Subordinate Certificates issued by the Issuing Entity or of a net interest
margin trust holding certificates issued by the Issuing Entity and/or an advisor
designated by the holder of the Class R Certificate. Pursuant to such agreement,
the Servicer may provide such holder or advisor, in its capacity as special
servicing advisor, with loan-level information with respect to the Mortgage
Loans, and the holder of the Class R Certificate or the special servicing
advisor designated by the holder of the Class R Certificate may advise the
Servicer with respect to the commencement of foreclosure proceedings or other
actions to liquidate such Mortgage Loans and/or any other efforts to maximize
recoveries with respect to such Mortgage Loans.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer
-84-
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither 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 3.29, 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, 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 arising out of any acts or omissions of the predecessor servicer
hereunder, (ii) obligated to make Advances or Servicing 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, 2.03 or 2.05 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 terminated or resigning 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 a 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 the 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 thirty (30) days of the date of the Trustee's
invoice thereof, such amounts shall be payable out of the Certificate Account;
provided that if the Servicer has been terminated by reason of an Event of
Default, the terminated servicer shall reimburse the Issuing Entity for any such
expense incurred by the Issuing Entity 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 if the Servicer has been terminated by reason of an Event of Default,
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.
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
-85-
Loans to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Required Insurance Policy. Consistent
with the foregoing, the Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any default interest charge, or (ii) subject
to Section 3.01 and applicable REMIC requirements, 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 clause (ii) above and its related provisos, 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 and not subject to the requirement to make Advances
pursuant to Section 4.01, 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 determining which course of action permitted by this sentence
it shall pursue, the Servicer shall adhere to the standards of Section 3.01. The
Servicer's analysis supporting any forbearance and the conclusion that any
forbearance meets the standards of Section 3.01 shall be reflected in writing in
the Mortgage File.
[The Servicer will be entitled to receive a fee from amounts on deposit in
the Collection Account for the costs associated with such forbearances pursuant
to this Section 3.05(a) in amounts as follows: (i) for each modification of the
terms of a Mortgage Loan, $500; (ii) for each presale resulting in satisfaction
of a Mortgage Loan, $900; and (iii) for each completed repayment plan of a
Mortgage Loan, $250, such amount to be withdrawn by the Servicer from the
Collection Account pursuant to Section 3.08(a)(xiii) on or prior to the Servicer
Remittance Date immediately following the completion of such forbearance
activity.]
With respect to the Mortgage Loans affected by a hurricane or other natural
disaster, if the Mortgaged Property is located in public and individual
assistance counties, as designated by Federal Emergency Management Agency (as
set forth on its website xxx.xxxx.xxx), the Servicer (or the Subservicer, if
such Servicer is no longer servicing Mortgage Loans), may, at its sole option,
cease collection activities, charging late fees and credit reporting activity
for all Mortgagors in such counties for a period of time and, if reasonably
prudent, may extend such period as long as it deems necessary. In addition, the
Servicer (or the Subservicer, if applicable) may suspend all foreclosure and
bankruptcy activity relating to such Mortgage Loans for a period of time and, if
reasonably prudent, may extend such period as long as it deems necessary.
(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 or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
-86-
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) the collection of the Prepayment
Charge or of a similar type of prepayment premium would be considered
"predatory" or "illegal" pursuant to written guidance published by any
applicable federal, state or local regulatory authority having jurisdiction over
such matters or has been challenged by any such authority, or (v) unless the
Depositor has notified the Servicer that there are NIM Notes outstanding, there
is a certified class action in which a similar type of prepayment premium is
being challenged. 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 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 initially maintain, on behalf of
Trustee for the benefit of the Certificateholders, a Collection Account. The
Servicer shall deposit into such Collection Account daily, within two (2)
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 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) Prepayment
Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to either
the Mortgagor or the holder of a senior lien on the Mortgaged Property 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;
-87-
(vii) any amounts required to be deposited by the Servicer pursuant to
Section 3.10 hereof;
(viii) all Advances made by the Servicer pursuant to Section 4.01;
(ix) all Prepayment Charges; and
(x) 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 late payment charges, insufficient funds charges 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, 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 remitted by the Servicer. Rather, such fees and charges 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 Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. Not later than twenty (20) days after each Distribution Date, the
Servicer shall make available to the Trustee 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 for deposit in the Certificate Account;
(ii) the Purchase Price and any Substitution Adjustment Amount;
(iii) any amount required to be deposited by the Trustee pursuant to
Section 3.05(f) in connection with any losses on Permitted Investments; and
(iv) the Optional Termination Amount paid by the Servicer or one of
its affiliates, or the NIMs Insurer, if any, pursuant to Section 9.01.
-88-
Any amounts received by the Trustee which are required to be deposited in
the Certificate Account by the Servicer may be invested in Permitted Investments
on the Business Day on which they were received. The foregoing requirements for
remittance by the Servicer and deposit by the Servicer into the Certificate
Account shall be exclusive. If the Servicer fails to remit any funds due by the
time designated herein, the Servicer shall pay to the Trustee, for its own
account, interest accrued on such funds at the prime rate as set forth in The
Wall Street Journal from and including the applicable due date, to but excluding
the day such funds are paid to the Trustee. 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 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 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 shall, and
each institution that maintains the Certificate Account may but shall not be
required to, 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 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 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 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. All income and gain net
of any losses realized from amounts on deposit in the Certificate Account shall
be for the benefit of the Trustee and shall be remitted to or withdrawn by it
monthly as provided herein. 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.
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, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made
-89-
pursuant to Sections 3.01 hereof (with respect to taxes and 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 "non-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
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.
The Servicer may from time to time provide the Depositor, and any Person
designated by the Depositor, with reports and information regarding the Mortgage
Loans, including without limitation, information requested by the Depositor or
the Originator of the Mortgage Loans for required institutional risk control. In
addition, subject to limitations of applicable privacy laws, the Servicer may
make public information regarding performance of the Mortgage Loans.
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:
(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 of interest that equals the Servicing Fee for
the period with respect to which such interest payment was made, 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 Advancing 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, Liquidation Proceeds (which include
Condemnation Proceeds and Insurance 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);
-90-
(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) [Reserved];
(vii) 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 (vii) 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 and
including any Subsequent Recoveries related to any Liquidated Loan) that
represent late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06;
(viii) 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 Sections 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;
(ix) 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 pursuant to Sections 3.04, 3.25 or 6.03 hereof
provided that reimbursement therefor would constitute "unanticipated" expenses
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(x) 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 (x) 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;
(xi) to pay the Servicer any unpaid Servicing Fees for any Mortgage
Loan upon such Mortgage Loan being charged off and upon termination of the
obligations of the Servicer;
(xii) to withdraw pursuant to Section 3.05 any amount deposited in the
Collection Account and not required to be or incorrectly deposited therein or
amounts previously deposited but returned as unpaid due to insufficient funds or
other denial by the related Mortgagor's banking institution;
(xiii) to pay the Servicer any fees for the costs associated with
forbearances pursuant to Section 3.05(a); and
(xiv) to clear and terminate the Collection Account upon termination
of this Agreement pursuant to Section 9.01 hereof.
-91-
In addition, the Servicer will use commercially reasonable efforts to cause
to be withdrawn from the Collection Account no later than 2:30 p.m. Eastern
Time, but in any case no later than 4:00 p.m. Eastern Time on the Servicer
Remittance Date, the Interest Funds and the Principal Funds (for this purpose
only, neither Interest Funds nor Principal Funds shall include a deduction for
any amount reimbursable to the Trustee unless such amounts have actually been
reimbursed from such funds at the discretion of the Servicer), 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 and
Principal Funds on the Servicer Remittance Date, the Servicer shall pay, out of
its own funds, interest on such amount at a rate equal to the "prime rate" as
published by The Wall Street Journal at such time for each date or part thereof.
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 (vii) above.
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:
(i) to withdraw pursuant to Section 3.05 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 pay to the Trustee 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 Trustee earnings on or investment income with
respect to funds in or credited to the Certificate Account.
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance
The Servicer shall cause to be maintained, for each first lien Mortgage
Loan, hazard insurance with extended coverage in an amount, to the extent
permitted by applicable law, that is at least equal to the lesser of (i) the
estimated replacement value of the improvements that are part of such Mortgaged
-92-
Property which may be the last known coverage, 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 such 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 required under the standards 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 a first lien Mortgaged Property is located 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 Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the outstanding principal balance of the related Mortgage Loan,
(ii) the estimated replacement value of the improvements that are part of such
Mortgaged Property which may be the last known coverage, 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
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; 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; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause that would adversely affect or
jeopardize coverage under
-93-
any Required Insurance Policy. In such event, the Servicer shall make reasonable
efforts to enter into an assumption and modification agreement 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 law or the Mortgage, the Mortgagor remains liable thereon. If the
foregoing is not permitted under applicable law, the Servicer is authorized 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 Note. In addition to the
foregoing, the Servicer shall not be required to enforce any "due-on-sale"
clause in accordance with Accepted Servicing Practices, if in the reasonable
judgment of the Servicer not entering into an assumption and modification
agreement with a Person to whom such property shall be conveyed and releasing
the original Mortgagor from liability would be in the best interests of the
Certificateholders. The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this Agreement. The
Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement (indicating the Mortgage File to which
it relates), which copy shall be added by the Trustee to the related Mortgage
File and which 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. In connection with any such assumption or
substitution agreement, the Monthly Payment on the related Mortgage Loan shall
not be changed but shall remain as in effect immediately prior to the assumption
or substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Servicer
for consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any transfer or assumption which the
Servicer reasonably believes, in accordance with Accepted Servicing Practices,
it is restricted by law from preventing, for any reason whatsoever.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation
(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
-94-
liquidation of the related Mortgaged Property and, if applicable, as a
Non-Recoverable Servicing Advance, as contemplated in Section 3.08 hereof.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee, on behalf of the Certificateholders, or its
nominee (which nominee shall not be the Servicer). 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 an Affiliate thereof 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 each Determination
Date. 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 Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or reasonably foreseeable
default on a Mortgage Loan, the Servicer shall dispose of such Mortgaged
Property prior to the expiration of three years from the end of the year of its
acquisition by the Issuing Entity or, at the expense of the Issuing Entity,
obtain, in accordance with applicable procedures for obtaining an automatic
extension of the grace period, more than sixty (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 addressed to the Trustee (such Opinion
of Counsel not to be an expense of the Trustee or the NIMs Insurer), to the
effect that the holding by the Issuing Entity of such Mortgaged Property
subsequent to such three-year period or extension will not result in the
imposition of taxes on "prohibited transactions" of the Issuing Entity 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 Issuing Entity may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel). Notwithstanding any other provision of this Agreement,
no Mortgaged Property acquired by the Issuing Entity 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 Issuing Entity in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Issuing Entity 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 under section 860G(c) of the Code or otherwise, unless the Servicer or
the Depositor has agreed to indemnify and hold harmless the Trustee and the
Issuing Entity 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 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.
-95-
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 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, shall be applied 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 income shall be deemed, for all purposes in 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 the 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.
Notwithstanding the foregoing provisions of this Section 3.12 or any other
provision of this Agreement, with respect to any Mortgage Loan as to which the
assistant vice president for foreclosures or the vice president of default
management of the Servicer has actual knowledge (which shall not be presumed due
to any documents received by the Servicer) of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Servicer shall not,
on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as
a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, or take any other action with respect to, such Mortgaged
Property, if, as a result of any such action, the Trustee, the Issuing Entity or
the Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer believes, based on its reasonable
judgment and a report prepared by a Person who regularly conducts environmental
audits using customary industry standards, that:
(1) such Mortgaged Property is in material compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Issuing Entity to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) it is probable that there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which additional investigation, testing, monitoring, containment, clean-up
or remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the Issuing
Entity to take such actions with respect to the affected Mortgaged Property.
The Servicer shall forward a copy of the environmental audit report to the
Depositor and the Trustee. The cost of the environmental audit report
contemplated by this Section 3.12 shall be advanced by the Servicer, subject to
the Servicer's right to be reimbursed therefor from the Collection Account, such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in the best
economic interest of the Issuing Entity to take such actions as are necessary to
bring any such Mortgaged Property into compliance
-96-
with applicable environmental laws, or to take such action with respect to the
containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes or petroleum-based materials affecting any such
Mortgaged Property, then the Servicer may take such action as it deems to be in
the best economic interest of the Issuing Entity; provided that any amounts
disbursed by the Servicer pursuant to this Section 3.12 shall constitute
Advances. The cost of any such compliance, containment, clean-up or remediation
shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account, such right of reimbursement
being prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans. If the Servicer decides not to take such action, it may not
obtain title to such Mortgaged Property.
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, 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)(vii) 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 accrued and unpaid interest (to the extent no Advance has been
made for such amount) on the Mortgage Loan, at the applicable Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to be
distributed; fourth, as a recovery of principal of the Mortgage Loan; and fifth,
to any prepayment charges.
The net proceeds 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)(vii) 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, as a recovery of principal; and fourth, to accrued and unpaid
interest (to the extent no Advance has been made for such amount) on the 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.
(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) [Reserved].
(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 (provided that the Servicer has
determined that no net recovery is possible through foreclosure proceedings or
other liquidation of the related Mortgaged Property), (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. As to any Mortgage Loan that becomes 120 days delinquent, the Servicer may
obtain a broker's price opinion, the cost of which will be reimbursable as a
Servicing Advance. After obtaining the broker's price opinion, the Servicer will
determine, in its reasonable business judgment, whether a net recovery is
possible
-97-
through foreclosure proceedings or other liquidation of the related Mortgage
Property. If the Servicer determines that no such recovery is possible, it must
charge off the related Mortgage Loan at the time it becomes 180 days delinquent.
Once a Mortgage Loan has been charged off, the Servicer will discontinue making
Advances, the Servicer will not be entitled to future Servicing Fees (except as
provided below) with respect to such Mortgage Loan, and the Mortgage Loan will
be treated as a Liquidated Mortgage Loan. If the Servicer determines that such
net recovery is possible through foreclosure proceedings or other liquidation of
the related Mortgaged Property on a Mortgage Loan that becomes 180 days
delinquent, the Servicer will continue to be entitled to Servicing Fees, the
Servicer need not charge off such Mortgage Loan and may continue making
Advances, and the Servicer will continue to report the Mortgage Loan to the
Trustee as being serviced by the Servicer.
(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 not be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, except to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date that is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged off loan will be released
to the majority holder of the Class C Certificates and thereafter, (i) the
majority holder of the Class C Certificates (as identified with contact
information in writing to the Servicer by the Depositor) will be entitled to any
amounts subsequently received in respect of any such released loans, subject to
a servicing fee, (ii) the servicing thereof and the servicing fee shall be
pursuant to a servicing agreement between the Depositor and the Servicer if the
Servicer continues to service such loan, (iii) the majority holder of the Class
C Certificates may designate any servicer to service any such released loan and
(iv) the majority holder of the Class C Certificates may sell any such released
loan to a third party.
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 a copy of such request, the Trustee or its custodian
shall promptly release the related Mortgage File to the Servicer, the cost of
which may be charged to the Servicer by the Trustee, 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 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 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
-98-
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, and the cost of delivery of the Mortgage File may be charged to
the Servicer by the Trustee. 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 custodian shall release the related Mortgage File(s) within four (4)
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 this 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. The Servicer shall not pay
penalties or damages due to the Trustee's or its designee's negligent failure to
release the related Mortgage File or the Trustee's or its designee's negligent
failure to execute and release documents in a timely manner, and such amounts
shall be Servicer Advances.
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) above.
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
may deliver or cause to be delivered to the Trustee for signature, 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 to be returned to the Trustee promptly after possession
thereof shall have been released by the Trustee 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 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 and the Servicer shall have delivered to the Trustee 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.
The Servicer shall not have any liability for and shall be excused from the
performance of the Agreement to the extent the Servicer is unable to perform due
to the Trustee's or the custodian's failure to
-99-
release the related Mortgage File or the Trustee's or the custodian's failure to
execute and release documents in a timely manner.
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, 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), bad check charges,
modification fees and similar fees and charges payable by the Mortgagor,
Prepayment Interest Excess, all income and gain net of any losses realized from
Permitted Investments in the Collection Account, and any other benefits arising
from the Collection Account and the Escrow Account shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account
and the Escrow Account pursuant to Sections 3.05, 3.06 or 3.12(a) hereof.
Additionally, the Servicer will be entitled to receive a fee from amounts on
deposit in the Collection Account for the costs associated with certain
forbearances with respect to Mortgage Loans in amounts as specified in Section
3.05(a) herein. The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder 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, as
applicable, access to the documentation regarding the Mortgage Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without
-100-
charge, but only 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. The Servicer shall provide to the Trustee access to its records
regarding the Mortgage Loans upon reasonable prior notice and during regular
business hours.
SECTION 3.17. Annual Statement as to Compliance
Not later than (a) March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) or (b) with respect to any calendar
year during which an annual report on Form 10-K is not required to be filed
pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer shall deliver to the Trustee and the Depositor, an
Officer's Certificate in the form attached hereto as Exhibit U stating, as to
each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of the performance of the Servicer under
this Agreement has been made under such officer's supervision, and (ii) to the
best of such officer's knowledge, based on such review, such Servicer has
fulfilled all its obligations under this 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. With respect to
any Subservicer that meets the criteria of Item 1108(a)(2)(i) through (iii) of
Regulation AB, the Servicer shall deliver, on behalf of that Subservicer, the
Officer's Certificate set forth in this Section 3.17 as and when required with
respect to such Subservicer.
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements
(a) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), the Servicer, at its own expense, shall deliver to the
Trustee and the Depositor an officer's assessment of its compliance with the
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 be substantially in the form
of Exhibit R hereto.
(b) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall cause a nationally or
regionally recognized firm of independent registered public accountants (who may
also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to be provided to the Trustee and the
Depositor that attests to and reports on the Assessment of Compliance provided
by such Servicer pursuant to Section 3.18(a) (the
-101-
"Accountant's Attestation"). 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.
(c) The Servicer shall deliver on behalf of any Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the Servicer and the Trustee in writing that such compliance statement
is not required by Regulation AB) not later than March 12 of each calendar year
(other than the calendar year during which the Closing Date occurs) with respect
to any calendar year during which the Issuing Entity's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, to the Trustee and the Depositor an
Assessment of Compliance, which assessment shall be substantially in the form of
Exhibit R hereto. The Servicer shall deliver on behalf of any Subservicer (other
than the calendar year during which the Closing Date occurs) with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day) to the Trustee and the Depositor an Assessment of Compliance, which
assessment shall be substantially in the form of Exhibit R hereto.
(d) Not later than March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the Servicer shall cause each Subservicer and each Subcontractor
(unless, in the case of any Subcontractor, the Depositor has notified the
Trustee and Servicer in writing that such compliance statement is not required
by Regulation AB) to provide for delivery to the Trustee and the Depositor an
Accountant's Attestation by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance pursuant to Section 3.18(c) above.
Other than the calendar year during which the Closing Date occurs, with respect
to any calendar year during which the Issuing Entity's annual report on Form
10-K is not required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, not later than April 15 of each
calendar year (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day), the Servicer shall cause each Subservicer
to provide for delivery to the Trustee and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section 3.18(c) above.
(e) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, fifteen
(15) calendar days before the date on which the Issuing Entity's annual report
on Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Trustee shall deliver to the
Depositor and the Servicer an Assessment of Compliance with regard to the
Servicing Criteria applicable to the Trustee during the preceding calendar year.
(f) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, fifteen
(15) calendar days before the date on which the Issuing Entity's annual report
on Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Trustee
-102-
shall deliver to the Depositor and the Servicer an Accountant's Attestation by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(e) above.
(g) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, fifteen (15) calendar days before the date on which the Issuing
Entity's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Depositor shall cause each custodian, if any, to deliver to the
Depositor, the Servicer and the Trustee an Assessment of Compliance with regard
to the Servicing Criteria applicable to such custodian during the preceding
calendar year.
(h) Not later than March 12, (or, in each case, if such day is not a
Business Day, the immediately succeeding Business Day), of any calendar year
(other than the calendar year during which the Closing Date occurs) during which
the Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, the Depositor shall cause each custodian, if any, to deliver to the
Depositor, the Servicer and the Trustee an Accountant's Attestation by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(g) above.
(i) [Reserved].
(j) [Reserved].
(k) The Trustee agrees to require any custodian appointed by it to
indemnify and hold harmless the Trustee, the Depositor and the Servicer and each
Person, if any, who "controls" the Trustee, the Depositor or the Servicer within
the meaning of the Securities Act 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 that such Person may sustain arising out of third party claims based on
(i) the failure of the custodian, if any, to deliver when required any
information required of it pursuant to Sections 3.18 or 3.20 or (ii) any
material misstatement or omission contained in any information provided on its
behalf pursuant to Sections 3.18 or 3.20.
(l) Any statement, report and information, including the Assessments
of Compliance and Accountant's Attestations, delivered to the Trustee pursuant
to Sections 3.17 and 3.18 shall be delivered in a Microsoft Word format (or
other word processing format that is acceptable to the Trustee) or in such other
form as agreed upon by the Trustee and the party delivering such statement,
report or other information. 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 12,
2008.
(m) Each of the parties hereto acknowledges and agrees that the
purpose of this Section 3.18 is to facilitate compliance by the Sponsor and 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 the
parties' obligations hereunder will be supplemented and modified as necessary to
be
-103-
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation AB
and the parties shall comply with requests made by the Sponsor or the Depositor
for delivery of additional or different information as the Sponsor or the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB, provided that such information is available to such party
without unreasonable effort or expense and within such timeframe as may be
reasonably requested. Any such supplementation or modification shall be made in
accordance with Section 10.01 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Trustee on behalf of the
Issuing Entity under the Exchange Act.
SECTION 3.19. Subordination of Liens
In connection with any governmental program under which a Mortgagor may
obtain a benefit in the event the related Mortgaged Property is subject to a
disaster provided that the Mortgagor files a covenant or other lien against the
Mortgaged Property and is required to obtain the subordination thereto of the
Mortgage, the Servicer may cause such subordination to be executed and filed
provided that either (i) the related Mortgage Loan is in default or, in the
Servicer's best judgment, default with respect to such Mortgage Loan is
reasonably foreseeable or (ii) such subordination and participation in such
governmental program will not result in a change in payment expectations with
respect to such Mortgage Loan. For purposes of the preceding sentence, a change
in payment expectations occurs if, as a result of such subordination and
participation in such governmental program, (1) there is a substantial
enhancement of the Mortgagor's capacity to meet the payment obligations under
the Mortgage Loan and that capacity was primarily speculative prior to such
subordination and participation in such governmental program and is adequate
after such subordination and participation in such governmental program or (2)
there is a substantial impairment of the Mortgagor's capacity to meet the
payment obligations under the Mortgage Loan and that capacity was adequate prior
to such subordination and participation in such governmental program and is
primarily speculative after such subordination and participation in such
governmental program. The preceding sentence and clause (ii) of the second
preceding sentence are intended to comply with Treasury Regulations Section
1.1001-3(e)(4) and shall be interpreted in accordance therewith.
SECTION 3.20. Periodic Filings
As set forth on Schedule X hereto, for so long as the Issuing Entity is
subject to the Exchange Act reporting requirements, no later than the end of
business on the 2nd Business Day after the occurrence of an event requiring
disclosure on Form 8-K (a "reportable event"), the Depositor, the Sponsor or the
Servicer (i) shall have timely notified the Trustee of an item reportable on a
Form 8-K (unless such item is specific to the Trustee, in which case the Trustee
will be deemed to have notice) and (ii) shall have delivered to the Trustee, all
information, data, and exhibits required to be provided or filed with such Form
8-K in a word format (or other word processing format that is acceptable to the
Trustee) agreed upon by the Trustee and Depositor, Sponsor or Servicer. The
Depositor or the Trustee, to the extent the reportable item pertains to such
party, shall notify the Servicer thereof by telephone. The Trustee shall not be
responsible for determining what information is required to be filed on a Form
8-K in connection with the transactions contemplated by this Agreement (unless
such information is specific to the Trustee, in which case the Trustee will be
responsible for consulting with the Depositor or Servicer in making such a
determination) or what events shall cause a Form 8-K to be required to be filed
(unless such event is specific to the Trustee, in which case the Trustee will be
responsible for consulting with the Depositor or Servicer before causing such
Form 8-K to be filed) and shall not be liable for any late filing of a Form 8-K
-104-
in the event that it does not receive all information, data and exhibits
required to be provided or filed on or prior to the second Business Day prior to
the applicable filing deadline and with respect to signatures, by noon, New York
City time, on the fourth Business Day after the reportable event. After
preparing the Form 8-K on behalf of the Depositor, the Trustee shall, if
required, forward electronically a draft copy of the Form 8-K to the Depositor
and the Servicer for review. No later than one and one-half Business Days after
receiving a final copy of the Form 8-K from the Trustee, unless the Servicer has
received from the Depositor a notice to the contrary, a duly authorized
representative 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 and the Trustee shall file such Form
8-K; provided that the Depositor has notified the Trustee that it approves of
the form and substance of such Form 8-K. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Trustee will follow
the procedures set forth in this Agreement. After filing with the Commission,
the Trustee will, pursuant to this Agreement, make available on its internet
website a final executed copy of each Form 8-K. The Trustee will have no
obligation to prepare, execute or file such Form 8-K or any liability with
respect to any failure to properly prepare, execute or file such Form 8-K
resulting from the Trustee's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 8-K
within the time frames required by this paragraph, not resulting from its own
negligence, bad faith or willful misconduct.
Within fifteen (15) days after each Distribution Date, the Trustee shall,
on behalf of the Issuing Entity and in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
(XXXXX), a Form 10-D with a copy of the report to the Certificateholders for
such Distribution Date as an exhibit thereto. Any other information provided to
the Trustee by the Servicer or Depositor to be included in Form 10-D shall be
determined and prepared by and at the direction of 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 information on Form
10-D ("Additional Form 10-D Disclosure") as set forth in the next paragraph.
As set forth in Schedule Y hereto, within five (5) calendar days after the
related Distribution Date (i) the parties hereto, as applicable, will be
required to provide to the Depositor and the Servicer, to the extent known to
such party, any Additional Form 10-D Disclosure (including any breaches of pool
asset representations and warranties or transaction covenants of which the party
has written notice and which has not been included on the monthly distribution
report for the period), if applicable, and (ii) the Depositor, to the extent it
deems necessary, forward to the Trustee in a Microsoft Word format (or other
word processing format that is acceptable to the Trustee) (with a copy to the
Servicer), or in such other form as otherwise agreed upon by the Trustee and the
Depositor, the form and substance of the Additional Form 10-D Disclosure by the
eighth (8th) calendar day after the related Distribution Date. The Depositor
will be responsible for 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.
After preparing the Form 10-D at the direction of the Depositor, the
Trustee will forward electronically a draft copy of the Form 10-D to the
Depositor and the Servicer for review by the 9th calendar day after the
Distribution Date. No later than two (2) Business Days after receipt of a final
copy after the related Distribution Date, unless the Servicer receives a notice
from the Trustee as described below or a notice from the Depositor that it has
discovered a material deficiency or irregularity with respect to such Form 10-D,
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 within two (2) Business Days.
-105-
Unless the Servicer shall have received notice from the Trustee to the contrary,
the Trustee will be deemed to have represented to the Servicer that the monthly
statement has been properly prepared by the Trustee and the Servicer may rely
upon the accuracy thereof in it execution of the Form 10-D. If a Form 10-D
cannot be filed on time (because of notice from the Trustee per the previous
sentence or otherwise) or if a previously filed Form 10-D needs to be amended,
the Trustee will follow the procedures set forth in this Agreement. After filing
with the Commission, the Trustee will make available on its internet website a
final executed copy of each Form 10-D. The Trustee will have no liability with
respect to any failure to properly prepare, execute or file such Form 10-D
resulting from the Trustee's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 10-D on a
timely basis.
Prior to Xxxxx 00, 0000 (xxx, if applicable, prior to the ninetieth (90th)
calendar day after the end of the fiscal year for the Issuing Entity), the
Trustee shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the 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 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 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 each Servicer, 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
Reporting Servicer'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
Servicer and each Subservicer, as described in Section 3.18 of the Agreement,
and (B) if any registered public accounting firm attestation report described in
the Section 3.18 of the 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, 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 ("Additional Form 10-K Disclosure") shall be determined
and prepared by and at the direction of the Depositor pursuant to the following
paragraph and the Trustee will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next paragraph.
As set forth in Schedule Z hereto, no later than March 12 of each year that
the Issuing Entity is subject to the Exchange Act reporting requirements,
commencing in 2008, (i) certain parties to the transaction shall be required to
provide to the Depositor and the Servicer, to the extent known, any Additional
Form 10-K Disclosure, if applicable, and (ii) the Depositor shall, to the extent
it deems necessary, forward to the Trustee in a Microsoft Word format (or other
word processing format that is acceptable to the Trustee), or in such other form
as otherwise agreed upon by the Trustee and the Depositor, the form and
substance of the Additional Form 10-K Disclosure by March 15. 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.
-106-
After preparing the Form 10-K, the Trustee shall forward electronically a
draft copy of the Form 10-K to the Depositor and the Servicer for review. Upon
the request of the Servicer, the Depositor shall confirm that it has reviewed
the Form 10-K, that it has been properly prepared and that the Servicer may rely
on the accuracy thereof (other than with respect to any portion of the Form 10-K
or any exhibit thereto provided by the Servicer (other than any portion thereof
with respect to which the Servicer has relied on the Trustee)). No later than
5:00 p.m. EST on the 3rd Business Day following receipt of a final copy of the
Form 10-K and if requested, the above-described confirmation from the Depositor,
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 by March 30th. 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 the Agreement. After filing with the Commission, the
Trustee will, pursuant to the Agreement, make available on its internet website
a final executed copy of each Form 10-K. The Trustee shall have no liability
with respect to any failure to properly prepare, execute or file such Form 10-K
resulting from the Trustee's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 10-K on a
timely basis.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") which shall be in the form attached hereto as Exhibit T. The
Servicer will cause its senior officer in charge of securitization to execute
the Xxxxxxxx-Xxxxx Certification required pursuant to Rule 13a -14 under the
Securities Exchange Act of 1934, as amended, and to deliver the original
executed Xxxxxxxx-Xxxxx Certification to the Trustee by March 12 of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act. In connection therewith, each of the Trustee and the Servicer
shall sign a certification (in the form attached hereto as Exhibit K and Exhibit
L, respectively) for the benefit of the Servicer and its officers, directors and
Affiliates regarding certain aspects of the Xxxxxxxx-Xxxxx Certification. To the
extent any information or exhibits required to be included in the Form 10 -K are
not timely received by the Trustee prior to March 30, the Trustee shall, on
behalf of the Trust, file a Form 12B25 and one or more amended Form 10-Ks, to
the extent such amendments are accepted pursuant to the Exchange Act, to include
such missing information or exhibits promptly after receipt thereof by the
Trustee.
On or before January 30, 2008, the Trustee shall, if legally permissible
under applicable regulations and interpretations of the Commission, on behalf of
the Issuing Entity and in accordance with industry standards, file with the
Commission via XXXXX a Form 15 Suspension Notification with respect to the
Issuing Entity, if applicable.
The Servicer agrees to furnish to the Trustee promptly, from time to time
upon request, such further information, reports, and financial statements in a
Microsoft Word format (or other word processing format that is acceptable to the
Trustee) within its control related to this Agreement and the Mortgage Loans as
is reasonably necessary to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items with the
Commission other than those specified in this section and the Servicer shall
execute any and all Form 8-Ks, Form 10-Ds and Form 10-Ks required hereunder.
The Trustee shall not have any responsibility to file any items (other than
those generated by it) that have not been received in a format suitable (or
readily convertible into a format suitable) for electronic filing via the XXXXX
system and shall not have any responsibility to convert any such items to such
format (other than those items generated by it or that are readily convertible
to such format).
-107-
If the 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 3.20, to be conducted differently than as described,
the Depositor, the Servicer, and the Trustee will reasonably cooperate to amend
the provisions of this Section 3.20 in order to comply with such amended
reporting requirements and such amendment of this Section 3.20. Any such
amendment shall be made in accordance with Section 10.01 without the consent of
the Certificateholders, and may result in a change in the reports filed by the
Trustee on behalf of the Issuing Entity under the Exchange Act. Notwithstanding
the foregoing, the Depositor, the Servicer, and the Trustee shall not be
obligated to enter into any amendment pursuant to this Section 3.20 that
adversely affects its obligations and immunities under this Agreement.
The Depositor, the Servicer and the Trustee agree to use their good faith
efforts to cooperate in complying with the requirements of this Section 3.20.
SECTION 3.21. Indemnification by Trustee
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 3.20, 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.
SECTION 3.22. Indemnification by Servicer
The Servicer shall indemnify and hold harmless the Trustee and the
Depositor 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 Servicer or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.17, 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Servicer is responsible for providing information or calculating amounts
included in such information), the failure of such 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 Section 3.18 or Annual Statement of Compliance required pursuant to Section
3.17, as applicable, or any material misstatement or omission contained in any
Assessment of Compliance, Accountant's Attestation or Annual Statement as to
Compliance provided on its behalf pursuant to Section 3.18 or 3.17, as
applicable, or the negligence, bad faith or willful misconduct of the Servicer
in connection therewith. If the indemnification provided for herein is
-108-
unavailable or insufficient to hold harmless the indemnified parties, then the
Servicer 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 Servicer on the one hand and the indemnified parties on
the other.
Notwithstanding the foregoing, the Servicer shall be entitled to rely
conclusively on the accuracy of the information or data provided to the Servicer
in the respective Assessment of Compliance regarding the Servicing Criteria
applicable to the Trustee under Sections 3.18(e) and 3.18(f) or the Depositor
under Sections 3.18(g) and 3.18(h) in connection with the Servicer's document
preparation under Sections 3.17, 3.18 and 3.20, and the Servicer shall be
entitled to rely conclusively upon and shall have no liability for any errors in
such information.
SECTION 3.23. Prepayment Charge Reporting Requirements
Promptly before or after each Distribution Date, the Servicer shall provide
to 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) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
SECTION 3.24. Information to the Trustee and Rating Agencies
(a) Two (2) Business Days after the 15th day of each month, but not later
than the 18th day of each month, the Servicer shall furnish to the Trustee in
electronic format (1) the Remittance Report pursuant to Section 4.04(j) and (ii)
a delinquency report in the form attached hereto as Exhibit V for the period
ending on the last Business Day of the preceding month (and with respect to
prepayments in full, for the period ending on the 14th day of the month in which
such report is to be furnished); provided, however, that in the event the 18th
day is not a Business Day, the aforementioned reports shall be furnished by the
Servicer to the Trustee on the next Business Day; and provided, further, that in
the event there are three (3) non-Business Days preceding the 18th day, the
Servicer will (a) furnish to the Trustee, on or before the 18th day of the
month, the aforementioned reports, which will not include information arising
from the related Prepayment Period, and (b) furnish to the Trustee, by 3:00
P.M., EST on the next succeeding Business Day after the 18th day, a cumulative
version of the aforementioned reports which includes such information arising
from the related Prepayment Period.
(b) Within three (3) Business Days after the Servicer Remittance Date, the
Servicer shall provide a monthly loan level data file to Xxxxx'x containing the
information for each Mortgage Loan as listed in
-109-
Exhibit W, as well as such additional mortgage loan data elements that Xxxxx'x
may reasonably request. The data shall be provided in a format as may be
reasonably requested by Xxxxx'x.
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 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 by reason of negligence,
willful misfeasance or bad faith in the performance of its duties or by reason
of reckless disregard of obligations and duties hereunder. The Servicer
immediately shall notify the Sponsor, the Trustee and the Depositor or any other
relevant party if a claim is made by a third party with respect to such party
and this Agreement or the Mortgage Loans and, if subject to this indemnification
obligation, assume (with the prior written consent of the indemnified party,
which consent shall 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 follow any reasonable written instructions received from the Trustee in
connection with such claim, it being understood that the Trustee shall have no
duty to monitor or give instructions with respect to such claims, and the
Servicer will not have any liability for following such instructions. The
Servicer shall provide the Depositor and the Trustee with a written report of
all expenses and advances incurred by the Servicer pursuant to this Section
3.25(a), 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 the claim in any way relates to 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. Solicitation
The Servicer may solicit or refer to a mortgage originator, who may or may
not be an affiliate of the Depositor or the Servicer, any Mortgagor for
refinancing or otherwise take action to encourage refinancing.
SECTION 3.27. High Cost Mortgage Loans
In the event that the Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan", "high cost home", "covered", "high cost",
"high risk home", "predatory" or similarly classified loan under any applicable
state, federal or local law, the Servicer may notify the Depositor, the Sponsor
and the Trustee thereof; the Servicer may terminate its servicing thereof; and
such determination shall be deemed to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan and the Sponsor will
repurchase the Mortgage Loan within a 30 day period from the date of the notice
in the manner described in Section 2.05.
-110-
SECTION 3.28. Rights of the NIMs Insurer
Each of the rights of the NIMs Insurer set forth in this agreement shall
exist so long as NIM Notes have been issued pursuant to the Indenture remain
outstanding that are insured by a NIMs Insurer or the NIMs Insurer is owed
amounts in respect of its guarantee of payment on such NIM notes.
SECTION 3.29. Additional Rights of the Class C Certificateholder
The Class C Certificateholder (or, if applicable, the Holders of a majority
of aggregate principal balance of the NIM Notes) will have the right (but not
the obligation) to terminate the Servicer and transfer servicing to any entity
that meets the servicer eligibility criteria specified in Section 7.02 upon the
occurrence of (x) a change in ownership and control of the Servicer as provided
in Section 6.02 or (y) a two-rating downgrade of the primary servicer (subprime)
rating of the Servicer by either of the Rating Agencies that is not cured within
sixty (60) days. No such termination shall be effective until the Class C
Certificateholder designates a successor servicer and such successor servicer
has executed and delivered to the Depositor and the Trustee an agreement
accepting such delegation and assignment that contains an acknowledgment by such
person that it is assuming the rights, powers, duties, responsibilities,
obligations and liabilities of a servicer hereunder with like effect as if
originally named a party to this Agreement. For avoidance of doubt, any removal
and replacement of the Servicer hereunder shall not be an event of default. The
Trustee shall have no obligation to monitor the changes to the Servicer's
eligibility criteria described herein or to enforce the rights of the Class C
Certificateholder herein.
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. The Servicer shall use commercially reasonable efforts to remit each
such Advance no later than 2:30 p.m. Eastern time, but in any case no later than
4:00 p.m. Eastern time, on the Servicer Remittance 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 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.
-111-
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 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 Remittance 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) such Mortgage Loan is paid in full, (ii) the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Issuing Entity pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, (iii) the Servicer determines in its good faith judgment that such
amounts would constitute a Non-Recoverable Advance as provided in the preceding
paragraph or (iv) 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
(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 Trustee. In addition, the Servicer shall not be
required to advance any Relief Act Shortfalls, shortfalls due to bankruptcy
proceedings and shortfalls due to modifications as provided in Section 3.05.
(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 Servicer Statement referenced in Section 3.24. In addition, the Servicer
shall provide the Trustee with an Officer's Certificate listing such delinquent
Mortgage Loans and certifying that such loans are 150 days or more delinquent.
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, 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
Remittance Date immediately preceding such Distribution Date, an amount up to
the Prepayment Interest Shortfall; provided that the amount so deposited shall
not exceed the Compensating Interest for such Distribution Date. 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
-112-
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 related to
the Relief Act or bankruptcy proceedings and the Servicer shall not be obligated
to pay Compensating Interest with respect to Prepayment Interest Shortfalls
related to the Relief Act or bankruptcy proceedings.
SECTION 4.03. Distributions on the REMIC Interests
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 (or on the related Swap Payment Date,
with respect to payments to the Supplemental Interest Trust), 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 or the Sponsor in respect of Prepayment Charges pursuant to this
Agreement, 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 FFFC Purchase 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 Supplemental Interest Trust 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 1-A, Class 2-A 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;
-113-
(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;
(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;
(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 1-A and Class R Certificates and Interest Funds received on the
Group Two Mortgage Loans will be deemed to be distributed to the Class 2-A
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 (or on the related Swap Payment Date,
with respect to payments to the Supplemental Interest Trust), 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, to the extent not paid pursuant to Section 4.04(b)(ii);
(ii) to the Supplemental Interest Trust, any Swap Termination Payment
owed by the Supplemental Interest Trust to the Swap Counterparty (other than any
Defaulted Swap Termination Payment), to the extent not paid pursuant to Section
4.04(b)(iii);
-114-
(iii) to the Class A Certificates, the Class A Principal Distribution
Amount shall be distributed as follows:
(A) the Class 1-A Principal Distribution Amount will be
distributed sequentially to the Class R Certificates until the
Certificate Principal Balance of such class has been reduced to zero
and then to the Class 1-A Certificates until the Certificate Principal
Balance of such class has been reduced to zero;
(B) the Class 2-A Principal Distribution Amount will be
distributed as follows: sequentially, to the Class 2-A1 Certificates
until the Certificate Principal Balance of such class has been reduced
to zero, then to the Class 2-A2 Certificates until the Certificate
Principal Balance of such class has been reduced to zero, and then to
the Class 2-A3 Certificates until the Certificate Principal Balance of
such class has been reduced to zero; provided, however, that on and
after the Distribution Date on which the aggregate Certificate
Principal Balance of the Class M, Class B and Class C Certificates has
been reduced to zero, any principal distributions allocated to the
Class 2-A1, Class 2-A2 and Class 2-A3 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:
-115-
(i) to the Class A Certificates, any funds owed, in the same manner
and in the same order of priority, as set forth in accordance with Section
4.04(b)(iv), to the extent not paid pursuant to Section 4.04(b)(iv);
(ii) to the Class M-1 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(v), to the extent not paid pursuant to Section
4.04(b)(v);
(iii) to the Class M-2 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(vi), to the extent not paid pursuant to Section
4.04(b)(vi);
(iv) to the Class M-3 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(vii), to the extent not paid pursuant to Section
4.04(b)(vii);
(v) to the Class M-4 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(viii), to the extent not paid pursuant to
Section 4.04(b)(viii);
(vi) to the Class M-5 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(ix), to the extent not paid pursuant to Section
4.04(b)(ix);
(vii) to the Class M-6 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(x), to the extent not paid pursuant to Section
4.04(b)(x);
(viii) to the Class B-1 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(xi), to the extent not paid pursuant to Section
4.04(b)(xi);
(ix) to the Class B-2 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(xii), to the extent not paid pursuant to Section
4.04(b)(xii);
(x) to the Class B-3 Certificates, any funds owed as set forth in
accordance with Section 4.04(b)(xiii), to the extent not paid pursuant to
Section 4.04(b)(xiii);
(xi) for distribution as part of the Principal Distribution Amount,
the Extra Principal Distribution Amount;
(xii) to the Class M-1 Certificates, any Unpaid Realized Loss Amount
for such class;
(xiii) to the Class M-2 Certificates, any Unpaid Realized Loss Amount
for such class;
(xiv) to the Class M-3 Certificates, any Unpaid Realized Loss Amount
for such class;
(xv) to the Class M-4 Certificates, any Unpaid Realized Loss Amount
for such class;
(xvi) to the Class M-5 Certificates, any Unpaid Realized Loss Amount
for such class;
(xvii) to the Class M-6 Certificates, any Unpaid Realized Loss Amount
for such class;
(xviii) to the Class B-1 Certificates, any Unpaid Realized Loss Amount
for such class;
(xix) to the Class B-2 Certificates, any Unpaid Realized Loss Amount
for such class;
-116-
(xx) to the Class B-3 Certificates, any Unpaid Realized Loss Amount
for such class;
(xxi) 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
(xxii) 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)(xxii) 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 8.06 and (ii) 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;
-117-
(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
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.
(k) The Trustee is hereby directed by the Depositor to execute the
Corridor 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
Corridor Contracts, including, without limitation, the representations and
warranties contained therein. Any funds payable by the Issuing Entity under the
Corridor Contracts at closing shall be paid by the Depositor. Any payments
received under the terms of the related Corridor Contract will be available to
pay the holders of the related Class 1-A and Class R Certificates, Class 2-A
Certificates, or the 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 Corridor 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 Corridor Contract shall be paid to the
related classes of Class 1-A and Class R Certificates, Class 2-A Certificates,
and Subordinate Certificates, pro rata based upon such Floating Rate Certificate
Carryovers for each such class of Class 1-A and Class R Certificates, Class 2-A
Certificates, and Subordinate Certificates. Amounts received on the Class 1-A
Corridor Contract will only be available to make payments on the Class 1-A and
Class R Certificates, amounts received on the Class 2-A Corridor Contract will
only be available to make payments on the Class 2-A Certificates, amounts
received on the Subordinate Certificate Corridor Contract will only be available
to make payments on the Subordinate Certificates.
-118-
(i) The Trustee shall establish and maintain, for the benefit of the
Issuing Entity and the Certificateholders, the Corridor Contract Account. On or
prior to the related Corridor Contract Termination Date, amounts, if any,
received by the Trustee for the benefit of the Issuing Entity in respect of the
related Corridor Contract shall be deposited by the Trustee into the Corridor
Contract Account and will be used to pay Floating Rate Certificate Carryovers on
the related Class 1-A and Class R Certificates, Class 2-A 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
Corridor Contract Termination Date, the amount, if any, payable by the Cap
Contract Counterparty under the related Corridor 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 Corridor 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 Corridor Contract, (ii) an amount equal to the lesser of
(x) the related Corridor 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 Corridor 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(b) hereof.
(ii) Amounts on deposit in the Corridor Contract Account will remain
uninvested pending distribution to Certificateholders.
(iii) Each Corridor Contract is scheduled to remain in effect until
the related Corridor 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 (3) Local Business Days, as defined in the
related Corridor Contract, after notice of such failure is received by the Cap
Contract Counterparty) to make a payment due under the related Corridor
Contract, the failure by the Cap Contract Counterparty (after a cure period of
twenty (20) days after notice of such failure is received) to perform any other
agreement made by it under the related Corridor Contract, the termination of the
Trust Fund and the related Corridor Contract becoming illegal or subject to
certain kinds of taxation.
(iv) On the Closing Date, the Cap Contract Counterparty and the
Trustee (which is hereby authorized and directed to enter into such credit
support annex) will enter into a credit support annex in relation to the
Corridor Contracts, which annex is intended to protect the Issuing Entity from
certain ratings downgrades that might hinder the ability of the Cap Contract
Counterparty to continue its obligations under the Corridor Contracts.
Pursuant to and in accordance with the terms and provisions of the Corridor
Contracts, the Cap Contract Counterparty may be required to post additional
collateral in connection with its obligations under the Corridor Contracts. In
connection with the foregoing, the Trustee shall establish a Corridor Posted
Collateral Account on the Closing Date.
To the extent that the Cap Contract Counterparty remits any Posted
Collateral to the Trustee under the Corridor Contracts, the Trustee shall, upon
receipt of the Posted Collateral, deposit the Posted Collateral into the
Corridor Posted Collateral Account and shall hold, release and disburse such
collateral in accordance with the terms and provisions of the Corridor
Contracts. Where a termination event occurs
-119-
with respect to the Cap Contract Counterparty under the Corridor Contracts, or
where the Cap Contract Counterparty fulfills certain obligations to the Issuing
Entity such as finding a replacement cap contract counterparty or a guarantor
that meets the criteria described in the Corridor Contracts, the Trustee shall
make payments from the Corridor Posted Collateral Account in accordance with the
provisions of the Corridor Contract. Amounts held in the Corridor Posted
Collateral Account will not be part of the Trust Fund and will not be available
for distribution to any Certificateholders, except to the extent distributed to
the Corridor Contract Account pursuant to the Corridor Contracts. Any funds held
in the Corridor Posted Collateral Account shall be invested by the Trustee in
Eligible Investments in accordance with the instructions of the Cap Contract
Counterparty. Any earnings shall be remitted to the Cap Contract Counterparty in
accordance with the Corridor Contracts. The Trustee shall not be responsible for
any losses. Absent receipt by the Trustee of written instructions from the Cap
Contract Counterparty, such funds shall remain uninvested.
(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 Supplemental Interest Trust Trustee for the
benefit of the holders of the Certificates as a segregated subtrust of the Trust
Fund. The Supplemental Interest Trust 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 or the Supplemental Interest Trust Trustee held pursuant to this
Agreement. In no event shall any funds deposited in the Supplemental Interest
Trust 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 Supplemental Interest Trust Trustee is hereby directed by the Depositor
to execute the Swap Agreement on behalf of the Supplemental Interest Trust in
the forms presented to it by the Depositor and shall have no responsibility for
the contents of such Swap Agreement, including, without limitation, the
representations and warranties contained therein. The Supplemental Interest
Trust Trustee shall have all of the rights and protections of the Trustee
hereunder. The Depositor is hereby directed to make, or cause to be made, the
"additional payment" (as described in the Swap Agreement) on behalf of the
Supplemental Interest Trust.
The Supplemental Interest Trust 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
September 2012, the Supplemental Interest Trust Trustee shall, based on the
Significance Estimate (which shall be provided to the Trustee by the Depositor
within five (5) Business Days prior to the Distribution Date), calculate the
Significance Percentage of each of the Swap Agreement. If on any such
Distribution Date, the Significance Percentage is equal to or greater than 9%,
the Supplemental Interest Trust Trustee shall promptly notify the Depositor and
the Depositor, on behalf of the Supplemental Interest Trust 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 September 2012,
the Significance Percentage is equal to or greater than 10%, the Supplemental
Interest Trust Trustee shall promptly notify the Depositor and the Depositor
shall, within
-120-
five (5) Business Days of such Distribution Date, deliver to the Supplemental
Interest Trust Trustee the financial information provided to it by the Swap
Counterparty in a Microsoft Word format (or other word processing format that is
acceptable to the Supplemental Interest Trust Trustee) for inclusion in the Form
10-D relating to such Distribution Date.
Any Swap Termination Payment received by the Supplemental Interest Trust
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 thirty (30) days after receipt by the
Supplemental Interest Trust Trustee of the Swap Termination Payment paid by the
terminated Swap Counterparty, the Supplemental Interest Trust Trustee shall
deposit such Swap Termination Payment into a separate, segregated non-interest
bearing subtrust established by the Supplemental Interest Trust Trustee and the
Supplemental Interest Trust 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) September 25, 2012.
On any Distribution Date (or in the case of any Net Swap Payments, on the
related Swap Payment Date), any Swap Termination Payments or Net Swap Payments
owed to the Swap Counterparty will be paid out of and any Net Swap Payments or
Swap Termination Payments received from the Swap Counterparty will be deposited
into the Swap Account (an account within the Supplemental Interest Trust). 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, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates, the Class M-6 Certificates, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates, in that order, any
Current Interest for such class to the extent unpaid;
(v) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates, the Class M-6 Certificates, the
-121-
Class B-1 Certificates, the Class B-2 Certificates and the Class B-3
Certificates, in that order, any Interest Carry Forward with respect to such
class to the extent unpaid;
(vi) to the Class A, Class R, 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;
(vii) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates, the Class M-6 Certificates, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates, in that order, any Unpaid
Realized Loss Amount for such class to the extent unpaid;
(viii) to the Class A, Class R, 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 (vi) 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 Supplemental Interest Trust Trustee
shall send any notices and make any demands required hereunder (to the extent
that a Responsible Officer of the Trustee has actual knowledge or written notice
of any such failure, breach or termination).
On the Closing Date, the Swap Counterparty and the Supplemental Interest
Trust Trustee (which is hereby authorized and directed to enter into such credit
support annex) will enter into a credit support annex in relation to the Swap
Agreement, which annex is intended to protect the Supplemental Interest Trust
from certain ratings downgrades that might hinder the ability of the Swap
Counterparty to continue its obligations under the Swap Agreement.
Pursuant to and in accordance with the terms and provisions of the Swap
Agreement, the Swap Counterparty may be required to post additional collateral
in connection with its obligations under the Swap Agreement. In connection with
the foregoing, on the Closing Date, the Supplemental Interest Trust Trustee
shall establish and maintain a Swap Posted Collateral Account.
-122-
To the extent that the Swap Counterparty remits any Posted Collateral to
the Supplemental Interest Trust Trustee under the Swap Agreement, the
Supplemental Interest Trust Trustee shall, upon receipt of the Posted
Collateral, deposit the Posted Collateral into the Swap Posted Collateral
Account and shall hold, release and disburse such collateral in accordance with
the terms and provisions of the Swap Agreement. Where a termination event occurs
with respect to the Swap Counterparty under the Swap Agreement, or where the
Swap Counterparty fulfills certain obligations to the Supplemental Interest
Trust such as finding a replacement swap counterparty or a guarantor that meets
established criteria of the Rating Agencies, the Supplemental Interest Trust
Trustee shall make payments from the Swap Posted Collateral Account in
accordance with the provisions of the Swap Agreement. Amounts held in the Swap
Posted Collateral Account will not be part of the Trust Fund and will not be
available for distribution to any Certificateholders, except to the extent
distributed to the Swap Account pursuant to the Swap Agreement. Any funds held
in the Swap Posted Collateral Account shall be invested by the Trustee in
Eligible Investments in accordance with the instructions of the Swap
Counterparty. Any earnings shall be remitted to the Swap Counterparty in
accordance with the Swap Agreement. The Trustee shall not be responsible for any
losses. Absent receipt by the Trustee of written instructions from the Swap
Counterparty, such funds shall remain uninvested.
SECTION 4.05. Monthly Statements to Certificateholders
(a) Not later than each Distribution Date, 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 Issuing Entity, the Servicer, the Trustee, the
Rating Agencies, the Depositor, the Cap Contract Counterparty and the Swap
Counterparty a statement setting forth for the Certificates the following
information; provided, however, that with respect to any calendar year during
which an annual report on Form 10-K is not required to be filed with the
Commission on behalf of the Issuing Entity, the information set forth in Items
(xxiv) through (xxxii) below are not required to be included in such statement
during any calendar year:
(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;
(iii) any Interest Carry Forward Amount for each Class of the Class A,
Class M and Class B Certificates;
(iv) the Class 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;
(v) the Pool Stated Principal Balance for such Distribution Date;
(vi) the amount of the Servicing Fee paid to or retained by the
Servicer and any amounts constituting reimbursement or indemnification of the
Servicer or Trustee;
-123-
(vii) the Pass-Through Rate for each Class of Certificates for such
Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date or reimbursed during the period;
(ix) 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;
(x) 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;
(xi) 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, (3) 91 or 120 days, (4) 121 to 150 days, (5) 151 to 180 days and
(6) 181 or more days, and (B) in foreclosure and Delinquent (1) 31 to 60 days,
(2) 61 to 90 days, (3) 91 or 120 days, (4) 121 to 150 days, (5) 151 to 180 days
and (6) 181 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 in
accordance with the OTS methodology for reporting delinquencies;
(xii) 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, in the aggregate and with
respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(xiii) 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;
(xiv) the aggregate Stated Principal Balance of all loans that became
Liquidated Loans as of such Distribution Date calculated as of the preceding
Distribution Date, in the aggregate and with respect to the Group One Mortgage
Loans and Group Two Mortgage Loans;
(xv) whether a Stepdown Trigger Event has occurred and is in effect;
(xvi) 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;
(xvii) the number and Stated Principal Balance (as of the preceding
Distribution Date) of any Mortgage Loans which were purchased or repurchased
during the preceding Prepayment Period and since the Cut-off Date;
(xviii) the number of Mortgage Loans prepaid in full 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
-124-
for all such Mortgage Loans since the Cut-off Date, and for partial Principal
Prepayments, the amount received during the preceding calendar month;
(xix) the amount and purpose of any withdrawal from the Collection
Account pursuant to Section 3.08(a)(viii);
(xx) 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";
(xxi) as of each Distribution Date, the amount, if any, to be
deposited in the Issuing Entity pursuant to the related Corridor Contract as
described in Section 4.04(k) and the amount thereof to be paid to the Class 1-A
Certificates, the Class 2-A Certificates, the Subordinate Certificates and the
Class C Certificates described in Section 4.04(k) hereof;
(xxii) as of each Distribution Date, the amount, if any, to be
deposited in 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;
(xxiii) 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;
(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 Relief Act; 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;
(xxv) with respect to each Class of Certificates, the amount of any
Non-Supported Interest Shortfalls on such Distribution Date;
(xxvi) the number and amount of pool assets at the beginning and
ending of each period, and updated pool composition information;
(xxvii) any material changes to methodology regarding calculations of
delinquencies and charge-offs;
(xxviii) information on the amount of Servicing Advances made or
reimbursed during the period;
(xxix) any material modifications, extensions or waivers to pool asset
terms, fees, penalties or payments during the distribution period or that have
cumulatively become material over time;
(xxx) material breaches of pool asset representations or warranties or
transaction covenants;
-125-
(xxxi) information on ratio, coverage or other tests used for
determining any early amortization, liquidation or other performance trigger and
whether the trigger was met; and
(xxxii) information regarding any pool asset changes (other than in
connection with a pool asset converting into cash in accordance with its terms),
such as 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.
(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". Assistance in
using the website can be obtained by calling the Trustee at (000) 000-0000.
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 above-referenced telephone
number 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.
The foregoing information and reports shall be prepared and determined by
the Trustee based on Mortgage Loan data and other information provided to the
Trustee by the Servicer, the Swap Counterparty, the Cap Contract Counterparty or
any other third party required to deliver information hereunder. 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, the Swap Counterparty, the Cap Contract Counterparty or any
other third party required to deliver information 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) 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) 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.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate each Form 1066Q and shall
respond promptly to written requests made not more frequently than quarterly by
any Holder of 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;
-126-
(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
(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 Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
1-A $25,000.00 $1.00 $241,175,000
2-A1 $25,000.00 $1.00 $137,625,000
2-A2 $25,000.00 $1.00 $153,232,000
2-A3 $25,000.00 $1.00 $ 39,893,000
M-1 $25,000.00 $1.00 $ 33,806,000
M-2 $25,000.00 $1.00 $ 29,829,000
M-3 $25,000.00 $1.00 $ 17,898,000
M-4 $25,000.00 $1.00 $ 16,704,000
-127-
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
M-5 $25,000.00 $1.00 $ 15,909,000
M-6 $25,000.00 $1.00 $ 15,511,000
B-1 $25,000.00 $1.00 $ 15,114,000
B-2 $25,000.00 $1.00 $ 13,522,000
B-3 $25,000.00 $1.00 $ 9,147,000
R $ 100.00 N/A $ 100.00
C (1) (1) 100%
P (2) (2) (2)
----------
(1) The Class C Certificates shall not have minimum dollar denominations as the
Certificate Principal Balance thereof shall vary over time as described
herein and shall be issued in a minimum percentage interest of 25% and an
aggregate percentage interest of 100%.
(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 Issuing Entity, 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 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.
The Certificates sold in offshore transactions in reliance on Regulation S
shall be issued initially in the form of one or more permanent global
certificates in definitive, fully registered form without interest coupons with
the applicable legends set forth in Exhibit A hereto added to the form of each
such Certificate (each, a "Regulation S Book-Entry Certificate"), which shall be
deposited on behalf of the Holders of such Certificates represented thereby with
the Trustee, as custodian for DTC and registered in the name of a nominee of
DTC, duly executed and authenticated by the Trustee and the Authenticating Agent
as hereinafter provided. The aggregate principal amounts of the Regulation S
Book-Entry Certificates may from time to time be increased or decreased by
adjustments made on the records of the Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.
The Certificates sold in reliance on Rule 144A shall be issued initially in
the form of one or more permanent global certificates in definitive, fully
registered form without interest coupons with the applicable legends set forth
in Exhibit A hereto added to the form of each such Certificate (each, a "Rule
144A Book-Entry Certificate"), which shall be deposited on behalf of the Holders
of such Certificates represented thereby with the Trustee, as custodian for DTC
and registered in the name of a nominee of DTC, duly executed and authenticated
by the Trustee and the Authenticating Agent as hereinafter provided. The
aggregate principal amounts of the Rule 144A Book-Entry Certificates may from
time to
-128-
time be increased or decreased by adjustments made on the records of the
Trustee or DTC or its nominee, as the case may be, as hereinafter provided.
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 Issuing Entity 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.
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 referenced
in the preceding sentence, including providing to the
-129-
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.
By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Trustee and any of their
respective successors that: (i) such Person is not a "U.S. person" within the
meaning of Regulation S and was, at the time the buy order was originated,
outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A or (B) in an offshore
transaction (as defined in Regulation S) in compliance with the provisions of
Regulation S, in each case in compliance with the requirements of this
Agreement; and it will notify such transferee of the transfer restrictions
specified in this Section.
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 will not constitute or result in
a non-exempt prohibited transaction under Title I of ERISA or Section 4975 of
the Code.
No transfer of an ERISA Restricted Certificate or a Class R Certificate
shall be registered unless the Trustee has received (A) a representation to the
effect 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"), and is not directly
or indirectly acquiring the ERISA Restricted Certificate or the Class R
Certificate by, on behalf of, or with any assets of any such plan (collectively,
"Plan"), or (B) solely in the case of ERISA Restricted Certificates, (I) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation to the effect 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, or (II) 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
-130-
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.
Except in the case of a Definitive Certificate, the representations set
forth in the two immediately preceding paragraphs of this Subsection 5.02(a),
other than clause (B)(II) in the immediately preceding paragraph, shall be
deemed to have been made to the Trustee by the transferee's acceptance of a
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Class of 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(a), 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(a) 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.
(b) 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 (a)
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(b)(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
-131-
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(b)
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(b), 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(a) and this Section 5.02(b) 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.
(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 separate
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
receives 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 Issuing Entity 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(a) and (b) 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 separate 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(b) 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 of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Issuing Entity, the Trustee 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
Issuing Entity, 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
-132-
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.
(c) The transferor of the Class R Certificate shall notify the Trustee
in writing upon the transfer of the Class R Certificate.
(d) [Reserved].
(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 its counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. 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 (10) Business Days after the receipt of such request, provide
the NIMs Insurer or the Depositor or such Certificateholders at such
-133-
recipients' expense the most recent list of the Certificateholders of the
Issuing Entity 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 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.
-134-
In the event that Definitive Certificates are issued pursuant to Section
5.08, clauses (a) through (g) of this Section 5.06 shall continue to be
applicable 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, the Trustee shall give all such
notices and communications to the Depository.
SECTION 5.08. Definitive Certificates
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) 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, (b) the Depositor notifies the Trustee and the Depository 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 (c) 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 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 the Trustee shall 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 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, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: FFMER 2007-5 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
-135-
(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.
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 or banking association under the laws of the
-136-
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 or 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 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.
Notwithstanding anything herein to the contrary, in preparing or furnishing
any reports or certifications pursuant to this Agreement, the Servicer shall be
entitled to rely conclusively on the accuracy of the information or data
provided to it by any other party to the Agreement and shall have no liability
for any errors therein.
-137-
SECTION 6.04. Limitation on Resignation of Servicer
Subject to the provisions of Section 7.01, the second 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 Trustee and the NIMs Insurer 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 and the Depositor 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 and the Depositor
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.
The Servicer shall provide the Trustee, 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 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. Any such policy or fidelity
bond shall by its terms not be cancelable without thirty days' prior written
notice to the Trustee.
-138-
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 (3) Business Days and, with respect to a payment
required to be made under Section 4.01 hereof, for one (1) 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 to the Trustee, the Depositor and
the Servicer by the NIMs Insurer or the Holders of Certificates evidencing
greater than 50% of the Voting Rights evidenced by the Certificates; 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 sixty
(60) days after the date on which written notice of such failure shall have been
given to the Servicer, the Trustee and the Depositor by the Trustee or the
Depositor, or to the Servicer, the Trustee and the Depositor by the Holders of
Certificates evidencing greater than 50% 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 sixty (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 the 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 3.20 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 the Trustee or any other
party to this Agreement.
If an Event of Default, described in (i) - (v) above, 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, the Trustee may, or at the direction of the NIMs Insurer or the Holders
of
-139-
Certificates evidencing greater than 50% of the Voting Rights evidenced by the
Certificates (with the written consent of the NIMs Insurer (such consent shall
not be unreasonably withheld), except after a NIMs Insurer Default), shall, by
notice in writing to the Servicer (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 related Mortgage Loans and the proceeds thereof, other than its
rights as a Certificateholder hereunder. If an Event of Default, described in
(vi) above, 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, the Trustee, at the direction of the
Depositor or at the direction of the Holders of Certificates evidencing greater
than 50% of the Voting Rights evidenced by the Certificates, shall, by notice in
writing to the Servicer (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 related 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 related 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, the Cap Contract
Counterparty and the Swap Counterparty of the occurrence of an Event of Default,
such notice to be provided in any event within two (2) 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
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 that the Servicer would have been entitled to hereunder if the
Servicer had continued to act hereunder. Notwithstanding the foregoing,
-140-
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 and 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.
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, to each Rating Agency, the Cap Counterparty
and the Swap Counterparty.
(b) Within sixty (60) days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders and the
Rating Agencies notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
-141-
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee
For purposes of this Article VIII, references to "Trustee" shall be deemed
to include LaSalle Bank National Association, in its capacity as Supplemental
Interest Trust Trustee under this Agreement and the Swap Agreement, and in
respect thereof, the Supplemental Interest Trust Trustee shall have all of the
rights, protections, immunities and benefits 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 Agreement of such
non-conformance, and if the instrument is not corrected to the 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.
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
-142-
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;
(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; and
(iv) the Trustee shall not be responsible for the acts or omissions of
any Servicer or any Subservicer, it being understood that this Agreement shall
not be construed to render any of them agents of one another.
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;
(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
other agent, custodian, accountant, attorney or independent contractor appointed
with due care by it hereunder;
-143-
(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 or the Swap
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 the 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;
(x) if requested by the Servicer, the Trustee shall 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 and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(xi) in order to comply with its duties under the U.S.A. Patriot Act,
the Trustee shall obtain and verify certain information and documentation from
the other parties hereto, including but not limited to, such party's name,
address and other identifying information.
(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
-144-
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 and any custodian shall be entitled to, such compensation as
shall be agreed to in writing by the Trustee and the Depositor (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 Bank National Association (as Trustee and in its
individual corporate capacity) and its directors, officers, employees and agents
shall be entitled to indemnification from the Issuing Entity for any loss,
liability or expense incurred in connection with (i) any audit, controversy or
judicial proceeding relating to a governmental authority or any legal proceeding
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 and (ii) the performance of their 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 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
reasonably cooperate and consult 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 or delayed; and
(iv) indemnification therefor would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii).
-145-
Any indemnification payments to the Trustee (or a custodian) pursuant to
this Section 8.06(a) shall be allocated first to principal and then, to the
extent remaining, to interest.
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 there is a NIMs Insurer and shall cease to apply
after the date on which any NIM Notes are paid in full or if there is no NIMs
Insurer; 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 not in excess of this cap may
be withdrawn by the Trustee from the Certificate Account at any time.
(d) Any custodian appointed by the Trustee as herein provided 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 minimum credit rating of at
least (i) a long-term deposit rating of at least "A2" by Xxxxx'x and "A" by S&P
or (ii) 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). 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.
-146-
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 by mailing
notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register and
each Rating Agency, not less than sixty (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 thirty (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, then the
Depositor may remove the Trustee and shall promptly appoint a successor trustee
by written instrument, in triplicate, 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, 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 to 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, the Servicer, the Cap Contract Counterparty and the
Swap Counterparty 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.
-147-
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 (10) 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
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 compensated by the Trust Fund and
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 appointed with due
care; provided that 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 fifteen (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
-148-
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
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
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 (30) 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
-149-
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 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 ten
(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
-150-
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 Issuing Entity from a payment on any Corridor Contract 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 Issuing Entity from a payment on any Corridor Contract or amounts received
by the Supplemental Interest Trust as payments on the Swap Agreement) otherwise
to be distributed to all 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 promptly notify 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
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 a tax upon any of the REMICs provided for
herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase 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
Trust Fund shall terminate upon the earlier of (1) an Optional Termination and
(2) the later of (a) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (b) 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
-151-
earlier of (x) 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 (y) the Latest
Possible Maturity Date.
(b) On any Distribution Date following the Initial Optional
Termination Date, the Servicer may, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. Upon the exercise of such option by the Servicer,
the Trustee shall immediately notify the Swap Counterparty that an Optional
Termination has occurred and that final distributions on the Certificates will
be made on the immediately following Distribution Date. Upon such notice, the
Swap Counterparty shall inform the Trustee of the final Swap Termination Payment
amount owed to the Swap Counterparty. In connection with any such optional
termination, the Optional Termination Price shall be delivered to the Trustee no
later than two (2) Business Days immediately preceding the related Distribution
Date. Notwithstanding anything to the contrary herein, the Optional Termination
Amount paid to the Trustee by the Servicer (or an Affiliate of the Servicer)
shall be deposited by the Trustee directly into the Certificate Account
immediately upon receipt. Notwithstanding anything herein to the contrary, only
an amount equal to the Optional Termination Price, reduced by the portion
thereof consisting of the sum of (x) any Swap Termination Payment and (y) the
amount of any unpaid Net Swap Payments that would not otherwise be funded by the
Optional Termination Price but for clause (iv) of the definition of "Optional
Termination Price" (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.
If the Servicer does not exercise its right under this Section 9.01(b) to
purchase all of the Mortgage Loans, the NIMs Insurer may, at its option,
terminate the Trust Fund on any Distribution Date by purchasing all of the
Mortgage Loans and REO Properties at the price equal to the Optional Termination
Price. In connection with such termination, the Optional Termination Price shall
be delivered to the Trustee no later than two (2) Business Days immediately
preceding the related Distribution Date. Notwithstanding anything to the
contrary herein, the Optional Termination Amount paid to the Trustee by the
Servicer (or an Affiliate of the Servicer) shall be deposited by the Trustee
directly into the Certificate Account immediately upon receipt.
(c) [Reserved].
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 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.
-152-
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 as soon as practicable after a
determination is made pursuant to the preceding paragraph (or with respect to an
Optional Termination, mailed no later than one Business Day following completion
of such Optional Termination). 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 and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to the Swap Counterparty and to 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 and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
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 (6) 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 (6) 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 (1) 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 or the Servicer 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 Servicer, as
applicable, to the effect that the failure of the Issuing Entity 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:
-153-
(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
(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) The Trustee as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation prepared and delivered to it by the
Depositor upon the written request of the Depositor, and the receipt of the
Opinion of Counsel referred to in Section 9.03(a) and to take such other action
in connection therewith as may be reasonably requested by the Depositor.
(d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, the Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicer and Others), and the Servicer may recover these Advances, Servicing
Advances and estimated Servicing Advances and other costs from the Collection
Account (to the extent that such recovery of Servicing Advances, estimated
Servicing Advances and other costs constitutes "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
(e) Notwithstanding any other terms of this Agreement, unless the
Servicer previously has notified the Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least twenty (20) days prior to any termination of the Trust
Fund, the Trustee or the Depositor shall notify the Servicer in writing to
transfer the assets of the Trust Fund as of the termination date to the person
specified in the notice, or if such person is not then known, to continue
servicing the assets until the date that is twenty (20) days after the
termination date and on the termination date, the Trustee or the Depositor shall
notify the Servicer of the person to whom the assets should be transferred on
that date. In the latter event the Servicer shall be entitled to recover its
servicing fee and any advances made for the interim servicing period from the
collections on the assets which have been purchased from the Trust Fund and the
new owner of the assets, and the agreements for the new owner to obtain
ownership of the assets of the Trust Fund shall so provide.
-154-
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 (such consent
shall not be unreasonably withheld) and without the consent of any of the
Certificateholders,
(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 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 and without delivery of an Opinion of Counsel (referenced in
(iv) above) 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 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, 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
Trustee, the Servicer, 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
-155-
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. A copy of such Opinion of Counsel shall
be provided to the NIMs Insurer.
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, 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 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.
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 or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer 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 could
have a materially adverse effect on the Cap Contract Counterparty or the Swap
Counterparty without first obtaining the consent of the Cap Contract
Counterparty or Swap Counterparty, respectively.
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
-156-
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 the NIMs Insurer, the Rating Agency, the Cap Contract Counterparty and the
Swap Counterparty 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;
(iii) The resignation or termination of the Trustee or the Servicer
and the appointment of any successor;
-157-
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02 and 2.03;
(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 accountants' 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 00000xxx (ii) Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of the Servicer, Home Loan
Services, Inc., 000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: VP Investor Reporting; (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--FFMER 2007-5; (e) in the
case of the Cap Contract Counterparty or the Swap Counterparty as provided for
in the Swap Agreement and the Corridor Contracts, 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; Sales; Advance Facilities
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;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
-158-
pursuant to this Agreement. No consent of the Trustee, Certificateholders or any
other party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that such
reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances and Servicing Advances funded by the Servicer to the
extent the related rights to be reimbursed therefor have not been sold, assigned
or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or the Swap Counterparty or written
confirmation from the Rating Agencies that such amendment will not adversely
affect the ratings on the Certificates. Prior to entering into an Advance
Facility, the Servicer shall notify the lender under such facility in writing
that: (a) the Advances financed by and/or pledged to the lender are obligations
owed to the Servicer on a non recourse basis payable only from the cash flows
and proceeds received under this Agreement for reimbursement of Advances only to
the extent provided herein, and the Trustee and the Trust Fund are not otherwise
obligated or liable to repay any Advances financed by the lender; (b) the
Servicer will be responsible for remitting to the lender the applicable amounts
collected by it as reimbursement for Advances funded by the lender, subject to
the restrictions and priorities created in this
-159-
Agreement; and (c) the Trustee shall not have any responsibility to track or
monitor the administration of the financing arrangement between the Servicer and
the lender.
SECTION 10.08. Limitation on Rights of Certificateholders
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 (individually and as 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 sixty (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
-160-
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(s)); 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 Issuing Entity, that the interests in
the Issuing Entity represented by the Certificates shall be 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. Compliance with Regulation AB
Each of the parties hereto acknowledges and agrees that the purpose of
Sections 3.17, 3.18 and 3.20 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.
SECTION 10.12. Third Party Rights
The Cap Contract Counterparty and the Swap Counterparty shall be deemed
third party beneficiaries of this Agreement regarding provisions related to
payments owed to the Cap Contract Counterparty or Swap Counterparty,
respectively, so long as any of the Corridor Contracts or the Swap Agreement, as
applicable, remains in effect.
The NIMs Insurer, if any, shall also be deemed to be a third party
beneficiary of this Agreement as long as NIM Notes are issued and outstanding.
SECTION 10.13. Additional Rights of the NIMs Insurer
Provided that a party to this Agreement has been provided with the contact
information of the NIMs Insurer, such party, 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 or filing required to be
provided under this Agreement and 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.
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
-161-
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.
-162-
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: Xxxx Park
Title: Authorized Signatory
LASALLE BANK NATIONAL ASSOCIATION
as Trustee
By::
------------------------------------
Name:
Title:
HOME LOAN SERVICES, INC.,
as Servicer
By::
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
A-1
Acknowledged and agreed to as of the day and year
first above written with respect to Sections 2.02, 2.03(b), 2.05 and 3.27 only.
FIRST FRANKLIN FINANCIAL CORPORATION,
as Sponsor
By:
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
A-2
EXHIBIT A
FORMS OF CERTIFICATES
FORM OF CLASS A CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-1
CLASS [_]-A[_] CERTIFICATE
Number: 07-5-[_]-A[_]-[_] Original Denomination:
$[___________]
Cut-off Date: September 1, 2007 Last Scheduled
Distribution Date: October 25, 2037
First Distribution Date: Aggregate Initial Certificate
October 25, 2007 Balance of all Class [_]-A[_]
Certificates: $[_________]
Pass-Through Rate: Variable(1) CUSIP: [____________]
----------
(1) Subject to a cap as described in the Agreement.
A-2
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class
[_]-A[_] Certificates with respect to a pool of conventional, sub-prime mortgage
loans formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class [_]-A[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first-lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class [_]-A[_] (the "Class [_]-A[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the
A-3
Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [_____] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-5
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-6
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple
"real estate mortgage investment conduits" (each, a "REMIC"). The REMIC
Regular Interests will represent "regular interests" in one of the REMICs
included in the Trust Fund. The Class R Certificate will represent the sole
class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer
and the Trustee under the Agreement shall terminate upon the earlier of (a)
an Optional Termination and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) 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 under the Agreement 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.
A-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-8
FORM OF CLASS M CERTIFICATE (PUBLIC)
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
A-9
CLASS M-[_] CERTIFICATE
Number: 07-5-M-[_]-[_] Original Denomination: $[________]
Cut-off Date: September 1, 2007 Last Scheduled Distribution Date:
October 25, 2037
First Distribution Date: October 25, 2007 Aggregate Initial Certificate
Balance of all Class M-[_____]
Certificates: $[_________]
Pass-Through Rate: Variable(2) CUSIP: [__________]
----------
(2) Subject to a cap as described in the Agreement.
A-10
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class M-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class M-[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class M-[_] (the "Class M-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the
A-11
Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-12
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-13
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in
A-14
any manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-15
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-16
FORM OF CLASS M (144A) CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
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
CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT. IF THE CERTIFICATE IS A
DEFINITIVE CERTIFICATE, NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
TRUSTEE SHALL 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.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) XX XXXXXXXXXX X, XX (X) XXXXXXX
XXX XXXXXX XXXXXX TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED BY REGULATION
S OF THE 1933 ACT ("REGULATION S")) IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S, AND IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND
A-17
SUBJECT TO THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE
AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-18
CLASS M-[_] CERTIFICATE
(Rule 144A)
Number: 07-5-M-[_]-[_] Original Denomination: $[________]
Cut-off Date: September 1, 2007 Last Scheduled Distribution Date:
October 25, 2037
First Distribution Date: October 25, 2007 Aggregate Initial Certificate
Balance of all Class M-[_]
Certificates: $[______]
Pass-Through Rate: Variable(3) CUSIP: [_________]
----------
(3) Subject to a cap as described in the Agreement.
A-19
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class M-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class M-[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class M-[_] (the "Class M-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the
A-20
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a holder of this Certificate
will receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-21
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-22
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-23
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-24
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-25
FORM OF CLASS M (REG S) CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
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
CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT. IF THE CERTIFICATE IS A
DEFINITIVE CERTIFICATE, NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
TRUSTEE SHALL 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.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES (A) THAT, UNTIL
THE EXPIRATION OF THE APPLICABLE "DISTRIBUTION COMPLIANCE PERIOD" WITHIN THE
MEANING OF REGULATION S, ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL NOT BE MADE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSON (EACH AS DEFINED IN REGULATION S) AND (B) TO OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (EACH AS DEFINED IN
REGULATION S) ONLY (1) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE 1933 ACT OR (2) TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL
A-26
BUYER" AS DEFINED IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, SUBJECT TO THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-27
CLASS M-[_] CERTIFICATE
(REGULATION S)
Number: 07-5-M-[_]-[_] Original Denomination: $[________]
Cut-off Date: September 1, 2007 Last Scheduled Distribution Date:
October 25, 2037
First Distribution Date: Aggregate Initial Certificate Balance of
October 25, 2007 all Class M-[_]
Certificates: $[________]
Pass-Through Rate: Variable(4) CUSIP: [________]
----------
(4) Subject to a cap as described in the Agreement.
A-28
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
evidencing an ownership interest in distributions allocable to the Class M-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class M-[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class M-[_] (the "Class M-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of
A-29
this Certificate will receive such holder's Percentage Interest of the amounts
required to be distributed with respect to the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-30
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [_________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
--------------------------------
Authorized Signatory
A-31
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-32
The Class A (other than the Class R Certificates), Class M, and Class
B Certificates are issuable only in registerable form, in minimum
denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the clearing agency, which shall maintain such Certificates
through its book-entry facilities. The Class R Certificates are issuable in
minimum denominations of $100 and shall be maintained in physical, fully
registered form. The Class P Certificates are issuable in minimum
denominations of 100% and shall be maintained in physical, fully registered
form. The Class C Certificates are issuable in minimum denominations of 25%
and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-33
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: ___________________________________________
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-34
FORM OF CLASS B (144A) CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
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
CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT. IF THE CERTIFICATE IS A
DEFINITIVE CERTIFICATE, NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
TRUSTEE SHALL 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.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) XX XXXXXXXXXX X, XX (X) XXXXXXX
XXX XXXXXX XXXXXX TO A PERSON WHO IS NOT A
A-35
U.S. PERSON (AS DEFINED BY REGULATION S OF THE 1933 ACT ("REGULATION S")) IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S, AND IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SUBJECT
TO THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-36
CLASS B-[_] CERTIFICATE
(Rule 144A)
Number: 07-5-B-[_]-[_] Original Denomination: $[________]
Cut-off Date: September 1, 2007 Last Scheduled Distribution Date:
October 25, 2037
First Distribution Date: Aggregate Initial Certificate Balance of
October 25, 2007 all Class B-[_]
Certificates: $[________]
Pass-Through Rate: Variable(5) CUSIP: [________]
----------
(5) Subject to a cap as described in the Agreement.
A-37
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class B-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class B-[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class B-[_] (the "Class B-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the
A-38
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a holder of this Certificate
will receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-39
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
--------------------------------
Authorized Signatory
A-40
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-41
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-42
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-43
FORM OF CLASS B (REG S) CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
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
CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT. IF THE CERTIFICATE IS A
DEFINITIVE CERTIFICATE, NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
TRUSTEE SHALL 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.
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 WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE
CODE.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES (A) THAT, UNTIL
THE EXPIRATION OF THE APPLICABLE "DISTRIBUTION COMPLIANCE PERIOD" WITHIN THE
MEANING OF REGULATION S, ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL NOT BE MADE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSON (EACH AS DEFINED IN REGULATION S) AND (B) TO OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (EACH AS DEFINED IN
REGULATION S) ONLY (1) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE 1933 ACT OR (2) TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL
A-44
BUYER" AS DEFINED IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, SUBJECT TO THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-45
CLASS B-[_] CERTIFICATE
(REGULATION S)
Number: 07-5-B-[_]-[_] Original Denomination: $[________]
Cut-off Date: September 1, 2007 Last Scheduled Distribution Date:
October 25, 2037
First Distribution Date: Aggregate Initial Certificate Balance of
October 25, 2007 all Class B-[_]
Certificates: $[________]
Pass-Through Rate: Variable(6) CUSIP: [________]
---------
(6) Subject to a cap as described in the Agreement.
A-46
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
evidencing an ownership interest in distributions allocable to the Class B-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class B-[_] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class B-[_] (the "Class B-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of
A-47
this Certificate will receive such holder's Percentage Interest of the amounts
required to be distributed with respect to the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-48
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-49
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-50
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-51
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
__________________________________________
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-52
FORM OF CLASS C CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A GRANTOR TRUST THAT HOLDS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND IS
TREATED AS HAVING ENTERED INTO CERTAIN NOTIONAL PRINCIPAL CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE CERTIFICATES TRANSFER RESTRICTIONS IN
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (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 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"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE FOR, 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 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 ERISA OR
THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE NIMS INSURER,
THE TRUSTEE, THE SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE NIMS INSURER, THE TRUSTEE, THE SERVICER OR THE
DEPOSITOR.
A-53
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
A-54
CLASS C CERTIFICATE
Number: 07-5-C-[_] Percentage Interest: 100%
Cut-off Date: September 1, 2007
First Distribution Date:
October 25, 2007
Pass-Through Rate: Variable CUSIP: [________]
A-55
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class C
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
agent for Xxxxxxx Xxxxx International, is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class C Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first-lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class C (the "Class C Certificates")
and is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under
A-56
the Agreement, the Authenticating Agent, maintained for such purpose, the
Trustee will, subject to the limitations set forth in the Agreement,
authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Trustee, of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trustee, for that purpose
and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-57
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-58
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, issued in one or more Classes of Class
A Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions therein which may be inconsistent with the
other provisions therein, to ensure continuing treatment of each REMIC included
in the Trust Fund as a REMIC, or to make any other provisions with respect to
matters or questions arising under the Agreement which are not materially
inconsistent with the provisions of the Agreement, provided that such action
does not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that any such amendment will comply with the requirements set forth in
the Agreement.
A-59
The Class A (other than the Class R Certificates), Class M, and Class B
Certificates are issuable only in registerable form, in minimum denominations of
$25,000 in initial Certificate Principal Amount and in integral multiples of $1
in excess thereof, registered in the name of the nominee of the clearing agency,
which shall maintain such Certificates through its book-entry facilities. The
Class R Certificates are issuable in minimum denominations of $100 and shall be
maintained in physical, fully registered form. The Class P Certificates are
issuable in minimum denominations of 100% and shall be maintained in physical,
fully registered form. The Class C Certificates are issuable in minimum
denominations of 25% and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) an Optional
Termination; and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) 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 under the
Agreement 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.
A-60
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
__________________________________________
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-61
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS P CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE CERTIFICATE TRANSFER RESTRICTIONS IN
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (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 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"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE FOR, 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 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 ERISA OR
THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE NIMS INSURER,
THE TRUSTEE, THE SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE NIMS INSURER, THE TRUSTEE, THE SERVICER OR THE
DEPOSITOR.
A-62
CLASS P CERTIFICATE
Number: 07-5-P-[_] Percentage Interest: 100%
Cut-off Date: September 1, 2007
First Distribution Date: CUSIP: [________]
October 25, 2007
A-63
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class P
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
agent for Xxxxxxx Xxxxx International, is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class P Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are secured
by first-lien mortgages on the Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
September 1, 2007, among the Depositor, the Servicer and LaSalle Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class P (the "Class P Certificates")
and is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee, or, if an
A-64
Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Trustee will,
subject to the limitations set forth in the Agreement, authenticate and
deliver, in the name of the designated transferee or transferees, a
Certificate of a like class and dated the date of authentication by the
Authenticating Agent. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee, of the
pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-65
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-66
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series
2007-5 Mortgage Loan Asset-Backed Certificates, issued in one or more
Classes of Class A Certificates, Class M Certificates, Class B
Certificates, Class P Certificates and Class C Certificates, each
evidencing an interest in certain distributions with respect to a pool of
conventional, sub-prime Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to
the Holders for any amount payable under this Certificate or the Agreement
or, except as expressly provided in the Agreement, subject to any liability
under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby,
and the rights, duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor
and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and
neither the Depositor nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions therein which may be
inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make
any other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee, with the consent of the NIMs Insurer, if any,
and with the consent of the Holders of Certificates evidencing in the
aggregate not less than 66 2/3% of the Percentage Interests of each Class
of Certificates affected thereby, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that any such amendment will
comply with the requirements set forth in the Agreement.
A-67
The Class A (other than the Class R Certificates), Class M, and Class
B Certificates are issuable only in registerable form, in minimum
denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the clearing agency, which shall maintain such Certificates
through its book-entry facilities. The Class R Certificates are issuable in
minimum denominations of $100 and shall be maintained in physical, fully
registered form. The Class P Certificates are issuable in minimum
denominations of 100% and shall be maintained in physical, fully registered
form. The Class C Certificates are issuable in minimum denominations of 25%
and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple
"real estate mortgage investment conduits" (each, a "REMIC"). The REMIC
Regular Interests will represent "regular interests" in one of the REMICs
included in the Trust Fund. The Class R Certificate will represent the sole
class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer
and the Trustee under the Agreement shall terminate upon the earlier of (a)
an Optional Termination; and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) 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 under the Agreement 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.
A-68
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
____________________________________, Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-69
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"RESIDUAL INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS",
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND (II) AN INTEREST IN
NOTIONAL PRINCIPAL CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC RESIDUAL INTERESTS REPRESENTED
HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR 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 ANY FEDERAL, STATE,
LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE, AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH
PLAN.
A-70
CLASS R CERTIFICATE
Number: 07-5-R-[_] Principal Balance: $[________]
Cut-off Date: September 1, 2007 Pass-Through Rate: Variable(7)
First Distribution Date: CUSIP: [________]
October 25, 2007
----------
(7) Subject to a cap as described in the Agreement.
A-71
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
evidencing an ownership interest in distributions allocable to the Class R
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
nominee for Xxxxxxx Xxxxx Funding Corporation, is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Initial Certificate Balance of all Class R Certificates) in certain
distributions with respect to a pool of conventional, sub-prime mortgage loans
(the "Mortgage Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc.
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Home Loan Services, Inc. (the "Servicer") and are
secured by first-lien mortgages on the Mortgaged Properties. The Trust Fund was
created pursuant to a pooling and servicing agreement (the "Agreement"), dated
as of September 1, 2007, among the Depositor, the Servicer and LaSalle Bank
National Association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5
Mortgage Loan Asset-Backed Certificates, Class R (the "Class R Certificate") and
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in October 2007.
Such distributions will be made to the Person in whose name this Certificate is
registered on the Record Date.
Distributions on this Certificate will be made either by wire transfer in
immediately available funds to the account of such certificateholder at a bank
or other depository institution having appropriate wire transfer facilities or,
in the case of any certificateholder that has so notified the Trustee in writing
in accordance with the Agreement, by check mailed to the address of the person
entitled to distributions as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the certificates will be
made only upon presentation and surrender of this Certificate at the office of
the Trustee or such other address designated in writing by the Trustee. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
A-72
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-73
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [________] LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates
referred to in the within-mentioned
Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-74
REVERSE OF CERTIFICATE
XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series
2007-5 Mortgage Loan Asset-Backed Certificates, issued in one or more
Classes of Class A Certificates, Class M Certificates, Class B
Certificates, Class P Certificates and Class C Certificates, each
evidencing an interest in certain distributions with respect to a pool of
conventional, sub-prime Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee.
Following the initial issuance of the Certificates, the principal
balance of this Certificate will be different from the Original
Denomination shown above. Anyone acquiring this Certificate may ascertain
its current principal balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to
the Holders for any amount payable under this Certificate or the Agreement
or, except as expressly provided in the Agreement, subject to any liability
under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby,
and the rights, duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor
and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and
neither the Depositor nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer, if any, and
without the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions therein which may be
inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make
any other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee, with the consent of the NIMs Insurer, if any,
and with the consent of the Holders of Certificates evidencing in the
aggregate not less than 66 2/3% of the Percentage Interests of each Class
of Certificates affected thereby, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Agreement or of modifying in
A-75
any manner the rights of the Holders of Certificates of such Class;
provided, however, that any such amendment will comply with the
requirements set forth in the Agreement.
The Class A (other than the Class R Certificates), Class M, and Class
B Certificates are issuable only in registerable form, in minimum
denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the clearing agency, which shall maintain such Certificates
through its book-entry facilities. The Class R Certificates are issuable in
minimum denominations of $100 and shall be maintained in physical, fully
registered form. The Class P Certificates are issuable in minimum
denominations of 100% and shall be maintained in physical, fully registered
form. The Class C Certificates are issuable in minimum denominations of 25%
and shall be maintained in physical, fully registered form.
For federal income tax purposes, the Trust Fund will include multiple
"real estate mortgage investment conduits" (each, a "REMIC"). The REMIC
Regular Interests will represent "regular interests" in one of the REMICs
included in the Trust Fund. The Class R Certificate will represent the sole
class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer
and the Trustee under the Agreement shall terminate upon the earlier of (a)
an Optional Termination; and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) 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 under the Agreement 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.
A-76
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
__________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature to this assignment
(Signature guaranty) must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Home Loan Services, Inc.
000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
[NIMS INSURER, IF ANY]
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
dated as of September 1, 2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, LaSalle Bank National Association, as trustee, Home Loan Services,
Inc., as servicer (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, 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 (A)-(B), (C) (if applicable), (D) and (E) and
the documents if actually received by it under Section 2.01(F) 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.
D-1
The Trustee 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 (E), as
applicable, inclusive, of Section 2.01 in the Agreement. The Trustee makes no
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 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 - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
Ladies and Gentlemen:
We propose to purchase Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust,
Series 2007-5, Mortgage Loan Asset-Backed Certificates, Class R, described in
the Prospectus Supplement, dated October 9, 2007, and the Prospectus, dated May
15, 2007.
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.
E-1-1
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(8)
[ ] 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.
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.
----------
(8) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
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 Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-5, 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 Xxxxxxx Xxxxx Mortgage Investors,
Inc. (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 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;
E-1-4
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.
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
E-1-5
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 - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
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 - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
RE: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
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 September
1, 2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, LaSalle
Bank National Association, as trustee, and Home Loan Services, Inc., 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 - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5,
Mortgage Loan Asset-Backed Certificates
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-5, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of September 1, 2007 (the "Pooling and Servicing Agreement"), among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), LaSalle Bank
National Association, as trustee (the "Trustee"), Home Loan Services, Inc., 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. 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
G-1
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 WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF
ERISA OR SECTION 4975 OF THE CODE.
3. The Certificates (other than the Class R Certificate) 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. IF THE CERTIFICATE IS A DEFINITIVE CERTIFICATE, NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL 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.
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 ANY TO 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 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, OR
(C) SOLELY IN THE EVENT THE CERTIFICATE 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 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 SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN
G-2
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
SERVICER, THE NIMS INSURER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A
DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION
IN (A) OR (B) ABOVE.
5. The Class R Certificate will bear a legend to the following effect:
THIS CLASS R CERTIFICATE MAY NOT BE TRANSFERRED, EXCEPT IN ACCORDANCE WITH
SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT AND THE HOLDER OF THIS
CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH CERTIFICATE ONLY IN ACCORDANCE WITH SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE
MADE UNLESS THE TRUSTEE SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE (A) A TRANSFER AFFIDAVIT FROM THE PROSPECTIVE
INVESTOR; AND (B) AN AFFIDAVIT FROM THE TRANSFEROR REGARDING THE OFFERING
AND SALE OF THE CERTIFICATE.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE 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
----------
* Not required of a broker/dealer purchaser.
G-3
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 the Employee Retirement Income Security Act of
1974, as amended ("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 will not constitute or result in a non-exempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code.
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, 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 and the NIMs
Insurer 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 Servicer, the
NIMs Insurer 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 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.
G-4
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-5
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5,
Mortgage Loan Asset-Backed Certificates
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-5, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of September 1, 2007 (the "Pooling and Servicing Agreement"), among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), LaSalle Bank
National Association, as trustee (the "Trustee"), Home Loan Services, Inc., 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:
In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely in the case of a
Certificate other than an ERISA Restricted Certificate or Class R Certificate,
either (i) we are not, and are not acquiring the Certificate for, on behalf of
or with any assets of, any employee benefit plan or other arrangement subject to
Title I of ERISA or any plan subject to Section 4975 of the Code, or (ii) until
the termination of the Swap Agreement, our acquisition and holding of the
Certificate will not
H-1
constitute or result in a non-exempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, (e)solely with respect to ERISA Restricted
Certificates, (A) 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 Internal Revenue Code of 1986, as amended (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 Persons directly or indirectly acting on behalf of or using any assets
of any such plan, or (B), if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, we are 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, or (C) solely in the event the Certificate is a
Definitive Certificate, we will herewith deliver 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 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 Servicer, the NIMs Insurer 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 Servicer or the Depositor, (f) we have not, nor has
anyone acting on our behalf offered, transferred, pledged, sold or otherwise
disposed of the Certificates, any interest in the Certificates or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Certificates, any interest in the Certificates or
any other similar security from, or otherwise approached or negotiated with
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (g) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
H-2
We agree 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:
H-3
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $____________ * in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
[ ] Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
[ ] Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by Federal, State or territorial
banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
[ ] Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over such institution or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
[ ] Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of
----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
H-4
the Securities Exchange Act of 1934, as amended.
[ ] Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of the State,
territory or the District of Columbia.
[ ] State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
[ ] ERISA Plan. The Buyer is an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974,
as amended.
[ ] Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940, as amended.
[ ] Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended.
[ ] Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-5
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
Name:
Title:
Date:
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
[ ] The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
[ ] The Buyer is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
H-7
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
H-8
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Account Manager--FFMER 2007-5
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
In connection with the administration of the Mortgage Loans held by you, as
Trustee, pursuant to the Pooling and Servicing Agreement, dated as of September
1, 2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, LaSalle
Bank National Association, as Trustee, Home Loan Services, Inc., 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
[ ] 6. Other Reason:
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 Trustee
By:
Signature Date
Documents returned to Trustee:
By:
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
FORM OF BACK-UP CERTIFICATION OF TRUSTEE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Home Loan Services, Inc.
000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of September 1,
2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Home Loan
Services, Inc., as servicer, and LaSalle Bank National Association, as
trustee, relating to Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust,
Series 2007-5, Mortgage Loan Asset-Backed Certificates
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
[2007] (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 Issuing Entity;
(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, the Depositor or other third party) to the Depositor and each Servicer
under the Pooling and Servicing Agreement for inclusion in the Reports is
included in the Reports; and
K-1
(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 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:
K-2
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
Home Loan Services, Inc. (the "Servicer") certifies to the Depositor and
the Trustee, and their officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
(1) I am responsible for reviewing the activities performed by the Servicer
under the Pooling and Servicing Agreement and I have reviewed, or persons under
my supervision have reviewed, the servicer compliance statement of the Servicer
and the compliance statements of each Subservicer, if any, engaged by the
Servicer provided to the Depositor and the Trustee for the Issuing Entity's
fiscal year [___] in accordance with Item 1123 of Regulation AB (each a
"Compliance Statement"), the report on assessment of the Servicer's compliance
with the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria") and reports on assessment of compliance with servicing
criteria for asset-backed securities of the Servicer and of each Subservicer [or
Subcontractor], if any, engaged or utilized by the Servicer provided to the
Depositor and the Trustee for the Issuing Entity's fiscal year [___] in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934,
as amended (the "Exchange Act") and Item 1122 of Regulation AB (each a
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB related to each Servicing Assessment
(each a "Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by the
Servicer during 200[ ] that were delivered or caused to be delivered by the
Servicer pursuant to the Agreement (collectively, the "Servicing Information");
(2) Based on my knowledge, and assuming the accuracy of the information
provided to the Servicer by third parties in connection with the performance of
the Servicer's duties under the Pooling and Servicing Agreement, the Servicing
Information, 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 the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the Servicing
Information;
(3) Based on my knowledge, the servicing information required to be
provided to the Trustee by the Servicer pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;
(4) Based on my knowledge and the compliance review conducted in preparing
each Compliance Statement of the Servicer and, if applicable, reviewing each
Compliance Statement of each Subservicer, if any, engaged by the Servicer, and
except as disclosed in such Compliance Statement[(s)], the Servicer [(directly
and through its Subservicers, if any)] has fulfilled its obligations under the
Pooling and Servicing Agreement in all material respects.
L-1
(5) Each Servicing Assessment of the Servicer and of each Subservicer [or
Subcontractor], if any, engaged or utilized by the Servicer and its related
Attestation Report 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 provided to the Depositor and the Trustee. Any material instances of
non-compliance are described in any such Servicing Assessment or Attestation
Report.
Date:
Home Loan Services, Inc.,
as Servicer
By:
Name:
Title:
X-0
XXXXXXX X-0
FORM OF CLASS 1-A CAP CORRIDOR CONTRACT
(THE BANK OF NEW YORK LOGO)
Dated: October 10, 2007
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. 39955
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 ("PARTY A"), a
trust company duly organized and existing under the laws of the State of New
York, and the Trust relating to the Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Series 2007-5 (the "PARTY B"), 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 September 1, 2007, among
Xxxxxxx Xxxxx Mortgage Investments, Inc., as Depositor, Home Loan Services,
Inc., 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"). Any reference to a "Swap Transaction" in
the Definitions is deemed to be a reference to a "Transaction" for purposes of
this Agreement, and any reference to a "Transaction" in this Agreement is deemed
to be a reference to a "Swap Transaction" for purposes of the Definitions. 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. For the avoidance of doubt, the Transaction
described herein shall be the sole Transaction governed by such ISDA Form Master
Agreement. Except as otherwise specified, references herein to Sections shall be
to Sections of 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 number 39956 and 39957. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the 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
lesser of: (i) the amount set forth on Schedule
I attached hereto for such Calculation Period
and (ii) the aggregate Certificate Principal
Balance of the Class 1-A and Class R
Certificates (as defined in the Pooling and
Servicing Agreement) for such Floating Rate
Payer Payment Date.
The Trustee under the Pooling and Servicing
Agreement shall provide at least two (2)
business days notice prior to each
M1-1
Floating Rate Payer Payment Date for each
Calculation Period to The Bank of New York if
the aggregate Certificate Principal Balance of
Class 1-A and Class R Certificates is less than
the Schedule I attached hereto
Trade Date: October 5, 2007
Effective Date: October 10, 2007
Termination Date: June 25, 2014, subject to adjustment in
accordance with the Modified Following Business
Day Convention.
FIXED AMOUNTS
Fixed Amount Payer: Party B has directed Xxxxxxx Xxxxx Mortgage
Lending, Inc. to make payment of the Fixed
Payment Amount on its behalf.
Fixed Amount: USD [___]
Fixed Amount Payer
Payment Date: October 10, 2007
FLOATING AMOUNTS
Floating Rate Payer: Party A
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Ceiling 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 the Ceiling Rate then the Floating
Rate Option for such Calculation Period shall be
deemed equal to the Ceiling Rate.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on October
25, 2007 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 one (1)
Business Day preceding each Floating Rate Payer
Period End Date.
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days for Payments
M1-2
By both parties: New York and Illinois
Calculation Agent: Party A
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.
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating Agency rates
the Certificates, such terms refer to each Rating Agency and its criteria
separately rather than collectively.
"RATING AGENCY" .means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc., or
Derivative Fitch Ltd., or any subsidiary, or successor thereof.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING RATINGS",
and "DISQUALIFYING RATINGS" have the meanings assigned in Part 5(i)(i).
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
DEFINITIONS INCORPORATED BY REFERENCE. Capitalized terms used in this Agreement
that are not defined herein and are defined in the Pooling and Servicing
Agreement have the meanings assigned therein. In the event of any inconsistency
between the terms of this Agreement and the terms of the Pooling and Servicing
Agreement, this Agreement will govern.
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" in relation to Party A or Party B shall mean: none.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(c) APPLICABILITY. The following provisions apply or do not apply to the parties
as specified below:
(i) Section 5(a)(i) (FAILURE TO PAY OR DELIVER):
(A) will apply to Party A; and
(B) will apply to Party B.
(ii) Section 5(a)(ii) (BREACH OF AGREEMENT):
(A) will apply to Party A; and
(B) will not apply to Party B.
M1-3
(iii) Section 5(a)(iii) (CREDIT SUPPORT DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B;
provided, that, with respect to Moody's Limited Qualifying Ratings and
Moody's Disqualifying Ratings, (x) this will apply only to Moody's
Disqualifying Ratings that have continued for at least 30 Local
Business Days, and (y) at least one Qualified Transferee has made an
offer which remains capable of becoming legally binding upon
acceptance to enter into a Permitted Transfer or other Replacement
Transaction.
(iv) Section 5(a)(iv) (MISREPRESENTATION):
(A) will apply to Party A; and
(B) will not apply to Party B.
(v) Section 5(a)(v) (DEFAULT UNDER SPECIFIED TRANSACTION):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(vi) Section 5(a)(vi) (CROSS DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B.
For the purposes of Section 5(a)(vi):
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section
14, except that it shall not include indebtedness in respect of
deposits received.
"THRESHOLD AMOUNT" means, 3% of consolidated shareholders equity of
Party A (or any guarantor under a Qualified Guaranty) and its
subsidiaries determined in accordance with generally accepted
accounting principles in the jurisdiction of its organization
consistently applied as of the last day of the fiscal year ended
immediately prior to the occurrence or existence of an event for which
a Threshold Amount is applicable under Section 5(a)(vi).
(vii) Section 5(a)(vii) (BANKRUPTCY):
(A) will apply to Party A; and
(B) will not apply to Party B with respect to subclauses (2), (4) (but
only if the proceeding or petition is instituted or presented by Party
A or its affiliates), (7), (8) (but subclause (8) will not apply to
Party B only to the extent that subclauses (2), (4) and (7) do not
apply to Party B) and (9) of Section 5(a)(vii), and the remaining
provisions of Section 5(a)(vii) will apply to Party B; and in
subclause (6) the words "trustee" and "custodian" will not include the
Trustee and the words "seeks or" will be deleted.
(viii) Section 5(a)(viii) (MERGER WITHOUT ASSUMPTION):
(A) will apply to Party A; and
(B) will apply to Party B.
(ix) Section 5(b)(i) (ILLEGALITY):
(A) will apply to Party A; and
(B) will apply to Party B.
M1-4
(x) Section 5(b)(ii) (TAX EVENT):
(A) will apply to Party A; and
(B) will apply to Party B;
provided that the words "(x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y)" shall be deleted.
(xi) Section 5(b)(iii) (TAX EVENT UPON MERGER):
(A) will apply to Party A; and
(B) will apply to Party B,
provided, that Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event upon Merger in respect of
which it is the Affected Party.
(xii) Section 5(b)(iv) (CREDIT EVENT UPON MERGER):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(xiii) Section 5(b)(v) (ADDITIONAL TERMINATION EVENT):
(A) will apply to Party A with respect to Part 1(g)(iv) and (v); and
(B) will apply to Party B with respect to Parts 1(g)(i), (ii), and
(iii).
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply. For such purpose, if Party A is the
Affected Party in respect of an Additional Termination Event or a Tax Event Upon
Merger or the Defaulting Party in respect of any Event of Default (but not, in
any case, in respect of a Termination Event arising from an Illegality or Tax
Event), the following provisions shall apply:
(i) The definitions of "Market Quotation" and "Settlement Amount" are
amended in their entirety to read as follows:
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, an offer capable when made of becoming legally binding
upon acceptance made by a Qualified Transferee for an amount that
would be paid to Party B (expressed as a negative number) or by Party
B (expressed as a positive number) in consideration of an agreement
between Party B and such Qualified Transferee to enter into a
transaction with commercial terms substantially the same as and that
are, in all material respects, no less beneficial for Party B than,
those of this Agreement (save for the exclusion of provisions relating
to Transactions that are not Terminated Transactions) (which shall be
determined by Party B, acting in a commercially reasonable manner),
that would have the effect of preserving the economic equivalent for
Party B of any payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date (such
transaction, a "REPLACEMENT TRANSACTION"). For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of
Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date,
have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included.
"SETTLEMENT AMOUNT" means, with respect to any Early Termination Date:
M1-5
(1) if, on or prior to such Early Termination Date, a Market Quotation
for the relevant Terminated Transaction or group of Terminated
Transactions is accepted by Party B so as to become legally binding:
the Termination Currency Equivalent of the amount (whether
positive or negative) of such Market Quotation;
(2) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions
has been accepted by Party B so as to become legally binding and one
or more Market Quotations have been communicated to Party B and remain
capable of becoming legally binding upon acceptance by Party B:
the Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market Quotations
(for the avoidance of doubt, (x) a Market Quotation
expressed as a negative number is lower than a Market
Quotation expressed as a positive number and (y) the lower
of two Market Quotations expressed as negative numbers is
the one with the largest absolute value); or
(3) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding and no Market
Quotations have been communicated to Party B and remain capable of
becoming legally binding upon acceptance by Party B:
Party B's Loss (whether positive or negative and without
reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions."
(ii) At any time on or before the Early Termination Date at which two or
more Market Quotations remain capable of becoming legally binding upon
acceptance, Party B shall be entitled to accept only the lowest of such
Market Quotations. (For the avoidance of doubt, (i) a Market Quotation
expressed as a negative number is lower than a Market Quotation expressed
as a positive number and (ii) the lower of two Market Quotations expressed
as negative numbers is the one with the largest absolute value.)
(iii) if Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Early
Termination Date.
(iv) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
shall be deleted in its entirety and replaced with the following:
"SECOND METHOD AND MARKET QUOTATION. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal to
the absolute value of the Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts owing to Party A
and (3) Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B, Provided that, (i)
the amounts payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) and (ii) notwithstanding any other
provision of this Agreement, any amount payable by Party A under (3)
shall not be netted-off against any amount payable by Party B under
(1)."
(f) "TERMINATION CURRENCY" means United States Dollars.
(g) "ADDITIONAL TERMINATION EVENT" will apply. The following shall constitute
Additional Termination Events, and the party specified shall be the Affected
Party with respect thereto:--
(i) TERMINATION OF TRUST FUND. The Trust, Supplemental Interest Trust or
Trust Fund shall be terminated pursuant to any provision of the Pooling and
Servicing Agreement (including, without limitation, by exercise of the
option to purchase and giving of notice under Sections 9.01 and 10.01 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 and the Supplemental Interest Trust or Trust Fund is
terminated and final payment is made in respect of
M1-6
the Certificates. Party B shall be the sole Affected Party. However, each
of Party A and Party B may designate an Early Termination Date in respect
of this Additional Termination Event.
(ii) INABILITY TO PAY CERTIFICATES. The Trust is unable to pay or fails or
admits in writing its inability to pay (i) on any Distribution Date, any
Current Interest with respect to the Class A Certificates or (ii) by the
Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date, [the ultimate payment of principal with
respect to the Class A Certificates, in either case to the extent required
pursuant to the terms of the Pooling and Servicing Agreement to be paid to
the Class A Certificates. Party B shall be the sole Affected Party.
(iii) AMENDMENT OF POOLING AND SERVICING AGREEMENT. The amendment of the
Pooling and Servicing Agreement in a manner which could have a material
adverse effect on Party A without first obtaining the prior written consent
of Party A (such consent not to be unreasonably withheld), where such
consent is required under the Pooling and Servicing Agreement. Party B
shall be the sole Affected Party.
(iv) RATINGS DOWNGRADE. Party A or any guarantor under a Qualified Guaranty
(1) has Limited Qualifying Ratings or Disqualifying Ratings, and Party A
fails to take the actions provided in Part 5(i)(ii)(Posting of Collateral),
within the time periods set out therein, or (2) has Disqualifying Ratings
and Party A fails to take the actions provided in Part
5(i)(iii)(Replacement or Guaranty), within the time periods set out
therein;
provided, that, with respect to Xxxxx'x Disqualifying Ratings, (1) such
failure to comply with Part 5(i)(ii) will be treated as an Event of Default
subject to the provisions of Part 1(c)(iii), and not as an Additional
Termination Event, and (2) an Additional Termination Event with respect to
Xxxxx'x will not be constituted with respect to Part 5(i)(iii) unless and
until at least one Qualified Transferee has made an offer which remains
capable of becoming legally binding upon acceptance to enter into a
Permitted Transfer or other Replacement Transaction.
Party A shall be the sole Affected Party.
(v) REGULATION AB. Party A shall fail to comply with the provisions of Part
5 (j) within the time provided for therein. Party A shall be the sole
Affected Party.
Party B shall not effectively designate an Early Termination Date unless and
until it has given prior written notice thereof to each Rating Agency.
Part 2. TAX REPRESENTATIONS AND CERTAIN TAX-RELATED PROVISIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), Party A and
Party B 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), Party A and Party B
make the following representations.
(i) The following representation will apply to Party A:
M1-7
(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 ("TREAS.
REG.")) 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 (z) its U.S. taxpayer identification number is
000000000.
(ii) The following representation will apply to Party B:
None.
(c) ADDITIONAL AMOUNTS NOT PAYABLE BY PARTY B. Party B shall not be required to
pay any additional amounts pursuant to Section 2(d)(i)(4).
(d) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14 is
amended in its entirety to read as follows:
"INDEMNIFIABLE TAX" means in relation to payments by Party A any Tax and in
relation to payments by Party B no Tax.
Part 3. AGREEMENT TO DELIVER DOCUMENTS. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE DATE BY WHICH TO BE DELIVERED
----------------- ------------------------------------------ -----------------------------------
Party A and Party B A correct, complete and executed Internal (i) Prior to the first scheduled
Revenue Service Form W-9, with respect to Distribution Date; (ii) in the case
Party A, and X-0, X-0XXX, X-0XXX, or of a U.S. Internal Revenue Service
W-8IMY, with appropriate attachments, as Form W-8ECI, W-8IMY, and W-8BEN that
applicable, with respect to Party B, or does not include a U.S. taxpayer
any other or successor form, in each case identification number in line 6,
that establishes an exemption from before December 31 of each third
deduction or withholding obligations, and succeeding calendar year, (iii)
any other document reasonably requested promptly upon reasonable demand by
to allow the other party to make payments the other party; and (iv) promptly
under this Agreement without any upon learning that any form
deduction or withholding for or on the previously provided by to the other
account of any tax. party has become obsolete or
incorrect.
(b) Other documents to be delivered are:
COVERED BY
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE SECTION 3(D)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
------------------- ------------------------------------------ ------------------- --------------
Party A A certificate of an authorized officer of Upon the execution Yes
the party, as to the incumbency and and delivery of
authority of the respective officers of this Agreement
the party signing this Agreement, any
relevant Credit Support Document, or any
Confirmation, as the case may be.
Party B (i) a copy of the executed Pooling and With respect to (i) Yes
Servicing Agreement, (ii) an incumbency upon the execution
certificate verifying the true signatures and delivery of the
and authority of the person or persons Pooling and
signing this Agreement on behalf of Party Servicing
B , and (iii) a certified copy of the Agreement, and
authorizing resolution (or equivalent with respect to
authorizing documentation) of Trustee (ii) and (iii) upon
which sets forth the authority of each the execution and
signatory to the delivery of this
M1-8
Confirmation signing on its behalf and Agreement
the authority of such party to enter into
Transactions contemplated and performance
of its obligations hereunder.
Party A and Party B A legal opinion as to enforceability of Upon the execution No
this Agreement and any Confirmation and delivery of
evidencing a Transaction hereunder. this Agreement and
such Confirmation
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A:
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)
A copy of any notice or other communication with respect to Sections 5 or 6
should also be sent to the addresses set out below:
The Bank of New York
Legal Department
Xxx Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY B:
Global Securities and Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xx.
4 World Financial Center, 10th floor
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(For all purposes.)
M1-9
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:-- not applicable.
Party B appoints as its Process Agent:-- not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is a Multibranch Party and will enter into each Transaction only
through the following Office:- New York (for all Transactions).
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) "CREDIT SUPPORT DOCUMENT" Credit Support Document means in relation to:--
Party A: The Credit Support Annex hereto and any Qualified Guaranty.
Party B: Not applicable.
(g) "CREDIT SUPPORT PROVIDER" means in relation to:
Party A: The guarantor under any Qualified Guaranty.
Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) NETTING OF PAYMENTS; MODIFICATION OF SECTION 2(A)(III)(1). Subparagraph (ii)
of Section 2(c) will apply. Section 2(a)(iii)(1) is amended by deleting "or
Potential Event of Default".
(j) "AFFILIATE" will have the meaning specified in Section 14, provided, that,
Party B shall not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii) hereof.
(k) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding after
Section 3(f) the following subsections:
"(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) 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
(ii) 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.
M1-10
(h) EXCLUSION FROM COMMODITY EXCHANGE ACT. (1) It is an "eligible contract
participant" within the meaning of Section 1a(12) of the Commodity Exchange
Act, as amended; (2) this Agreement and each Transaction is subject to
individual negotiation by such party; and (3) 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) SWAP AGREEMENT. Each Transaction is a "swap agreement" as defined in 12
U.S.C. Section 1821(e)(8)(D)(vi) and a "covered swap agreement" as defined
in the Commodity Exchange Act (7 U.S.C. Section 27(d)(1))."
(l) 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.
Part 5. OTHER PROVISIONS.
(a) 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.
(b) 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.
(c) SET-OFF. All payments under this Agreement shall be made without set-off or
counterclaim, except as provided in Section 2(c), Section 6 or the provisions
hereof relating to Market Quotation and Loss, or Paragraph 8 of the Credit
Support Annex. Section 6(e) is amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off." For the avoidance of
doubt, if more than one Transaction is entered into under this Agreement,
nothing herein is intended to prevent the determination of a Settlement Amount
with respect to all such Transactions pursuant to Section 6 (as modified
hereby).
(d) FAILURE TO PAY OR DELIVER. Section 5(a)(i) is hereby amended by replacing
the word "third" by the word "second" in the third line thereof.
(e) NON-RECOURSE. Notwithstanding any provision herein or in this Agreement to
the contrary, the obligations of the Trust hereunder are limited recourse
obligations of the Trust, payable solely from amounts on deposit in the Corridor
Account . In the event that the Corridor Account and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the realization of
the Corridor Account and the distribution of the proceeds thereof in accordance
with the Pooling and Servicing Agreement, any claims against or obligations of
the Trust under this Agreement or any confirmation hereunder still outstanding
shall be extinguished and thereafter not revive. This provision shall survive
the termination of this Agreement.
(f) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. Party A shall not
institute against or cause any other person to institute against, or join any
other person in instituting against Party B, the Depositor or the Trust, 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 termination of this Agreement.
(g) TRANSFER, ASSIGNMENT. Notwithstanding the provisions of Sections 6(b)(ii)
and 7, no novation, assignment or transfer of any Transaction shall be permitted
by either party, unless the Rating Agency Condition with respect to each Rating
Agency is satisfied with respect thereto, except that Party A may, if
M1-11
each Rating Agency and the non-assigning party has received prior written notice
thereof (1) transfer all or any part of its interest in any amount payable to it
if Party B is a Defaulting Party under Section 6(e) or (2) effect a Permitted
Transfer of this Agreement to any other entity at any time (A) Party A or any
guarantor under a Qualified Guaranty has Limited Qualifying Ratings or
Disqualifying Ratings, (B) pursuant to Section 6(b)(ii), (C) pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity, (D) to another of its
offices or branches; or (E) to an Affiliate. The consent of Party B shall not be
required for a novation, assignment or transfer by Party A in accordance with
clauses (1) and (2) of the preceding sentence and Party B shall take all steps
reasonably requested by Party A (at the expense of Party A) to effect a
Permitted Transfer. A "PERMITTED TRANSFER" means a novation or assignment to or
entry into another form of Replacement Transaction pursuant to which a Qualified
Transferee acquires and assumes or enters into a Replacement Transaction by a
written instrument in respect of all the Transactions and the rights,
liabilities, duties and obligations of Party A hereunder and with respect to
which (1) there is no adverse effect on netting or set-off rights, (2) neither
Party A nor the transferee will be required to withhold or deduct on account of
any Tax from any payments under this Agreement in excess of what would have been
required to be withheld or deducted in the absence of such transfer, (3) an
Event of Default or Termination Event would not occur as a result, and (4) (x)
with respect to any Rating Agency, the terms of the Transactions are not
modified other than parties, effective date of said transfer, and tax payee
representations of Party A (and in such case, it shall not be a condition of
such Replacement Transaction that it preserve for Party B the economic
equivalent of all payment and delivery obligations hereunder and be in all
material respects no less beneficial for Party B than those of the
Transactions), or (y) with respect to Xxxxx'x, the terms of the Transactions are
modified to a greater extent than provided in (x) but the definition of
Replacement Transaction is otherwise complied with.
(h) AMENDMENT. Notwithstanding the provisions of Section 9(b), each amendment,
modification or waiver in respect of this Agreement shall be subject to the
Rating Agency Condition with respect to each Rating Agency.
(i) RATINGS DOWNGRADE.
(i)DEFINITIONS. For purposes of each Transaction:
(A) "RATING AGENCY CONDITION" means, with respect to any action taken
or to be taken hereunder, a condition that is satisfied when the
relevant Rating Agency has confirmed in writing to the Trustee that
such action will not result in withdrawal, reduction or other adverse
action with respect to any then-current rating by the Rating Agency of
the Certificates.
(B) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any
guarantor under a Qualified Guaranty, in the cases when such debt has
both short-term and long-term debt ratings and when such debt has only
long-term ratings, will be "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS" and "DISQUALIFYING RATINGS", as identified below:
M1-12
RATINGS OF PARTY A OR
GUARANTOR UNDER A QUALIFIED
RATING AGENCY: GUARANTY:
-------------- -----------------------------------------
HAS LONG-TERM AND HAS ONLY LONG-TERM
SHORT-TERM RATINGS RATINGS
"QUALIFYING RATINGS":
XXXXX'X: P-1 and A2 or above A1 or above
S&P: A-1 or above A+ or above
FITCH: F1 and A or above A or above
"LIMITED QUALIFYING RATINGS":
XXXXX'X: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a Qualified A-2 A, A- or BBB+
Guaranty is a Financial Institution:
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS":*
XXXXX'X: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a Qualified Guaranty A-3 or below BBB or below
is a Financial Institution:(Financial Institution)
If neither Party A nor guarantor under a Qualified A-2 or below A or below
Guaranty is a Financial Institution:(Other)
FITCH: F3 or BBB or below BBB or below
* The withdrawal by Xxxxx'x of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
(C) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance
company, structured investment vehicle or derivative product company.
(D) "QUALIFIED TRANSFEREE" means a transferee of a novation or
assignment or a party (other than Party B) that enters into another
form of Replacement Transaction that is a Reference Market-maker
("dealer" in the definition thereof meaning a "dealer in notional
principal contracts" as defined in Treas. Reg. Section 1.1001-4) that
has Qualifying Ratings or Limited Qualifying Ratings assigned by each
Rating Agency, or whose present and future obligations owing to Party
B are guaranteed pursuant to a Qualified Guaranty.
(E) "QUALIFIED GUARANTY" means an unconditional and irrevocable
guaranty of payment (and not of collection) and the performance of the
other obligations of Party A (or a Qualified Transferee, as
applicable) hereunder by a third party that has Qualifying Ratings or
Limited Qualifying Ratings assigned by each Rating Agency ("QUALIFIED
GUARANTOR") in a form that satisfies the S&P Rating Condition and that
provides, inter alia, that payment thereunder shall be made as
provided and on the conditions set forth in Section 2(d) as modified
hereunder (substituting references to Party A as "X" with the
guarantor as "X" and "this Agreement" with such guaranty,
respectively) (or, in lieu of such provisions relating to tax, a law
firm has given a legal opinion confirming that none of the guarantor's
payments to Party B under such guaranty will be subject to withholding
for Tax).
(ii) POSTING OF COLLATERAL. If Party A or any guarantor under a Qualified
Guaranty is assigned Limited Qualifying Ratings or Disqualifying Ratings by
a Rating Agency, then, within, with respect to:
M1-13
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or if such ratings exist from the time Party A becomes a party
hereto or the guarantor under a Qualified Guaranty becomes such guarantor,
from such time), and for so long as such Limited Qualifying Ratings or
Disqualifying Ratings continue, Party A shall, at its own expense, post
collateral in accordance with the Credit Support Annex.
(iii) REPLACEMENT OR GUARANTY. If Party A or any guarantor under a
Qualified Guaranty is assigned Disqualifying Ratings by a Rating Agency,
then, within, with respect to:
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: sixty (60) calendar days
(3) FITCH: thirty (30) calendar days
thereafter, Party A shall, at its own expense, (x) novate, assign or
transfer the Transactions to or replace the Transactions with Replacement
Transactions with a Qualified Transferee, or (y) obtain a Qualified
Guaranty.
(j) REGULATION AB.
(a) 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 Party A
has not, within 30 days after receipt of a Swap Disclosure Request complied
with the provisions set forth below in this Part 5(j) (provided that if the
significance percentage reaches 10% after a Swap Disclosure Request has
been made to Party A, Party A must comply with the provisions set forth
below in this Part 5(j) within 10 calendar days of Party A being informed
of the significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to Party A and Party A
shall be the sole Affected Party with respect to such Additional
Termination Event.
(b) Party A 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 Party A or its group of affiliated
entities, if applicable, depending on the aggregate "significance
percentage" of this Agreement and any other derivative contracts between
Party A or its group of affiliated entities, if applicable, and the Party
B, as calculated from time to time in accordance with Item 1115 of
Regulation AB.
(c) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to eight (8)
percent, then the Depositor may request on a Business Day after the date of
such determination from Party A 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 Party
B or the Depositor shall provide Party A with the calculations and any
other information reasonably requested by Party A 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 Party A's option, either
the information set forth in Item 1115(b)(1) or Item 1115(b)(2) of
Regulation AB.
(d) Upon the occurrence of a Swap Disclosure Request, Party A, at its own
expense, shall (x) provide the Depositor with the Swap Financial Disclosure
in an Xxxxx-compatible format, or (y) subject to Rating Agency Condition
with respect to each Rating Agency, secure another entity to replace Party
A 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.
M1-14
(e) Party A's obligation to comply with this Paragraph 4(9) shall be
suspended as of January 1, 2008 unless, at any time, Party A receives
notification from the Depositor or the Party B that the Trust Fund's
obligation to file periodic reports under the Exchange Act shall continue;
provided, however, that such obligations shall not be suspended in respect
of any Exchange Act Report or amendment to an Exchange Act Report in such
fiscal year which relates to any fiscal year in which the Trust Fund was
subject to the reporting requirements of the Exchange Act. This obligation
shall continue to be suspended unless the Depositor or the Party B notifies
Party A that the Trust Fund's obligations to file reports under the
Exchange Act has resumed.
(k) TRUSTEE 'S CAPACITY. It is expressly understood and agreed by the parties
hereto that, insofar as this Agreement and any confirmation evidencing a
Transaction hereunder is executed by LaSalle Bank National Association, (i) this
Agreement and such confirmation are executed and delivered by LaSalle Bank
National Association, not in its individual capacity but solely as Trustee of
the Trust pursuant to the Pooling and Servicing Agreement in the exercise of the
powers and authority conferred upon and vested in it thereunder, and pursuant to
instruction set forth therein, (ii) each of the representations, undertakings
and agreements herein or therein made on behalf of the Trust is made and
intended not as a personal representation, undertaking or agreement of LaSalle
Bank National Association but is made and intended for the purpose of binding
only the Trust, 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 Agreement or any such confirmation
(l) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as Trustee of
the Trust, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to enter
into this Agreement and each confirmation evidencing a Transaction
hereunder as Trustee on behalf of the Trust.
(m) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6, if
Party B has satisfied its payment obligations under Section 2(a)(i), and shall,
at the time, have no future payment or delivery obligation, whether absolute or
contingent, then unless Party A is required pursuant to appropriate proceedings
to return to Party B or otherwise returns to Party B upon demand of Party B any
portion of such payment, (a) the occurrence of an event described in Section
5(a) with respect to Party B shall not constitute an Event of Default or
Potential Event of Default with respect to Party B as the Defaulting Party and
(b) Party A shall be entitled to designate an Early Termination Date pursuant to
Section 6 only as a result of a Termination Event set forth in either Section
5(b)(i) or Section 5(b)(ii) with respect to Party A as the Affected Party or
Section 5(b)(iii) with respect to Party A as the Burdened Party or Part 1(g)
with Party B as the Affected Party.
(n) 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 Party A. MLML further agrees to
provide notice to Party A upon any remittance to the Trustee.
M1-15
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
PAYMENTS TO Party A:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #000000000
Account #000-0000-000
Reference: Interest Rate Swap
PAYMENTS TO PARTY B:
LaSalle Bank
ABA# 000000000
LaSalle CHGO/CTR/BNF:/LASALLE TRUST
A/C# 725059.2
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.
M1-16
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
A. BY:
------------------------------
Name:
Title:
M1-17
The Party B, acting through its duly authorized signatory, hereby agrees
to, accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR THE XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
B. BY:
------------------------------
Name:
Title:
Solely with respect to Part 5(n)
II.XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
Title:
M1-18
SCHEDULE I
(all such dates subject adjustment in accordance with the Modified Following
Business Day Convention)
Notional
From and To but Amount Cap Rate Ceiling Rate
including excluding (in USD) (%) (%)
--------- --------- ----------- -------- ------------
10/10/07 10/25/07 241,175,000 10.150 10.150
10/25/07 11/25/07 238,997,799 7.081 10.150
11/25/07 12/25/07 236,388,721 7.345 10.150
12/25/07 01/25/08 233,351,196 7.081 10.150
01/25/08 02/25/08 229,887,572 7.081 10.150
02/25/08 03/25/08 226,006,147 7.628 10.150
03/25/08 04/25/08 221,712,867 7.081 10.150
04/25/08 05/25/08 217,019,593 7.345 10.150
05/25/08 06/25/08 211,940,469 7.080 10.150
06/25/08 07/25/08 206,562,404 7.345 10.150
07/25/08 08/25/08 200,954,372 7.080 10.150
08/25/08 09/25/08 195,430,460 7.080 10.150
09/25/08 10/25/08 0 0.000 0.000
10/25/08 11/25/08 0 0.000 0.000
11/25/08 12/25/08 0 0.000 0.000
12/25/08 01/25/09 0 0.000 0.000
01/25/09 02/25/09 0 0.000 0.000
02/25/09 03/25/09 0 0.000 0.000
03/25/09 04/25/09 0 0.000 0.000
04/25/09 05/25/09 0 0.000 0.000
05/25/09 06/25/09 0 0.000 0.000
06/25/09 07/25/09 0 0.000 0.000
07/25/09 08/25/09 0 0.000 0.000
08/25/09 09/25/09 0 0.000 0.000
09/25/09 10/25/09 0 0.000 0.000
10/25/09 11/25/09 0 0.000 0.000
11/25/09 12/25/09 0 0.000 0.000
12/25/09 01/25/10 0 0.000 0.000
01/25/10 02/25/10 0 0.000 0.000
02/25/10 03/25/10 0 0.000 0.000
03/25/10 04/25/10 0 0.000 0.000
04/25/10 05/25/10 0 0.000 0.000
05/25/10 06/25/10 0 0.000 0.000
06/25/10 07/25/10 0 0.000 0.000
07/25/10 08/25/10 0 0.000 0.000
08/25/10 09/25/10 0 0.000 0.000
09/25/10 10/25/10 0 0.000 0.000
10/25/10 11/25/10 0 0.000 0.000
11/25/10 12/25/10 0 0.000 0.000
12/25/10 01/25/11 0 0.000 0.000
01/25/11 02/25/11 0 0.000 0.000
M1-19
02/25/11 03/25/11 0 0.000 0.000
03/25/11 04/25/11 0 0.000 0.000
04/25/11 05/25/11 0 0.000 0.000
05/25/11 06/25/11 0 0.000 0.000
06/25/11 07/25/11 0 0.000 0.000
07/25/11 08/25/11 54,166,151 10.864 12.000
08/25/11 09/25/11 52,917,358 10.638 12.000
09/25/11 10/25/11 51,697,172 10.655 12.000
10/25/11 11/25/11 50,504,937 10.223 12.000
11/25/11 12/25/11 49,340,008 10.282 12.000
12/25/11 01/25/12 48,201,758 9.862 12.000
01/25/12 02/25/12 47,089,572 9.688 12.000
02/25/12 03/25/12 46,002,850 10.046 12.000
03/25/12 04/25/12 44,941,008 9.374 12.000
04/25/12 05/25/12 43,903,473 9.476 12.000
05/25/12 06/25/12 42,861,824 9.082 12.000
06/25/12 07/25/12 40,875,659 9.422 12.000
07/25/12 08/25/12 38,930,205 9.693 12.000
08/25/12 09/25/12 37,086,420 9.629 12.000
09/25/12 10/25/12 35,339,416 9.165 12.000
10/25/12 11/25/12 33,704,527 8.862 12.000
11/25/12 12/25/12 32,879,669 9.155 12.000
12/25/12 01/25/13 32,123,711 9.006 12.000
01/25/13 02/25/13 31,385,444 9.506 12.000
02/25/13 03/25/13 30,664,737 10.569 12.000
03/25/13 04/25/13 29,960,420 9.544 12.000
04/25/13 05/25/13 29,272,045 9.861 12.000
05/25/13 06/25/13 28,599,249 9.541 12.000
06/25/13 07/25/13 27,941,676 10.007 12.000
07/25/13 08/25/13 27,299,399 10.179 12.000
08/25/13 09/25/13 26,672,225 10.218 12.000
09/25/13 10/25/13 26,059,274 10.556 12.000
10/25/13 11/25/13 25,460,165 10.213 12.000
11/25/13 12/25/13 24,874,586 10.550 12.000
12/25/13 01/25/14 24,302,229 10.351 12.000
01/25/14 02/25/14 23,743,114 10.841 12.000
02/25/14 03/25/14 23,197,026 12.000 12.000
03/25/14 04/25/14 22,663,290 10.875 12.000
04/25/14 05/25/14 22,141,585 11.233 12.000
05/25/14 06/25/14 21,631,639 10.867 12.000
M1-20
Exhibit A to Confirmation No. 39955
[Credit Support Annex to follow this page]
M1-21
EXHIBIT M-2
FORM OF CLASS 2-A CAP CORRIDOR CONTRACT
(THE BANK OF NEW YORK LOGO)
Dated: October 10, 2007
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. 39956
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 ("PARTY A"), a
trust company duly organized and existing under the laws of the State of New
York, and the Trust relating to the Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Series 2007-5 (the "PARTY B"), 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 September 1, 2007, among
Xxxxxxx Xxxxx Mortgage Investments, Inc., as Depositor, Home Loan Services,
Inc., 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"). Any reference to a "Swap Transaction" in
the Definitions is deemed to be a reference to a "Transaction" for purposes of
this Agreement, and any reference to a "Transaction" in this Agreement is deemed
to be a reference to a "Swap Transaction" for purposes of the Definitions. 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. For the avoidance of doubt, the Transaction
described herein shall be the sole Transaction governed by such ISDA Form Master
Agreement. Except as otherwise specified, references herein to Sections shall be
to Sections of 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 number 39955 and 39957. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the 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
lesser of: (i) the amount set forth on Schedule
I attached hereto for such Calculation Period
and (ii) the aggregate Certificate Principal
Balance of the Class 2-A Certificates (as
defined in the Pooling and Servicing Agreement)
for such Floating Rate Payer Payment Date.
The Trustee under the Pooling and Servicing
Agreement shall provide at least two (2)
business days notice prior to each Floating Rate
Payer Payment Date for each Calculation Period
to The Bank of New York if the aggregate
Certificate Principal
M2-1
Balance of Class 2-A Certificates is less than
the Schedule I attached hereto
Trade Date: October 5, 2007
Effective Date: October 10, 2007
Termination Date: February 25, 2014, subject to adjustment in
accordance with the Modified Following Business
Day Convention.
FIXED AMOUNTS
Fixed Amount Payer: Party B has directed Xxxxxxx Xxxxx Mortgage
Lending, Inc. to make payment of the Fixed
Payment Amount on its behalf.
Fixed Amount: USD [_]
Fixed Amount Payer
Payment Date: October 10, 2007
FLOATING AMOUNTS
Floating Rate Payer: Party A
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Ceiling 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 the Ceiling Rate then the Floating
Rate Option for such Calculation Period shall be
deemed equal to the Ceiling Rate.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on October
25, 2007 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 one (1)
Business Day preceding each Floating Rate Payer
Period End Date.
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days for Payments
M2-2
By both parties: New York and Illinois
Calculation Agent: Party A
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.
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating Agency rates
the Certificates, such terms refer to each Rating Agency and its criteria
separately rather than collectively.
"RATING AGENCY" .means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc., or
Derivative Fitch Ltd., or any subsidiary, or successor thereof.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING RATINGS",
and "DISQUALIFYING RATINGS" have the meanings assigned in Part 5(i)(i).
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
DEFINITIONS INCORPORATED BY REFERENCE. Capitalized terms used in this Agreement
that are not defined herein and are defined in the Pooling and Servicing
Agreementhave the meanings assigned therein. In the event of any inconsistency
between the terms of this Agreement and the terms of the Pooling and Servicing
Agreement, this Agreement will govern.
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" in relation to Party A or Party B shall mean: none.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(c) APPLICABILITY. The following provisions apply or do not apply to the
parties as specified below:
(i) Section 5(a)(i) (FAILURE TO PAY OR DELIVER):
(A) will apply to Party A; and
(B) will apply to Party B.
(ii) Section 5(a)(ii) (BREACH OF AGREEMENT):
(A) will apply to Party A; and
(B) will not apply to Party B.
(iii) Section 5(a)(iii) (CREDIT SUPPORT DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B;
provided, that, with respect to Moody's Limited Qualifying Ratings and
Moody's Disqualifying Ratings, (x) this will apply only to Moody's
Disqualifying Ratings that have continued for at least 30 Local
Business Days, and (y) at least one Qualified
M2-3
Transferee has made an offer which remains capable of becoming legally
binding upon acceptance to enter into a Permitted Transfer or other
Replacement Transaction.
(iv) Section 5(a)(iv) (MISREPRESENTATION):
(A) will apply to Party A; and
(B) will not apply to Party B.
(v) Section 5(a)(v) (DEFAULT UNDER SPECIFIED TRANSACTION):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(vi) Section 5(a)(vi) (CROSS DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B.
For the purposes of Section 5(a)(vi):
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section
14, except that it shall not include indebtedness in respect of
deposits received.
"THRESHOLD AMOUNT" means, 3% of consolidated shareholders equity of
Party A (or any guarantor under a Qualified Guaranty) and its
subsidiaries determined in accordance with generally accepted
accounting principles in the jurisdiction of its organization
consistently applied as of the last day of the fiscal year ended
immediately prior to the occurrence or existence of an event for which
a Threshold Amount is applicable under Section 5(a)(vi).
(vii) Section 5(a)(vii) (BANKRUPTCY):
(A) will apply to Party A; and
(B) will not apply to Party B with respect to subclauses (2), (4)
(but only if the proceeding or petition is instituted or
presented by Party A or its affiliates), (7), (8) (but subclause
(8) will not apply to Party B only to the extent that subclauses
(2), (4) and (7) do not apply to Party B) and (9) of Section
5(a)(vii), and the remaining provisions of Section 5(a)(vii) will
apply to Party B; and in subclause (6) the words "trustee" and
"custodian" will not include the Trustee and the words "seeks or"
will be deleted.
(viii) Section 5(a)(viii) (MERGER WITHOUT ASSUMPTION):
(A) will apply to Party A; and
(B) will apply to Party B.
(ix) Section 5(b)(i) (ILLEGALITY):
(A) will apply to Party A; and
(B) will apply to Party B.
(x) Section 5(b)(ii) (TAX EVENT):
(A) will apply to Party A; and
(B) will apply to Party B;
provided that the words "(x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y)" shall be deleted.
(xi) Section 5(b)(iii) (TAX EVENT UPON MERGER):
(A) will apply to Party A; and
(B) will apply to Party B,
M2-4
provided, that Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event upon Merger in respect of
which it is the Affected Party.
(xii) Section 5(b)(iv) (CREDIT EVENT UPON MERGER):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(xiii) Section 5(b)(v) (ADDITIONAL TERMINATION EVENT):
(A) will apply to Party A with respect to Part 1(g)(iv) and (v); and
(B) will apply to Party B with respect to Parts 1(g)(i), (ii), and
(iii).
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply. For such purpose, if Party A is the
Affected Party in respect of an Additional Termination Event or a Tax Event Upon
Merger or the Defaulting Party in respect of any Event of Default (but not, in
any case, in respect of a Termination Event arising from an Illegality or Tax
Event), the following provisions shall apply:
(i) The definitions of "Market Quotation" and "Settlement Amount" are
amended in their entirety to read as follows:
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, an offer capable when made of becoming legally binding
upon acceptance made by a Qualified Transferee for an amount that
would be paid to Party B (expressed as a negative number) or by Party
B (expressed as a positive number) in consideration of an agreement
between Party B and such Qualified Transferee to enter into a
transaction with commercial terms substantially the same as and are,
in all material respects, no less beneficial for Party B than, those
of this Agreement (save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions) (which shall be
determined by Party B, acting in a commercially reasonable manner),
that would have the effect of preserving the economic equivalent for
Party B of any payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date (such
transaction, a "REPLACEMENT TRANSACTION"). For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of
Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date,
have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included.
"SETTLEMENT AMOUNT" means, with respect to any Early Termination Date:
(1) if, on or prior to such Early Termination Date, a Market Quotation
for the relevant Terminated Transaction or group of Terminated
Transactions is accepted by Party B so as to become legally binding:
the Termination Currency Equivalent of the amount (whether
positive or negative) of such Market Quotation;
(2) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions
has been accepted by Party B so as to become legally binding and one
or more Market Quotations have been communicated to Party B and remain
capable of becoming legally binding upon acceptance by Party B:
the Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market Quotations
M2-5
(for the avoidance of doubt, (x) a Market Quotation
expressed as a negative number is lower than a Market
Quotation expressed as a positive number and (y) the lower
of two Market Quotations expressed as negative numbers is
the one with the largest absolute value); or
(3) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding and no Market
Quotations have been communicated to Party B and remain capable of
becoming legally binding upon acceptance by Party B:
Party B's Loss (whether positive or negative and without
reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions."
(ii) At any time on or before the Early Termination Date at which two or
more Market Quotations remain capable of becoming legally binding upon
acceptance, Party B shall be entitled to accept only the lowest of such
Market Quotations. (For the avoidance of doubt, (i) a Market Quotation
expressed as a negative number is lower than a Market Quotation expressed
as a positive number and (ii) the lower of two Market Quotations expressed
as negative numbers is the one with the largest absolute value.)
(iii) if Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Early
Termination Date.
(iv) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
shall be deleted in its entirety and replaced with the following:
"SECOND METHOD AND MARKET QUOTATION. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal to
the absolute value of the Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts owing to Party A
and (3) Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B, Provided that, (i)
the amounts payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) and (ii) notwithstanding any other
provision of this Agreement, any amount payable by Party A under (3)
shall not be netted-off against any amount payable by Party B under
(1)."
(f) "TERMINATION CURRENCY" means United States Dollars.
(g) "ADDITIONAL TERMINATION EVENT" will apply. The following shall constitute
Additional Termination Events, and the party specified shall be the Affected
Party with respect thereto:--
(i) TERMINATION OF TRUST FUND. The Trust, Supplemental Interest Trust or
Trust Fund shall be terminated pursuant to any provision of the Pooling and
Servicing Agreement (including, without limitation, by exercise of the
option to purchase and giving of notice under Sections 9.01 and 10.01 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 and the Supplemental Interest Trust or Trust Fund is
terminated and final payment is made in respect of the Certificates. Party
B shall be the sole Affected Party. However, each of Party A and Party B
may designate an Early Termination Date in respect of this Additional
Termination Event.
(ii) INABILITY TO PAY CERTIFICATES. The Trust is unable to pay or fails or
admits in writing its inability to pay (i) on any Distribution Date, any
Current Interest with respect to the Class A Certificates or (ii) by the
Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date, [the ultimate payment of principal with
respect to the Class A Certificates, in either case to the extent required
pursuant to the terms of the Pooling and Servicing Agreement to be paid to
the Class A Certificates. Party B shall be the sole Affected Party.
(iii) AMENDMENT OF POOLING AND SERVICING AGREEMENT. The amendment of the
Pooling and Servicing Agreement in a manner which could have a material
adverse effect on Party A without first obtaining the prior written consent
of Party A (such consent not to be unreasonably
M2-6
withheld), where such consent is required under the Pooling and Servicing
Agreement. Party B shall be the sole Affected Party.
(iv) RATINGS DOWNGRADE. Party A or any guarantor under a Qualified Guaranty
(1) has Limited Qualifying Ratings or Disqualifying Ratings, and Party A
fails to take the actions provided in Part 5(i)(ii)(Posting of Collateral),
within the time periods set out therein, or (2) has Disqualifying Ratings
and Party A fails to take the actions provided in Part
5(i)(iii)(Replacement or Guaranty), within the time periods set out
therein;
provided, that, with respect to Xxxxx'x Disqualifying Ratings, (1) such
failure to comply with Part 5(i)(ii) will be treated as an Event of Default
subject to the provisions of Part 1(c)(iii), and not as an Additional
Termination Event, and (2) an Additional Termination Event with respect to
Xxxxx'x will not be constituted with respect to Part 5(i)(iii) unless and
until at least one Qualified Transferee has made an offer which remains
capable of becoming legally binding upon acceptance to enter into a
Permitted Transfer or other Replacement Transaction.
Party A shall be the sole Affected Party.
(v) REGULATION AB. Party A shall fail to comply with the provisions of Part
5 (j) within the time provided for therein. Party A shall be the sole
Affected Party.
Party B shall not effectively designate an Early Termination Date unless and
until it has given prior written notice thereof to each Rating Agency.
Part 2. TAX REPRESENTATIONS AND CERTAIN TAX-RELATED PROVISIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), Party A and
Party B 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), Party A and Party B
make the following representations.
(i) The following representation will apply to Party A:
(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 ("TREAS.
REG.")) 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 (z) its U.S. taxpayer identification number is
000000000.
(ii) The following representation will apply to Party B:
None.
(c) ADDITIONAL AMOUNTS NOT PAYABLE BY PARTY B. Party B shall not be required to
pay any additional amounts pursuant to Section 2(d)(i)(4).
M2-7
(d) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14 is
amended in its entirety to read as follows:
"INDEMNIFIABLE TAX" means in relation to payments by Party A any Tax and in
relation to payments by Party B no Tax.
Part 3. AGREEMENT TO DELIVER DOCUMENTS. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE DATE BY WHICH TO BE DELIVERED
---------------- ------------------------------------------- -------------------------------------------
Party A and Party B A correct, complete and executed Internal (i) Prior to the first scheduled
Revenue Service Form W-9, with respect to Distribution Date; (ii) in the case of a
Party A, and X-0, X-0XXX, X-0XXX, or U.S. Internal Revenue Service Form W-8ECI,
W-8IMY, with appropriate attachments, as W-8IMY, and W-8BEN that does not include a
applicable, with respect to Party B, or any U.S. taxpayer identification number in line
other or successor form, in each case that 6, before December 31 of each third
establishes an exemption from deduction or succeeding calendar year, (iii) promptly
withholding obligations, and any other upon reasonable demand by the other party;
document reasonably requested to allow the and (iv) promptly upon learning that any
other party to make payments under this form previously provided by to the other
Agreement without any deduction or party has become obsolete or incorrect.
withholding for or on the account of any
tax.
(b) Other documents to be delivered are:
PARTY REQUIRED TO DATE BY WHICH TO BE COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE DELIVERED 3(D) REPRESENTATION
----------------- ---------------------------------------------- ----------------------- -------------------
Party A 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.
With respect to (i) Yes
Party B (i) a copy of the executed Pooling and upon the execution and
Servicing Agreement, (ii) an incumbency delivery of the Pooling
certificate verifying the true signatures and and Servicing
authority of the person or persons signing Agreement, and with
this Agreement on behalf of Party B , and respect to (ii) and
(iii) a certified copy of the authorizing (iii) upon the
resolution (or equivalent authorizing execution and delivery
documentation) of Trustee which sets forth the of this 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.
Party A and A legal opinion as to enforceability of this Upon the execution and No
Party B Agreement and any Confirmation evidencing a delivery of this
Transaction hereunder. Agreement and such
Confirmationf
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
M2-8
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A:
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)
A copy of any notice or other communication with respect to Sections 5
or 6 should also be sent to the addresses set out below:
The Bank of New York
Legal Department
Xxx Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY B:
Global Securities and Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xx.
4 World Financial Center, 10th floor
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(For all purposes.)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:-- not applicable.
Party B appoints as its Process Agent:-- not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is a Multibranch Party and will enter into each Transaction
only through the following Office:- New York (for all Transactions).
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
M2-9
(f) "CREDIT SUPPORT DOCUMENT" Credit Support Document means in relation to:--
Party A: The Credit Support Annex hereto and any Qualified Guaranty.
Party B: Not applicable.
(g) "CREDIT SUPPORT PROVIDER" means in relation to:
Party A: The guarantor under any Qualified Guaranty.
Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) NETTING OF PAYMENTS; MODIFICATION OF SECTION 2(A)(III)(1). Subparagraph (ii)
of Section 2(c) will apply. Section 2(a)(iii)(1) is amended by deleting "or
Potential Event of Default".
(j) "AFFILIATE" will have the meaning specified in Section 14, provided, that,
Party B shall not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii) hereof.
(k) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding after
Section 3(f) the following subsections:
"(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) 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
(ii) 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 COMMODITY EXCHANGE ACT. (1) It is an "eligible contract
participant" within the meaning of Section 1a(12) of the Commodity Exchange
Act, as amended; (2) this Agreement and each Transaction is subject to
individual negotiation by such party; and (3) 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) SWAP AGREEMENT. Each Transaction is a "swap agreement" as defined in 12
U.S.C. Section 1821(e)(8)(D)(vi) and a "covered swap agreement" as defined
in the Commodity Exchange Act (7 U.S.C. Section 27(d)(1))."
(l) 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.
M2-10
Part 5. OTHER PROVISIONS.
(a) 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.
(b) 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.
(c) SET-OFF. All payments under this Agreement shall be made without set-off or
counterclaim, except as provided in Section 2(c), Section 6 or the provisions
hereof relating to Market Quotation and Loss, or Paragraph 8 of the Credit
Support Annex. Section 6(e) is amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off." For the avoidance of
doubt, if more than one Transaction is entered into under this Agreement,
nothing herein is intended to prevent the determination of a Settlement Amount
with respect to all such Transactions pursuant to Section 6 (as modified
hereby).
(d) FAILURE TO PAY OR DELIVER. Section 5(a)(i) is hereby amended by replacing
the word "third" by the word "second" in the third line thereof.
(e) NON-RECOURSE. Notwithstanding any provision herein or in this Agreement to
the contrary, the obligations of the Trust hereunder are limited recourse
obligations of the Trust, payable solely from amounts on deposit in the Corridor
Account . In the event that the Corridor Account and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the realization of
the Corridor Account and the distribution of the proceeds thereof in accordance
with the Pooling and Servicing Agreement, any claims against or obligations of
the Trust under this Agreement or any confirmation hereunder still outstanding
shall be extinguished and thereafter not revive. This provision shall survive
the termination of this Agreement.
(f) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. Party A shall not
institute against or cause any other person to institute against, or join any
other person in instituting against Party B, the Depositor or the Trust, 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 termination of this Agreement.
(g) TRANSFER, ASSIGNMENT. Notwithstanding the provisions of Sections 6(b)(ii)
and 7, no novation, assignment or transfer of any Transaction shall be permitted
by either party, unless the Rating Agency Condition with respect to each Rating
Agency is satisfied with respect thereto, except that Party A may, if each
Rating Agency and the non-assigning party has received prior written notice
thereof (1) transfer all or any part of its interest in any amount payable to it
if Party B is a Defaulting Party under Section 6(e) or (2) effect a Permitted
Transfer of this Agreement to any other entity at any time (A) Party A or any
guarantor under a Qualified Guaranty has Limited Qualifying Ratings or
Disqualifying Ratings, (B) pursuant to Section 6(b)(ii), (C) pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity, (D) to another of its
offices or branches; or (E) to an Affiliate. The consent of Party B shall not be
required for a novation, assignment or transfer by Party A in accordance with
clauses (1) and (2) of the preceding sentence and Party B shall take all steps
reasonably requested by Party A (at the expense of Party A) to effect a
Permitted Transfer. A "PERMITTED TRANSFER" means a novation or assignment to or
entry into another form of Replacement Transaction pursuant to which a Qualified
Transferee acquires and assumes or enters into a Replacement Transaction by a
written instrument in respect of all the Transactions and the rights,
liabilities, duties and obligations of Party A hereunder and with respect to
which (1) there is no adverse effect on netting or set-off rights, (2) neither
Party A nor the transferee will be required to withhold or deduct on account of
any Tax from any payments under this Agreement in excess of what would have been
required to be withheld
M2-11
or deducted in the absence of such transfer, (3) an Event of Default or
Termination Event would not occur as a result, and (4) (x) with respect to any
Rating Agency, the terms of the Transactions are not modified other than
parties, effective date of said transfer, and tax payee representations of Party
A (and in such case, it shall not be a condition of such Replacement Transaction
that it preserve for Party B the economic equivalent of all payment and delivery
obligations hereunder and be in all material respects no less beneficial for
Party B than those of the Transactions), or (y) with respect to Xxxxx'x, the
terms of the Transactions are modified to a greater extent than provided in (x)
but the definition of Replacement Transaction is otherwise complied with.
(h) AMENDMENT. Notwithstanding the provisions of Section 9(b), each amendment,
modification or waiver in respect of this Agreement shall be subject to the
Rating Agency Condition with respect to each Rating Agency.
(i) RATINGS DOWNGRADE.
(i) DEFINITIONS. For purposes of each Transaction:
(A) "RATING AGENCY CONDITION" means, with respect to any action taken
or to be taken hereunder, a condition that is satisfied when the
relevant Rating Agency has confirmed in writing to the Trustee that
such action will not result in withdrawal, reduction or other adverse
action with respect to any then-current rating by the Rating Agency of
the Certificates.
(B) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any
guarantor under a Qualified Guaranty, in the cases when such debt has
both short-term and long-term debt ratings and when such debt has only
long-term ratings, will be "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS" and "DISQUALIFYING RATINGS", as identified below:
M2-12
RATINGS OF PARTY A OR GUARANTOR
UNDER A QUALIFIED GUARANTY:
-----------------------------------------
HAS LONG-TERM AND HAS ONLY LONG-TERM
RATING AGENCY: SHORT-TERM RATINGS RATINGS
-------------- -------------------- ------------------
"QUALIFYING RATINGS":
XXXXX'X: P-1 and A2 or above A1 or above
S&P: A-1 or above A+ or above
FITCH: F1 and A or above A or above
"LIMITED QUALIFYING RATINGS":
XXXXX'X: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a Qualified Guaranty is a A-2 A, A- or BBB+
Financial Institution:
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS":*
XXXXX'X: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a Qualified Guaranty is a A-3 or below BBB or below
Financial Institution:(Financial Institution)
If neither Party A nor guarantor under a Qualified Guaranty is A-2 or below A or below
a Financial Institution:(Other)
FITCH: F3 or BBB or below BBB or below
* The withdrawal by Xxxxx'x of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
(C) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance
company, structured investment vehicle or derivative product company.
(D) "QUALIFIED TRANSFEREE" means a transferee of a novation or
assignment or a party (other than Party B) that enters into another
form of Replacement Transaction that is a Reference Market-maker
("dealer" in the definition thereof meaning a "dealer in notional
principal contracts" as defined in Treas. Reg. Section 1.1001-4) that
has Qualifying Ratings or Limited Qualifying Ratings assigned by each
Rating Agency, or whose present and future obligations owing to Party
B are guaranteed pursuant to a Qualified Guaranty.
(E) "QUALIFIED GUARANTY" means an unconditional and irrevocable
guaranty of payment (and not of collection) and the performance of the
other obligations of Party A (or a Qualified Transferee, as
applicable) hereunder by a third party that has Qualifying Ratings or
Limited Qualifying Ratings assigned by each Rating Agency ("QUALIFIED
GUARANTOR") in a form that satisfies the S&P Rating Condition and that
provides, inter alia, that payment thereunder shall be made as
provided and on the conditions set forth in Section 2(d) as modified
hereunder (substituting references to Party A as "X" with the
guarantor as "X" and "this Agreement" with such guaranty,
respectively) (or, in lieu of such provisions relating to tax, a law
firm has given a legal opinion confirming that none of the guarantor's
payments to Party B under such guaranty will be subject to withholding
for Tax).
(ii) POSTING OF COLLATERAL. If Party A or any guarantor under a Qualified
Guaranty is assigned Limited Qualifying Ratings or Disqualifying Ratings by
a Rating Agency, then, within, with respect to:
M2-13
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or if such ratings exist from the time Party A becomes a party
hereto or the guarantor under a Qualified Guaranty becomes such guarantor,
from such time), and for so long as such Limited Qualifying Ratings or
Disqualifying Ratings continue, Party A shall, at its own expense, post
collateral in accordance with the Credit Support Annex.
(iii) REPLACEMENT OR GUARANTY. If Party A or any guarantor under a
Qualified Guaranty is assigned Disqualifying Ratings by a Rating Agency,
then, within, with respect to:
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: sixty (60) calendar days
(3) FITCH: thirty (30) calendar days
thereafter, Party A shall, at its own expense, (x) novate, assign or
transfer the Transactions to or replace the Transactions with Replacement
Transactions with a Qualified Transferee, or (y) obtain a Qualified
Guaranty.
(j) REGULATION AB.
(a) 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
Party A has not, within 30 days after receipt of a Swap Disclosure
Request complied with the provisions set forth below in this Part 5(j)
(provided that if the significance percentage reaches 10% after a Swap
Disclosure Request has been made to Party A, Party A must comply with
the provisions set forth below in this Part 5(j) within 10 calendar
days of Party A being informed of the significance percentage reaching
10%), then an Additional Termination Event shall have occurred with
respect to Party A and Party A shall be the sole Affected Party with
respect to such Additional Termination Event.
(b) Party A 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 Party A or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other derivative
contracts between Party A or its group of affiliated entities, if
applicable, and the Party B, as calculated from time to time in
accordance with Item 1115 of Regulation AB.
(c) If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to eight
(8) percent, then the Depositor may request on a Business Day after
the date of such determination from Party A 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 Party B or the Depositor shall
provide Party A with the calculations and any other information
reasonably requested by Party A 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 Party A's option,
either the information set forth in Item 1115(b)(1) or Item 1115(b)(2)
of Regulation AB.
(d) Upon the occurrence of a Swap Disclosure Request, Party A, at its
own expense, shall (x) provide the Depositor with the Swap Financial
Disclosure in an Xxxxx-compatible format, or (y) subject to Rating
Agency Condition with respect to each Rating Agency, secure another
entity to replace Party A 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.
M2-14
(e) Party A's obligation to comply with this Paragraph 4(9) shall be
suspended as of January 1, 2008 unless, at any time, Party A receives
notification from the Depositor or the Party B that the Trust Fund's
obligation to file periodic reports under the Exchange Act shall
continue; provided, however, that such obligations shall not be
suspended in respect of any Exchange Act Report or amendment to an
Exchange Act Report in such fiscal year which relates to any fiscal
year in which the Trust Fund was subject to the reporting requirements
of the Exchange Act. This obligation shall continue to be suspended
unless the Depositor or the Party B notifies Party A that the Trust
Fund's obligations to file reports under the Exchange Act has resumed.
(k) TRUSTEE'S CAPACITY. It is expressly understood and agreed by the
parties hereto that, insofar as this Agreement and any confirmation
evidencing a Transaction hereunder is executed by LaSalle Bank National
Association, (i) this Agreement and such confirmation are executed and
delivered by LaSalle Bank National Association, not in its individual
capacity but solely as Trustee of the Trust pursuant to the Pooling and
Servicing Agreement in the exercise of the powers and authority conferred
upon and vested in it thereunder, and pursuant to instruction set forth
therein, (ii) each of the representations, undertakings and agreements
herein or therein made on behalf of the Trust is made and intended not as a
personal representation, undertaking or agreement of LaSalle Bank National
Association but is made and intended for the purpose of binding only the
Trust, 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 Agreement or any such confirmation
(l) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, as Trustee
of the Trust, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this Agreement and each confirmation evidencing a
Transaction hereunder as Trustee on behalf of the Trust.
(m) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6,
if Party B has satisfied its payment obligations under Section 2(a)(i), and
shall, at the time, have no future payment or delivery obligation, whether
absolute or contingent, then unless Party A is required pursuant to
appropriate proceedings to return to Party B or otherwise returns to Party
B upon demand of Party B any portion of such payment, (a) the occurrence of
an event described in Section 5(a) with respect to Party B shall not
constitute an Event of Default or Potential Event of Default with respect
to Party B as the Defaulting Party and (b) Party A shall be entitled to
designate an Early Termination Date pursuant to Section 6 only as a result
of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) with respect to Party A as the Affected Party or Section 5(b)(iii)
with respect to Party A as the Burdened Party or Part 1(g) with Party B as
the Affected Party.
(n) 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 Party A. MLML further agrees to provide notice to
Party A upon any remittance to the Trustee.
M2-15
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
PAYMENTS TO Party A:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #000000000
Account #000-0000-000
Reference: Interest Rate Swap
PAYMENTS TO PARTY B:
LaSalle Bank
ABA# 000000000
LaSalle CHGO/CTR/BNF:/LASALLE TRUST
A/C# 725059.2
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.
M2-16
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
A. BY:
-------------------------------
Name:
Title:
M2-17
The Party B, acting through its duly authorized signatory, hereby agrees
to, accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR THE XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
B. BY:
-------------------------------
Name:
Title:
Solely with respect to Part 5(n)
III. XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
-------------------------------
Name:
Title:
M2-18
SCHEDULE I
(all such dates subject adjustment in accordance with the Modified Following
Business Day Convention)
Notional
From and To but Amount Cap Ceiling
including excluding (in USD) Rate (%) Rate (%)
--------- --------- ----------- -------- --------
10/10/07 10/25/07 330,750,000 9.490 9.490
10/25/07 11/25/07 327,975,502 6.803 9.490
11/25/07 12/25/07 324,607,900 7.063 9.490
12/25/07 01/25/08 320,652,335 6.803 9.490
01/25/08 02/25/08 316,112,386 6.803 9.490
02/25/08 03/25/08 310,996,312 7.341 9.490
03/25/08 04/25/08 305,313,811 6.802 9.490
04/25/08 05/25/08 299,077,955 7.063 9.490
05/25/08 06/25/08 292,306,706 6.802 9.490
06/25/08 07/25/08 285,096,717 7.062 9.490
07/25/08 08/25/08 277,555,543 6.802 9.490
08/25/08 09/25/08 269,956,596 6.802 9.490
09/25/08 10/25/08 0 0.000 0.000
10/25/08 11/25/08 0 0.000 0.000
11/25/08 12/25/08 0 0.000 0.000
12/25/08 01/25/09 0 0.000 0.000
01/25/09 02/25/09 0 0.000 0.000
02/25/09 03/25/09 0 0.000 0.000
03/25/09 04/25/09 0 0.000 0.000
04/25/09 05/25/09 0 0.000 0.000
05/25/09 06/25/09 0 0.000 0.000
06/25/09 07/25/09 0 0.000 0.000
07/25/09 08/25/09 0 0.000 0.000
08/25/09 09/25/09 0 0.000 0.000
09/25/09 10/25/09 0 0.000 0.000
10/25/09 11/25/09 0 0.000 0.000
11/25/09 12/25/09 0 0.000 0.000
12/25/09 01/25/10 0 0.000 0.000
01/25/10 02/25/10 0 0.000 0.000
02/25/10 03/25/10 0 0.000 0.000
03/25/10 04/25/10 0 0.000 0.000
04/25/10 05/25/10 0 0.000 0.000
05/25/10 06/25/10 0 0.000 0.000
06/25/10 07/25/10 0 0.000 0.000
07/25/10 08/25/10 0 0.000 0.000
08/25/10 09/25/10 0 0.000 0.000
09/25/10 10/25/10 0 0.000 0.000
10/25/10 11/25/10 0 0.000 0.000
11/25/10 12/25/10 0 0.000 0.000
12/25/10 01/25/11 0 0.000 0.000
01/25/11 02/25/11 0 0.000 0.000
02/25/11 03/25/11 0 0.000 0.000
M2-19
03/25/11 04/25/11 0 0.000 0.000
04/25/11 05/25/11 0 0.000 0.000
05/25/11 06/25/11 0 0.000 0.000
06/25/11 07/25/11 0 0.000 0.000
07/25/11 08/25/11 76,096,085 10.742 12.000
08/25/11 09/25/11 74,372,619 10.515 12.000
09/25/11 10/25/11 72,688,608 10.528 12.000
10/25/11 11/25/11 71,043,145 10.100 12.000
11/25/11 12/25/11 69,435,342 10.155 12.000
12/25/11 01/25/12 67,864,335 9.739 12.000
01/25/12 02/25/12 66,329,276 9.565 12.000
02/25/12 03/25/12 64,829,340 9.915 12.000
03/25/12 04/25/12 63,363,718 9.251 12.000
04/25/12 05/25/12 61,931,623 9.349 12.000
05/25/12 06/25/12 60,520,896 8.958 12.000
06/25/12 07/25/12 58,316,013 9.097 12.000
07/25/12 08/25/12 55,596,711 9.271 12.000
08/25/12 09/25/12 53,011,939 9.813 12.000
09/25/12 10/25/12 50,564,192 9.363 12.000
10/25/12 11/25/12 48,253,022 9.050 12.000
11/25/12 12/25/12 46,680,972 9.341 12.000
12/25/12 01/25/13 45,631,464 9.043 12.000
01/25/13 02/25/13 44,611,169 9.431 12.000
02/25/13 03/25/13 43,614,972 10.766 12.000
03/25/13 04/25/13 42,642,041 9.725 12.000
04/25/13 05/25/13 41,691,136 10.047 12.000
05/25/13 06/25/13 40,761,755 9.721 12.000
06/25/13 07/25/13 39,853,409 10.048 12.000
07/25/13 08/25/13 38,965,633 10.108 12.000
08/25/13 09/25/13 38,098,635 10.398 12.000
09/25/13 10/25/13 37,251,754 10.744 12.000
10/25/13 11/25/13 36,424,009 10.394 12.000
11/25/13 12/25/13 35,614,964 10.738 12.000
12/25/13 01/25/14 34,824,194 10.393 12.000
01/25/14 02/25/14 34,051,297 10.773 12.000
M2-20
Exhibit A to Confirmation No. 39956
[Credit Support Annex to follow this page]
M2-21
EXHIBIT M-3
FORM OF SUBORDINATE CERTIFICATE CAP CORRIDOR CONTRACT
(THE BANK OF NEW YORK LOGO)
Dated: October 10, 2007
RATE CAP TRANSACTION
RE: BNY REFERENCE NO. 39957
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 ("PARTY A"), a
trust company duly organized and existing under the laws of the State of New
York, and the Trust relating to the Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan
Trust, Series 2007-5 (the "PARTY B"), 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 September 1, 2007, among
Xxxxxxx Xxxxx Mortgage Investments, Inc., as Depositor, Home Loan Services,
Inc., 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"). Any reference to a "Swap Transaction" in
the Definitions is deemed to be a reference to a "Transaction" for purposes of
this Agreement, and any reference to a "Transaction" in this Agreement is deemed
to be a reference to a "Swap Transaction" for purposes of the Definitions. 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. For the avoidance of doubt, the Transaction
described herein shall be the sole Transaction governed by such ISDA Form Master
Agreement. Except as otherwise specified, references herein to Sections shall be
to Sections of 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 number 39955 and 39956. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the 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
lesser of: (i) the amount set forth on Schedule
I attached hereto for such Calculation Period
and (ii) the aggregate Certificate Principal
Balance of the Subordinate Certificates (as
defined in the Pooling and Servicing Agreement)
for such Floating Rate Payer Payment Date.
The Trustee under the Pooling and Servicing
Agreement shall provide at least two (2)
business days notice prior to each Floating Rate
Payer Payment Date for each Calculation Period
to
X0-0
Xxx Xxxx xx Xxx Xxxx if the aggregate
Certificate Principal Balance of Subordinate
Certificates is less than the Schedule I
attached hereto
Trade Date: October 5, 2007
Effective Date: October 10, 2007
Termination Date: June 25, 2013, subject to adjustment in
accordance with the Modified Following Business
Day Convention.
FIXED AMOUNTS
Fixed Amount Payer: Party B has directed Xxxxxxx Xxxxx Mortgage
Lending, Inc. to make payment of the Fixed
Payment Amount on its behalf.
Fixed Amount: USD [_]
Fixed Amount Payer
Payment Date: October 10, 2007
FLOATING AMOUNTS
Floating Rate Payer: Party A
Cap Rate: For each Calculation Period, as set forth for
such period on Schedule I attached hereto.
Ceiling 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 the Ceiling Rate then the Floating
Rate Option for such Calculation Period shall be
deemed equal to the Ceiling Rate.
Designated Maturity: One month
Spread: Inapplicable
Floating Rate Payer
Period End Dates: The 25th day of each month, beginning on October
25, 2007 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 one (1)
Business Day preceding each Floating Rate Payer
Period End Date.
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
M3-2
Business Days for Payments
By both parties: New York and Illinois
Calculation Agent: Party A
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.
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating Agency rates
the Certificates, such terms refer to each Rating Agency and its criteria
separately rather than collectively.
"RATING AGENCY" .means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc., or
Derivative Fitch Ltd., or any subsidiary, or successor thereof.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING RATINGS",
and "DISQUALIFYING RATINGS" have the meanings assigned in Part 5(i)(i).
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
DEFINITIONS INCORPORATED BY REFERENCE. Capitalized terms used in this Agreement
that are not defined herein and are defined in the Pooling and Servicing
Agreement have the meanings assigned therein. In the event of any inconsistency
between the terms of this Agreement and the terms of the Pooling and Servicing
Agreement, this Agreement will govern.
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" in relation to Party A or Party B shall mean: none.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(c) APPLICABILITY. The following provisions apply or do not apply to the parties
as specified below:
(i) Section 5(a)(i) (FAILURE TO PAY OR DELIVER):
(A) will apply to Party A; and
(B) will apply to Party B.
(ii) Section 5(a)(ii) (BREACH OF AGREEMENT):
(A) will apply to Party A; and
(B) will not apply to Party B.
M3-3
(iii) Section 5(a)(iii) (CREDIT SUPPORT DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B;
provided, that, with respect to Moody's Limited Qualifying Ratings and
Moody's Disqualifying Ratings, (x) this will apply only to Moody's
Disqualifying Ratings that have continued for at least 30 Local
Business Days, and (y) at least one Qualified Transferee has made an
offer which remains capable of becoming legally binding upon
acceptance to enter into a Permitted Transfer or other Replacement
Transaction.
(iv) Section 5(a)(iv) (MISREPRESENTATION):
(A) will apply to Party A; and
(B) will not apply to Party B.
(v) Section 5(a)(v) (DEFAULT UNDER SPECIFIED TRANSACTION):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(vi) Section 5(a)(vi) (CROSS DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B.
For the purposes of Section 5(a)(vi):
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section
14, except that it shall not include indebtedness in respect of
deposits received.
"THRESHOLD AMOUNT" means, 3% of consolidated shareholders equity of
Party A (or any guarantor under a Qualified Guaranty) and its
subsidiaries determined in accordance with generally accepted
accounting principles in the jurisdiction of its organization
consistently applied as of the last day of the fiscal year ended
immediately prior to the occurrence or existence of an event for which
a Threshold Amount is applicable under Section 5(a)(vi).
(vii) Section 5(a)(vii) (BANKRUPTCY):
(A) will apply to Party A; and
(B) will not apply to Party B with respect to subclauses (2), (4) (but
only if the proceeding or petition is instituted or presented by Party
A or its affiliates), (7), (8) (but subclause (8) will not apply to
Party B only to the extent that subclauses (2), (4) and (7) do not
apply to Party B) and (9) of Section 5(a)(vii), and the remaining
provisions of Section 5(a)(vii) will apply to Party B; and in
subclause (6) the words "trustee" and "custodian" will not include the
Trustee and the words "seeks or" will be deleted.
(viii) Section 5(a)(viii) (MERGER WITHOUT ASSUMPTION):
(A) will apply to Party A; and
(B) will apply to Party B.
(ix) Section 5(b)(i) (ILLEGALITY):
(A) will apply to Party A; and
(B) will apply to Party B.
M3-4
(x) Section 5(b)(ii) (TAX EVENT):
(A) will apply to Party A; and
(B) will apply to Party B;
provided that the words "(x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y)" shall be deleted.
(xi) Section 5(b)(iii) (TAX EVENT UPON MERGER):
(A) will apply to Party A; and
(B) will apply to Party B,
provided, that Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event upon Merger in respect of
which it is the Affected Party.
(xii) Section 5(b)(iv) (CREDIT EVENT UPON MERGER):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(xiii) Section 5(b)(v) (ADDITIONAL TERMINATION EVENT):
(A) will apply to Party A with respect to Part 1(g)(iv) and (v); and
(B) will apply to Party B with respect to Parts 1(g)(i), (ii), and
(iii).
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply. For such purpose, if Party A is the
Affected Party in respect of an Additional Termination Event or a Tax Event Upon
Merger or the Defaulting Party in respect of any Event of Default (but not, in
any case, in respect of a Termination Event arising from an Illegality or Tax
Event), the following provisions shall apply:
(i) The definitions of "Market Quotation" and "Settlement Amount" are
amended in their entirety to read as follows:
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, an offer capable when made of becoming legally binding
upon acceptance made by a Qualified Transferee for an amount that
would be paid to Party B (expressed as a negative number) or by Party
B (expressed as a positive number) in consideration of an agreement
between Party B and such Qualified Transferee to enter into a
transaction with commercial terms substantially the same as and that
are, in all material respects, no less beneficial for Party B than,
those of this Agreement (save for the exclusion of provisions relating
to Transactions that are not Terminated Transactions) (which shall be
determined by Party B, acting in a commercially reasonable manner),
that would have the effect of preserving the economic equivalent for
Party B of any payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date (such
transaction, a "REPLACEMENT TRANSACTION"). For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of
Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date,
have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included.
"SETTLEMENT AMOUNT" means, with respect to any Early Termination Date:
M3-5
(1) if, on or prior to such Early Termination Date, a Market Quotation
for the relevant Terminated Transaction or group of Terminated
Transactions is accepted by Party B so as to become legally binding:
the Termination Currency Equivalent of the amount (whether
positive or negative) of such Market Quotation;
(2) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions
has been accepted by Party B so as to become legally binding and one
or more Market Quotations have been communicated to Party B and remain
capable of becoming legally binding upon acceptance by Party B:
the Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market Quotations
(for the avoidance of doubt, (x) a Market Quotation
expressed as a negative number is lower than a Market
Quotation expressed as a positive number and (y) the lower
of two Market Quotations expressed as negative numbers is
the one with the largest absolute value); or
(3) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding and no Market
Quotations have been communicated to Party B and remain capable of
becoming legally binding upon acceptance by Party B:
Party B's Loss (whether positive or negative and without
reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions."
(ii) At any time on or before the Early Termination Date at which two or
more Market Quotations remain capable of becoming legally binding upon
acceptance, Party B shall be entitled to accept only the lowest of such
Market Quotations. (For the avoidance of doubt, (i) a Market Quotation
expressed as a negative number is lower than a Market Quotation expressed
as a positive number and (ii) the lower of two Market Quotations expressed
as negative numbers is the one with the largest absolute value.)
(iii) if Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Early
Termination Date.
(iv) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
shall be deleted in its entirety and replaced with the following:
"SECOND METHOD AND MARKET QUOTATION. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal to
the absolute value of the Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts owing to Party A
and (3) Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B, Provided that, (i)
the amounts payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) and (ii) notwithstanding any other
provision of this Agreement, any amount payable by Party A under (3)
shall not be netted-off against any amount payable by Party B under
(1)."
(f) "TERMINATION CURRENCY" means United States Dollars.
(g) "ADDITIONAL TERMINATION EVENT" will apply. The following shall constitute
Additional Termination Events, and the party specified shall be the Affected
Party with respect thereto:--
(i) TERMINATION OF TRUST FUND. The Trust, Supplemental Interest Trust or
Trust Fund shall be terminated pursuant to any provision of the Pooling and
Servicing Agreement (including, without limitation, by exercise of the
option to purchase and giving of notice under Sections 9.01 and 10.01 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 and the Supplemental Interest Trust or Trust Fund is
terminated and final payment is made in respect of
M3-6
the Certificates. Party B shall be the sole Affected Party. However, each
of Party A and Party B may designate an Early Termination Date in respect
of this Additional Termination Event.
(ii) INABILITY TO PAY CERTIFICATES. The Trust is unable to pay or fails or
admits in writing its inability to pay (i) on any Distribution Date, any
Current Interest with respect to the Class A Certificates or (ii) by the
Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date, [the ultimate payment of principal with
respect to the Class A Certificates, in either case to the extent required
pursuant to the terms of the Pooling and Servicing Agreement to be paid to
the Class A Certificates. Party B shall be the sole Affected Party.
(iii) AMENDMENT OF POOLING AND SERVICING AGREEMENT. The amendment of the
Pooling and Servicing Agreement in a manner which could have a material
adverse effect on Party A without first obtaining the prior written consent
of Party A (such consent not to be unreasonably withheld), where such
consent is required under the Pooling and Servicing Agreement. Party B
shall be the sole Affected Party.
(iv) RATINGS DOWNGRADE. Party A or any guarantor under a Qualified Guaranty
(1) has Limited Qualifying Ratings or Disqualifying Ratings, and Party A
fails to take the actions provided in Part 5(i)(ii)(Posting of Collateral),
within the time periods set out therein, or (2) has Disqualifying Ratings
and Party A fails to take the actions provided in Part
5(i)(iii)(Replacement or Guaranty), within the time periods set out
therein;
provided, that, with respect to Xxxxx'x Disqualifying Ratings, (1) such
failure to comply with Part 5(i)(ii) will be treated as an Event of Default
subject to the provisions of Part 1(c)(iii), and not as an Additional
Termination Event, and (2) an Additional Termination Event with respect to
Xxxxx'x will not be constituted with respect to Part 5(i)(iii) unless and
until at least one Qualified Transferee has made an offer which remains
capable of becoming legally binding upon acceptance to enter into a
Permitted Transfer or other Replacement Transaction.
Party A shall be the sole Affected Party.
(v) REGULATION AB. Party A shall fail to comply with the provisions of Part
5 (j) within the time provided for therein. Party A shall be the sole
Affected Party.
Party B shall not effectively designate an Early Termination Date unless and
until it has given prior written notice thereof to each Rating Agency.
Part 2. TAX REPRESENTATIONS AND CERTAIN TAX-RELATED PROVISIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), Party A and
Party B 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), Party A and
Party B make the following representations.
(i) The following representation will apply to Party A:
M3-7
(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 ("TREAS.
REG.")) 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 (z) its U.S. taxpayer identification number is
000000000.
(ii) The following representation will apply to Party B:
None.
(c) ADDITIONAL AMOUNTS NOT PAYABLE BY PARTY B. Party B shall not be required to
pay any additional amounts pursuant to Section 2(d)(i)(4).
(d) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14 is
amended in its entirety to read as follows:
"INDEMNIFIABLE TAX" means in relation to payments by Party A any Tax and in
relation to payments by Party B no Tax.
Part 3. AGREEMENT TO DELIVER DOCUMENTS. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE DATE BY WHICH TO BE DELIVERED
----------------- --------------------------------------------- ----------------------------------------
Party A and Party B A correct, complete and executed Internal (i) Prior to the first scheduled
Revenue Service Form W-9, with respect to Distribution Date; (ii) in the case of a
Party A, and X-0, X-0XXX, X-0XXX, or W-8IMY, U.S. Internal Revenue Service Form
with appropriate attachments, as applicable, W-8ECI, W-8IMY, and W-8BEN that does not
with respect to Party B, or any other or include a U.S. taxpayer identification
successor form, in each case that establishes number in line 6, before December 31 of
an exemption from deduction or withholding each third succeeding calendar year,
obligations, and any other document (iii) promptly upon reasonable demand by
reasonably requested to allow the other party the other party; and (iv) promptly upon
to make payments under this Agreement without learning that any form previously
any deduction or withholding for or on the provided by to the other party has
account of any tax. become obsolete or incorrect.
(b) Other documents to be delivered are:
PARTY REQUIRED TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/ CERTIFICATE DATE BY WHICH TO BE DELIVERED 3(D) REPRESENTATION
----------------- ------------------------------------ -------------------------------- -------------------
Party A A certificate of an authorized Upon the execution and delivery Yes
officer of the party, as to the of this Agreement
incumbency and authority of the
respective officers of the party
signing this Agreement, any relevant
Credit Support Document, or any
Confirmation, as the case may be.
Party B (i) a copy of the executed Pooling With respect to (i) upon the Yes
and Servicing Agreement, (ii) an execution and delivery of the
incumbency certificate verifying the Pooling and Servicing Agreement,
true signatures and authority of the and with respect to (ii) and
person or persons signing this (iii) upon the execution and
Agreement on behalf of Party B , and delivery of this
(iii) a certified copy of the
authorizing resolution (or
equivalent authorizing
documentation) of Trustee which sets
forth the authority of each
signatory to the Confirmation
signing on its behalf and the
authority of such party to enter
into
M3-8
Transactions contemplated and Agreement
performance of its obligations
hereunder.
Party A and Party A legal opinion as to enforceability Upon the execution and delivery No
B of this Agreement and any of this Agreement and such
Confirmation evidencing a Confirmation
Transaction hereunder.
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A:
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)
A copy of any notice or other communication with respect to Sections 5 or 6
should also be sent to the addresses set out below:
The Bank of New York
Legal Department
Xxx Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY B:
Global Securities and Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xx.
4 World Financial Center, 10th floor
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(For all purposes.)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:-- not applicable.
M3-9
Party B appoints as its Process Agent:-- not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is a Multibranch Party and will enter into each Transaction only
through the following Office:- New York (for all Transactions).
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) "CREDIT SUPPORT DOCUMENT" Credit Support Document means in relation to:--
Party A: The Credit Support Annex hereto and any Qualified Guaranty.
Party B: Not applicable.
(g) "CREDIT SUPPORT PROVIDER" means in relation to:
Party A: The guarantor under any Qualified Guaranty.
Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) NETTING OF PAYMENTS; MODIFICATION OF SECTION 2(A)(III)(1). Subparagraph (ii)
of Section 2(c) will apply. Section 2(a)(iii)(1) is amended by deleting "or
Potential Event of Default".
(j) "AFFILIATE" will have the meaning specified in Section 14, provided, that,
Party B shall not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii) hereof.
(k) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding after
Section 3(f) the following subsections:
"(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) 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
(ii) 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 COMMODITY EXCHANGE ACT. (1) It is an "eligible contract
participant" within the meaning of Section 1a(12) of the Commodity Exchange
Act, as amended; (2) this Agreement and each Transaction is subject to
individual negotiation by such party; and (3) neither
M3-10
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) SWAP AGREEMENT. Each Transaction is a "swap agreement" as defined in 12
U.S.C. Section 1821(e)(8)(D)(vi) and a "covered swap agreement" as defined
in the Commodity Exchange Act (7 U.S.C. Section 27(d)(1))."
(l) 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.
Part 5. OTHER PROVISIONS.
(a) 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.
(b) 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.
(c) SET-OFF. All payments under this Agreement shall be made without set-off or
counterclaim, except as provided in Section 2(c), Section 6 or the provisions
hereof relating to Market Quotation and Loss, or Paragraph 8 of the Credit
Support Annex. Section 6(e) is amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off." For the avoidance of
doubt, if more than one Transaction is entered into under this Agreement,
nothing herein is intended to prevent the determination of a Settlement Amount
with respect to all such Transactions pursuant to Section 6 (as modified
hereby).
(d) FAILURE TO PAY OR DELIVER. Section 5(a)(i) is hereby amended by replacing
the word "third" by the word "second" in the third line thereof.
(e) NON-RECOURSE. Notwithstanding any provision herein or in this Agreement to
the contrary, the obligations of the Trust hereunder are limited recourse
obligations of the Trust, payable solely from amounts on deposit in the Corridor
Account. In the event that the Corridor Account and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the realization of
the Corridor Account and the distribution of the proceeds thereof in accordance
with the Pooling and Servicing Agreement, any claims against or obligations of
the Trust under this Agreement or any confirmation hereunder still outstanding
shall be extinguished and thereafter not revive. This provision shall survive
the termination of this Agreement.
(f) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. Party A shall not
institute against or cause any other person to institute against, or join any
other person in instituting against Party B, the Depositor or the Trust, 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 termination of this Agreement.
(g) TRANSFER, ASSIGNMENT. Notwithstanding the provisions of Sections 6(b)(ii)
and 7, no novation, assignment or transfer of any Transaction shall be permitted
by either party, unless the Rating Agency Condition with respect to each Rating
Agency is satisfied with respect thereto, except that Party A may, if each
Rating Agency and the non-assigning party has received prior written notice
thereof (1) transfer all or any part of its interest in any amount payable to it
if Party B is a Defaulting Party under Section 6(e) or (2) effect a Permitted
Transfer of this Agreement to any other entity at any time (A) Party A or any
M3-11
guarantor under a Qualified Guaranty has Limited Qualifying Ratings or
Disqualifying Ratings, (B) pursuant to Section 6(b)(ii), (C) pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity, (D) to another of its
offices or branches; or (E) to an Affiliate. The consent of Party B shall not be
required for a novation, assignment or transfer by Party A in accordance with
clauses (1) and (2) of the preceding sentence and Party B shall take all steps
reasonably requested by Party A (at the expense of Party A) to effect a
Permitted Transfer. A "PERMITTED TRANSFER" means a novation or assignment to or
entry into another form of Replacement Transaction pursuant to which a Qualified
Transferee acquires and assumes or enters into a Replacement Transaction by a
written instrument in respect of all the Transactions and the rights,
liabilities, duties and obligations of Party A hereunder and with respect to
which (1) there is no adverse effect on netting or set-off rights, (2) neither
Party A nor the transferee will be required to withhold or deduct on account of
any Tax from any payments under this Agreement in excess of what would have been
required to be withheld or deducted in the absence of such transfer, (3) an
Event of Default or Termination Event would not occur as a result, and (4) (x)
with respect to any Rating Agency, the terms of the Transactions are not
modified other than parties, effective date of said transfer, and tax payee
representations of Party A (and in such case, it shall not be a condition of
such Replacement Transaction that it preserve for Party B the economic
equivalent of all payment and delivery obligations hereunder and be in all
material respects no less beneficial for Party B than those of the
Transactions), or (y) with respect to Xxxxx'x, the terms of the Transactions are
modified to a greater extent than provided in (x) but the definition of
Replacement Transaction is otherwise complied with.
(h) AMENDMENT. Notwithstanding the provisions of Section 9(b), each amendment,
modification or waiver in respect of this Agreement shall be subject to the
Rating Agency Condition with respect to each Rating Agency.
(i) RATINGS DOWNGRADE.
(i)DEFINITIONS. For purposes of each Transaction:
(A) "RATING AGENCY CONDITION" means, with respect to any action taken
or to be taken hereunder, a condition that is satisfied when the
relevant Rating Agency has confirmed in writing to the Trustee that
such action will not result in withdrawal, reduction or other adverse
action with respect to any then-current rating by the Rating Agency of
the Certificates.
(B) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any
guarantor under a Qualified Guaranty, in the cases when such debt has
both short-term and long-term debt ratings and when such debt has only
long-term ratings, will be "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS" and "DISQUALIFYING RATINGS", as identified below:
M3-12
RATINGS OF PARTY A OR GUARANTOR
UNDER A QUALIFIED GUARANTY:
----------------------------------------
HAS LONG-TERM AND HAS ONLY
RATING AGENCY: SHORT-TERM RATINGS LONG-TERM RATINGS
-------------- -------------------- -----------------
"QUALIFYING RATINGS":
XXXXX'X: P-1 and A2 or above A1 or above
S&P: A-1 or above A+ or above
FITCH: F1 and A or above A or above
"LIMITED QUALIFYING RATINGS":
XXXXX'X: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a A-2 A, A- or BBB+
Qualified Guaranty is a Financial
Institution:
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS":*
XXXXX'X: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a A-3 or below BBB or below
Qualified Guaranty is a Financial
Institution:(Financial Institution)
If neither Party A nor guarantor under A-2 or below A or below
a Qualified Guaranty is a Financial
Institution:(Other)
FITCH: F3 or BBB or below BBB or below
* The withdrawal by Xxxxx'x of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
(C) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance
company, structured investment vehicle or derivative product company.
(D) "QUALIFIED TRANSFEREE" means a transferee of a novation or
assignment or a party (other than Party B) that enters into another
form of Replacement Transaction that is a Reference Market-maker
("dealer" in the definition thereof meaning a "dealer in notional
principal contracts" as defined in Treas. Reg. Section 1.1001-4) that
has Qualifying Ratings or Limited Qualifying Ratings assigned by each
Rating Agency, or whose present and future obligations owing to Party
B are guaranteed pursuant to a Qualified Guaranty.
(E) "QUALIFIED GUARANTY" means an unconditional and irrevocable
guaranty of payment (and not of collection) and the performance of the
other obligations of Party A (or a Qualified Transferee, as
applicable) hereunder by a third party that has Qualifying Ratings or
Limited Qualifying Ratings assigned by each Rating Agency ("QUALIFIED
GUARANTOR") in a form that satisfies the S&P Rating Condition and that
provides, inter alia, that payment thereunder shall be made as
provided and on the conditions set forth in Section 2(d) as modified
hereunder (substituting references to Party A as "X" with the
guarantor as "X" and "this Agreement" with such guaranty,
respectively) (or, in lieu of such provisions relating to tax, a law
firm has given a legal opinion confirming that none of the guarantor's
payments to Party B under such guaranty will be subject to withholding
for Tax).
(ii) POSTING OF COLLATERAL. If Party A or any guarantor under a Qualified
Guaranty is assigned Limited Qualifying Ratings or Disqualifying Ratings by
a Rating Agency, then, within, with respect to:
M3-13
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or if such ratings exist from the time Party A becomes a party
hereto or the guarantor under a Qualified Guaranty becomes such guarantor,
from such time), and for so long as such Limited Qualifying Ratings or
Disqualifying Ratings continue, Party A shall, at its own expense, post
collateral in accordance with the Credit Support Annex.
(iii) REPLACEMENT OR GUARANTY. If Party A or any guarantor under a
Qualified Guaranty is assigned Disqualifying Ratings by a Rating Agency,
then, within, with respect to:
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: sixty (60) calendar days
(3) FITCH: thirty (30) calendar days
thereafter, Party A shall, at its own expense, (x) novate, assign or
transfer the Transactions to or replace the Transactions with Replacement
Transactions with a Qualified Transferee, or (y) obtain a Qualified
Guaranty.
(j)REGULATION AB.
(a) 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
Party A has not, within 30 days after receipt of a Swap Disclosure
Request complied with the provisions set forth below in this Part 5(j)
(provided that if the significance percentage reaches 10% after a Swap
Disclosure Request has been made to Party A, Party A must comply with
the provisions set forth below in this Part 5(j) within 10 calendar
days of Party A being informed of the significance percentage reaching
10%), then an Additional Termination Event shall have occurred with
respect to Party A and Party A shall be the sole Affected Party with
respect to such Additional Termination Event.
(b) Party A 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 Party A or its group
of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other derivative
contracts between Party A or its group of affiliated entities, if
applicable, and the Party B, as calculated from time to time in
accordance with Item 1115 of Regulation AB.
(c) If the Depositor determines, reasonably and in good faith, that
the significance percentage of this Agreement has increased to eight
(8) percent, then the Depositor may request on a Business Day after
the date of such determination from Party A 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 Party B or the Depositor shall
provide Party A with the calculations and any other information
reasonably requested by Party A 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 Party A's option,
either the information set forth in Item 1115(b)(1) or Item 1115(b)(2)
of Regulation AB.
(d) Upon the occurrence of a Swap Disclosure Request, Party A, at its
own expense, shall (x) provide the Depositor with the Swap Financial
Disclosure in an Xxxxx-compatible format, or (y) subject to Rating
Agency Condition with respect to each Rating Agency, secure another
entity to replace Party A 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.
M3-14
(e) Party A's obligation to comply with this Paragraph 4(9) shall be
suspended as of January 1, 2008 unless, at any time, Party A receives
notification from the Depositor or the Party B that the Trust Fund's
obligation to file periodic reports under the Exchange Act shall
continue; provided, however, that such obligations shall not be
suspended in respect of any Exchange Act Report or amendment to an
Exchange Act Report in such fiscal year which relates to any fiscal
year in which the Trust Fund was subject to the reporting requirements
of the Exchange Act. This obligation shall continue to be suspended
unless the Depositor or the Party B notifies Party A that the Trust
Fund's obligations to file reports under the Exchange Act has resumed.
(k) TRUSTEE 'S CAPACITY. It is expressly understood and agreed by the
parties hereto that, insofar as this Agreement and any confirmation
evidencing a Transaction hereunder is executed by LaSalle Bank National
Association, (i) this Agreement and such confirmation are executed and
delivered by LaSalle Bank National Association, not in its individual
capacity but solely as Trustee of the Trust pursuant to the Pooling and
Servicing Agreement in the exercise of the powers and authority conferred
upon and vested in it thereunder, and pursuant to instruction set forth
therein, (ii) each of the representations, undertakings and agreements
herein or therein made on behalf of the Trust is made and intended not as a
personal representation, undertaking or agreement of LaSalle Bank National
Association but is made and intended for the purpose of binding only the
Trust, 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 Agreement or any such confirmation
(l) TRUSTEE'S REPRESENTATION. LaSalle Bank National Association, Trustee of
the Trust, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to
enter into this Agreement and each confirmation evidencing a
Transaction hereunder as Trustee on behalf of the Trust.
(m) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and 6,
if Party B has satisfied its payment obligations under Section 2(a)(i), and
shall, at the time, have no future payment or delivery obligation, whether
absolute or contingent, then unless Party A is required pursuant to
appropriate proceedings to return to Party B or otherwise returns to Party
B upon demand of Party B any portion of such payment, (a) the occurrence of
an event described in Section 5(a) with respect to Party B shall not
constitute an Event of Default or Potential Event of Default with respect
to Party B as the Defaulting Party and (b) Party A shall be entitled to
designate an Early Termination Date pursuant to Section 6 only as a result
of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) with respect to Party A as the Affected Party or Section 5(b)(iii)
with respect to Party A as the Burdened Party or Part 1(g) with Party B as
the Affected Party.
(n) 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 Party A. MLML further agrees to provide notice to
Party A upon any remittance to the Trustee.
M3-15
5. ACCOUNT DETAILS AND SETTLEMENT INFORMATION:
PAYMENTS TO Party A:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #000000000
Account #000-0000-000
Reference: Interest Rate Swap
PAYMENTS TO PARTY B:
LaSalle Bank
ABA# 000000000
LaSalle CHGO/CTR/BNF:/LASALLE TRUST
A/C# 725059.2
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.
M3-16
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
A. BY:
------------------------------
Name:
Title:
M3-17
The Party B, acting through its duly authorized signatory, hereby agrees
to, accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR THE XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
B. BY:
------------------------------
Name:
Title:
Solely with respect to Part 5(n)
IV. XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
Title:
M3-18
SCHEDULE I
(all such dates subject adjustment in accordance with the Modified Following
Business Day Convention)
Notional
From and To but Amount Cap Rate Ceiling Rate
including excluding (in USD) (%) (%)
--------- --------- ----------- -------- ------------
10/10/07 10/25/07 167,440,000 7.110 7.110
10/25/07 11/25/07 167,440,000 5.472 7.110
11/25/07 12/25/07 167,440,000 5.735 7.110
12/25/07 01/25/08 167,440,000 5.472 7.110
01/25/08 02/25/08 167,440,000 5.472 7.110
02/25/08 03/25/08 167,440,000 6.015 7.110
03/25/08 04/25/08 167,440,000 5.472 7.110
04/25/08 05/25/08 167,440,000 5.734 7.110
05/25/08 06/25/08 167,440,000 5.472 7.110
06/25/08 07/25/08 167,440,000 5.734 7.110
07/25/08 08/25/08 167,440,000 5.472 7.110
08/25/08 09/25/08 167,440,000 5.472 7.110
09/25/08 10/25/08 0 0.000 0.000
10/25/08 11/25/08 0 0.000 0.000
11/25/08 12/25/08 0 0.000 0.000
12/25/08 01/25/09 0 0.000 0.000
01/25/09 02/25/09 0 0.000 0.000
02/25/09 03/25/09 0 0.000 0.000
03/25/09 04/25/09 0 0.000 0.000
04/25/09 05/25/09 0 0.000 0.000
05/25/09 06/25/09 0 0.000 0.000
06/25/09 07/25/09 0 0.000 0.000
07/25/09 08/25/09 0 0.000 0.000
08/25/09 09/25/09 0 0.000 0.000
09/25/09 10/25/09 0 0.000 0.000
10/25/09 11/25/09 0 0.000 0.000
11/25/09 12/25/09 0 0.000 0.000
12/25/09 01/25/10 0 0.000 0.000
01/25/10 02/25/10 0 0.000 0.000
02/25/10 03/25/10 0 0.000 0.000
03/25/10 04/25/10 0 0.000 0.000
04/25/10 05/25/10 0 0.000 0.000
05/25/10 06/25/10 0 0.000 0.000
06/25/10 07/25/10 0 0.000 0.000
07/25/10 08/25/10 0 0.000 0.000
08/25/10 09/25/10 0 0.000 0.000
09/25/10 10/25/10 0 0.000 0.000
10/25/10 11/25/10 0 0.000 0.000
11/25/10 12/25/10 0 0.000 0.000
12/25/10 01/25/11 0 0.000 0.000
01/25/11 02/25/11 0 0.000 0.000
02/25/11 03/25/11 0 0.000 0.000
M3-19
03/25/11 04/25/11 0 0.000 0.000
04/25/11 05/25/11 0 0.000 0.000
05/25/11 06/25/11 0 0.000 0.000
06/25/11 07/25/11 0 0.000 0.000
07/25/11 08/25/11 0 0.000 0.000
08/25/11 09/25/11 0 0.000 0.000
09/25/11 10/25/11 0 0.000 0.000
10/25/11 11/25/11 0 0.000 0.000
11/25/11 12/25/11 0 0.000 0.000
12/25/11 01/25/12 111,561,244 9.791 12.000
01/25/12 02/25/12 109,016,746 9.617 12.000
02/25/12 03/25/12 106,530,484 9.970 12.000
03/25/12 04/25/12 104,101,119 9.303 12.000
04/25/12 05/25/12 101,727,342 9.403 12.000
05/25/12 06/25/12 99,370,148 9.010 12.000
06/25/12 07/25/12 95,341,766 9.234 12.000
07/25/12 08/25/12 90,858,063 9.449 12.000
08/25/12 09/25/12 86,601,391 9.735 12.000
09/25/12 10/25/12 82,569,450 9.279 12.000
10/25/12 11/25/12 78,776,549 8.970 12.000
11/25/12 12/25/12 76,472,671 9.262 12.000
12/25/12 01/25/13 74,737,280 9.027 12.000
01/25/13 02/25/13 73,046,973 9.463 12.000
02/25/13 03/25/13 71,396,707 10.682 12.000
03/25/13 04/25/13 69,784,557 9.648 12.000
04/25/13 05/25/13 68,208,903 9.968 12.000
05/25/13 06/25/13 66,668,910 9.644 12.000
M3-20
Exhibit A to Confirmation No. 39957
[Credit Support Annex to follow this page]
M3-21
EXHIBIT M-4
FORM OF CREDIT SUPPORT ANNEX RELATED TO THE CAP CORRIDOR CONTRACTS
(BILATERAL FORM) (ISDA AGREEMENTS SUBJECT TO NEW YORK LAW ONLY)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
Dated as of October 10, 2007
between
THE BANK OF NEW YORK and LASALLE BANK NATIONAL
ASSOCIATION, NOT IN ITS
INDIVIDUAL CAPACITY, BUT SOLELY
AS TRUSTEE FOR THE XXXXXXX XXXXX
FIRST FRANKLIN MORTGAGE LOAN
TRUST, SERIES 2007-5
established as a banking organization The Trust is a common law trust
under the laws of the State of New York established under the laws of
the State of New York.
("PARTY A") ("PARTY B")
--------------------------------------- --------------------------------
This Annex supplements, forms part of, and is subject to, the Master
Agreement specified in the Confirmation(s) (BNY Ref. No. 39955, 39956 and
39957), dated even date herewith (the "AGREEMENT"), is part of the Schedule
deemed incorporated therein and is a Credit Support Document under the Master
Agreement with respect to Party A.
Accordingly, the parties agree as follows:--
PARAGRAPHS 1 - 12. INCORPORATION. Paragraphs 1 through 12 inclusive of the ISDA
Credit Support Annex (Bilateral Form) (ISDA Agreements Subject to New York Law
Only) published in 1994 by the International Swaps and Derivatives Association,
Inc. are incorporated herein by reference and made a part hereof.
PARAGRAPH 13.
AMENDED AND ADDITIONAL DEFINITIONS. As used in this Annex:--
M-4-1
(i) SECURED PARTY, PLEDGOR. Notwithstanding anything contained in this
Annex to the contrary, (a) the term "SECURED PARTY" as used in this Annex
means only Party B, (b) the term "PLEDGOR" as used in this Annex means only
Party A, and (c) only Party A makes the pledge and grant in Paragraph 2,
the acknowledgment in the final sentence of Paragraph 8(a) and the
representations in Paragraph 9.
(ii) RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating
Agency rates the Certificates, such terms refer to each Rating Agency and
its criteria separately rather than collectively.
"RATING AGENCY" means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc.,
or Derivative Fitch Ltd., or any subsidiary, or successor thereof.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS", and "DISQUALIFYING RATINGS" have the same meanings as assigned in
Part 5(i)(i), notwithstanding restatement herein.
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
(iii) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any guarantor
under a Qualified Guaranty, in the cases when such debt has both short-term
and long-term debt ratings and when such debt has only long-term ratings,
will be "LIMITED QUALIFYING RATINGS" and "DISQUALIFYING RATINGS", as
identified below:
RATINGS OF PARTY A OR GUARANTOR
UNDER A QUALIFIED GUARANTY:
-------------------------------------
HAS LONG-TERM AND HAS ONLY LONG-
RATING AGENCY: SHORT-TERM RATINGS TERM RATINGS
-------------- -------------------- --------------
"LIMITED QUALIFYING RATINGS":
MOODY'S: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a A-2 A, A- or BBB+
Qualified Guaranty is a Financial
Institution:
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS"*:
MOODY'S: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a A-3 or below BBB or below
Qualified Guaranty is a Financial
Institution:
If neither Party A nor guarantor under a A-2 or below A or below
Qualified Guaranty is a Financial
Institution:
FITCH: F3 or BBB or below BBB or below
* The withdrawal by Moody's of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings, will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
M-4-2
(iv) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance
company, structured investment vehicle or derivative product company.
(v) "LOCAL BUSINESS DAY" means: (i) any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign
currency deposits) in New York, and (ii) in relation to a Transfer of
Eligible Collateral, a day on which the clearance system agreed between the
parties for the delivery of Eligible Collateral is open for acceptance and
execution of settlement instructions (or in the case of a Transfer of Cash
or other Eligible Collateral for which delivery is contemplated by other
means, a day on which commercial banks are open for business (including
dealings for foreign exchange and foreign currency deposits) in New York
and such other places as the parties shall agree).
(vi) "CREDIT SUPPORT DELIVERY PERIOD" means, with respect to the assignment
of Limited Qualifying Ratings or Disqualifying Ratings, as the case may be,
by a Rating Agency, the period beginning within, with respect to:
(1) MOODY'S: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or, in each case, if such ratings exist from the time the
Pledgor becomes a party hereto or the guarantor under a Qualified Guaranty
becomes a guarantor, from such time), and continuing for so long as such
Limited Qualifying Ratings or Disqualifying Ratings continue.
If Disqualifying Ratings are assigned after Limited Qualifying Ratings have
been assigned, collateral shall be posted in accordance with the
requirements applicable to Limited Qualifying Ratings until the Credit
Support Delivery Period with respect to the Disqualifying Ratings has
commenced.
(a) SECURITY INTEREST FOR "OBLIGATIONS." The term "OBLIGATIONS" as used in this
Annex includes the following additional obligations: Not applicable.
(b) CREDIT SUPPORT OBLIGATIONS. During the Credit Support Delivery Period,
Credit Support Amount, Value, Delivery Amount and Return Amount will be
calculated separately for each Rating Agency then rating the Certificates in
accordance with the provisions relating to such Rating Agency set forth in this
Paragraph 13(b), and the Pledgor will Transfer the highest Delivery Amount and
the Secured Party will Transfer the lowest Return Amount so calculated,
provided, that the Return Amount will be reduced to such amount as necessary so
that Transfer of a Delivery Amount will not be required immediately after the
Transfer of such Return Amount.
(i)DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.
(A) "DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a)
except that the words "upon a demand made by the Secured Party on or
promptly following a Valuation Date" shall be deleted and replaced by
the words "on each Valuation Date during the Credit Support Delivery
Period."
(B) "RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
(C) "CREDIT SUPPORT AMOUNT" in Paragraph 3(b), shall be amended in its
entirety to read as follows:
M-4-3
"'CREDIT SUPPORT AMOUNT' means, (x) for any Valuation Date during the
Credit Support Delivery Period, (i) the Secured Party's Exposure for
that Valuation Date, plus (ii) the Independent Amount applicable to
the Pledgor (with respect to all Affected Transactions), if any, minus
(iii) the Pledgor's Threshold; provided, however, that the Credit
Support Amount will be deemed to be zero whenever the calculation of
the Credit Support Amount yields a number less than zero, and shall
not be less than the Credit Support Minimum; and (y) at any other
time, None."
The calculation of the Credit Support Amount during the Credit Support
Delivery Period may be expressed in the following formula (which summarizes
but does not supersede said provisions):
Credit Support Amount = max [E + IA, 0, m]
Where:
max = the greater of; min = the lesser of
E= Exposure (i.e., the market value of the Affected Transactions)
IA = Independent Amount =
* Moody's: min [DV01 x 15 % (daily); % in Schedule 2 x N]
* Fitch: % in Schedule 3 (i.e., Volatility Cushion) x N
* S&P: 25% x E (Disqualifying Ratings only)
N = the aggregate notional amount of the Affected Transactions.
m = Credit Support Minimum (Moody's (Disqualifying Ratings only))
(ii) ELIGIBLE COLLATERAL AND VALUATION PERCENTAGE. The items and Valuation
Percentages with respect to each Rating Agency set forth in Schedule 1 will
be "ELIGIBLE COLLATERAL" and the applicable "VALUATION PERCENTAGE" for such
Rating Agency. Sub-paragraph (i)(A) of the definition of "Value" is amended
to read as follows: "(A) Cash, the face amount thereof multiplied by the
applicable Valuation Percentage; and".
(iii) OTHER ELIGIBLE SUPPORT. The following items will qualify as "OTHER
ELIGIBLE SUPPORT" for the party specified: Not Applicable.
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means with respect to the Secured Party:
Zero; and, with respect to the Pledgor for any Valuation Date: an
amount (identified separately for each Rating Agency) equal to:
(1) MOODY'S: the lesser of (x) the product of (I) if each Local
Business Day is a Valuation Date, 15, and, otherwise, 25, and
(II) with respect to each Transaction and any date of
determination, the estimated change in the mid-market value with
respect to such Transaction that would result from a one basis
point change in the relevant swap curve on such date, as
determined by the Valuation Agent in good faith and in a
commercially reasonable manner in accordance with the relevant
methodology customarily used by the Valuation Agent for such
Transaction (such estimate, the "DVO1" of the Pledgor), and (y)
the product of (I) the Notional
M-4-4
Amount for each Transaction for the Calculation Period which
includes such Valuation Date and (II) the applicable percentage
set forth in Schedule 2.
(2) S&P: (x) if S&P Limited Qualifying Ratings have been
assigned, zero, and (y) if S&P Disqualifying Ratings have been
assigned, the product of (I) the Secured Party's Exposure for
that Valuation Date and (II) 25%.
(3) FITCH: the product of the aggregate Notional Amount
outstanding at the beginning of the related Calculation Period
under the applicable Affected Transactions and the Fitch
Volatility Cushion determined using the table set forth in
Schedule 3.
As used herein, "INDEPENDENT AMOUNT" means the additional amount to be
added to the Secured Party's Exposure pursuant to the calculation of
Credit Support Amount at the time the Delivery Amount is required to
be delivered or transferred hereunder and does not imply or require
that a separate amount be delivered or transferred on the execution of
this Agreement or on any Trade Date or at any other time.
(B) "THRESHOLD" means for the Pledgor: zero during the Credit Support
Delivery Period and at any other time an infinite number.
(C) "CREDIT SUPPORT MINIMUM" means, with respect to each Rating
Agency, the amount identified below:
(1) MOODY'S: if Moody's Disqualifying Ratings,have been assigned,
the greater of zero and the aggregate amount of the net payments
(each such net payment ("NET PAYMENT") being the greater of zero
and the amount of the payment due to be made by the Pledgor under
Section 2(a) on a Payment date less the amount of any payment due
to be made by the Secured Party under Section 2(a) on the same
Payment Date after giving effect to any applicable netting under
Section 2(c)) with respect to all Affected Transactions due from
the Pledgor in respect of all following scheduled Payments.
(2) S&P: Zero.
(3) FITCH: Zero.
(D) "MINIMUM TRANSFER AMOUNT" means with respect to the Pledgor and
the Secured Party: $100,000; provided, that the Minimum Transfer
Amount for such party shall be $50,000 if the aggregate principal
balance of the rated Certificates is $50,000,000 or less on the
applicable Valuation Date, and upon the occurrence and during the
continuance of an Event of Default, Termination Event, Additional
Termination Event, or Specified Condition shall be zero.
(E) ROUNDING. The Delivery Amount will be rounded up to the nearest
integral multiple of $10,000 and the Return Amount will be rounded
down to the nearest integral multiple of $10,000.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means, the Pledgor in all circumstances.
(ii) "VALUATION DATE" means:.
[X] each Local Business Day, or
M-4-5
[ ] any Local Business Day in each calendar week, which shall be the
same calendar day each week to the extent practicable, on a
reasonably consistent basis.
provided, that, upon any assignment, transfer or novation of this Agreement
by Party A, either a daily or weekly Valuation Date may be elected by the
transferee.
(iii) "VALUATION TIME" means:
[ ] the close of business in the city of the Valuation Agent on the
Valuation Date or date of calculation, as applicable;
[X] the close of business on the Local Business Day before the
Valuation Date or date of calculation, as applicable;
provided, that (x) the calculations of Value and Exposure will be made as
of approximately the same time on the same date, and (y) upon any
assignment, transfer or novation of this Agreement by Party A, either same
day or prior day Valuation Time may be elected by the transferee.
(iv) "NOTIFICATION TIME" means 1:00 p.m., New York time, on a Local
Business Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. (i) Illegality
and (ii) Additional Termination Events will be a "SPECIFIED CONDITION" for the
Pledgor (as the Affected Party) (but not for purposes of Paragraph 8(d)), and
(iii) Tax Event and (iv) Tax Event Upon Merger will not be a "SPECIFIED
CONDITION for the Pledgor.
(e) SUBSTITUTION.
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
(ii) CONSENT. If specified here as applicable, then the Pledgor must obtain
the Secured Party's consent for any substitution pursuant to Paragraph
4(d): Applicable.
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 1:00 p.m., New York time, on the Local Business
Day following the date on which the notice is given that gives rise to a
dispute under Paragraph 5.
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support will be calculated as follows: as set forth for other
purposes in Paragraph 12.
(iii) ALTERNATIVE. The provisions of Paragraph 5 will apply, except to the
following extent: (A) pending the resolution of a dispute, Transfer of the
undisputed Value of Eligible Credit Support or Posted Credit Support
involved in the relevant demand will be due as provided in Paragraph 5 if
the demand is given by the Notification Time, but will be due on the second
Local Business Day after the demand if the demand is given after the
Notification Time; and (B) the Disputing Party need not comply with the
provisions of Paragraph 5(II)(2) if the amount to be Transferred does not
exceed the Disputing Party's Minimum Transfer Amount.
(g) HOLDING AND USING POSTED COLLATERAL.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. The Secured Party
will not be entitled to hold Posted Collateral itself, but will hold Posted
Collateral in an identifiable segregated account through a Custodian (which
may be the Trustee and which shall at all
M-4-6
times be a financial institution as specified inthe Pooling and Servicing
Agreement). If not so specified, the Custodian shall be a commercial bank
or trust company which is unaffiliated with Party B organized under the
laws of the United States or any state thereof, having assets of at least
$10 billion and a long term debt or a deposit rating of at least Baa2 from
Moody's and A from S&P. For so long as the Certificates are rated by S&P,
any Custodian other than the Trustee shall have a short-term debt or
deposit rating of at least A-1, or, if it has no short-term rating, a
long-term debt or deposit rating of at least A+, from S&P and shall be
replaced by the Trustee within sixty (60) calendar days after it ceases to
have such ratings.
Initially, the Custodian for Party B is: LaSalle Bank National Association
(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c) will not
apply to the Secured Party; therefore, the Secured Party will not have any
of the rights specified in Paragraph 6(c)(i) or 6 (c)(ii) except that the
Secured Party may register any Posted Collateral in the name of the
Custodian or its nominee under Paragraph 6(c)(ii).
(h) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE", with respect to Eligible Collateral
in the form of Cash will be the actual rate of interest earned by the
Counterparty or the Custodian if the Cash is invested at the direction of
the Pledgor in accordance with Paragraph 13(1)(vi); otherwise the "Interest
Rate" will be, for any day, the rate opposite the caption "Federal Funds
(Effective)" for such day as published for such day in Federal Reserve
Publication H.15(519) or any successor publication as published by the
Board of Governors of the Federal Reserve System or such other rate as
agreed by the parties.
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount will
be made on the first Local Business Day of each calendar month and on any
Local Business Day that Posted Collateral in the form of Cash is
Transferred to the Pledgor pursuant to Paragraph 3(b), subject to the
receipt and availability of such funds.
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)(ii)
will apply.
(i) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT.
(i) "VALUE" with respect to Other Eligible Support and Other Posted Support
means: Inapplicable.
(ii) "TRANSFER" with respect to Other Eligible Support and Other Posted
Support means: Inapplicable.
(j) DEMANDS AND NOTICES. All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement, unless
otherwise specified here:
(i) Party A: Not applicable.
(ii) Party B: Not applicable.
(k) ADDRESSES FOR TRANSFERS.
Party A: For Cash: To be provided
For Eligible Collateral: To be provided
Party B: To be provided
M-4-7
(l) OTHER PROVISIONS.
(i) TRANSFER TIMING.
(A) Paragraph 4(b) shall be deleted and replaced in its entirety by
the following paragraph: "Subject to Paragraphs 4(a) and 5 and unless
otherwise specified, if a demand for the Transfer of Eligible Credit
Support or Posted Credit Support is made by the Notification Time,
then the relevant Transfer will be made not later than the close of
business on the second Local Business Day thereafter; if a demand is
made after the Notification Time then the relevant Transfer will be
made not later than the close of business on the third Local Business
Day thereafter."
(B) Paragraph 6(d)(1) shall be amended so that the reference therein
to "the following Local Business Day" shall be replaced by reference
to "the second Local Business Day thereafter".
(ii) NO COUNTERCLAIM. A party's rights to demand and receive the Transfer
of Eligible Collateral as provided hereunder and its rights as Secured
Party against the Posted Collateral or otherwise shall be absolute and
subject to no counterclaim, set-off, deduction or defense in favor of the
Pledgor except as contemplated in Sections 2 and 6 of the Agreement and
Paragraph 8 of this Annex.
(iii) HOLDING COLLATERAL. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated account (the "SWAP
COLLATERAL ACCOUNT") and to hold, record and identify all the Posted
Collateral therein and, subject to Paragraphs 6(c) and 8(a), such Posted
Collateral shall at all times be and remain the property of the Pledgor and
shall at no time constitute the property of, or be commingled with the
property of, the Secured Party or the Custodian.
(iv) INVESTMENT OF CASH POSTED COLLATERAL. Posted Collateral in the form of
Cash shall be invested in Permitted Investments as directed by the Pledgor,
with gains and losses incurred in respect of such investments to be for the
account of the Pledgor, subject to the following parameters: the Posted
Collateral in the form of Cash shall be invested in such overnight (or
redeemable within two Local Business Days of demand) investments meeting at
least two of the following ratings requirements by the respective Rating
Agencies (of which one shall be S&P if the Certificates are rated by S&P)
(x) AAAm or AAAm-G by S&P, (y) Prime -1 or Aaa by Xxxxx'x, and (z)
'AAA'/'F1' by Fitch, as directed by the Pledgor (provided, that such
investment shall be held uninvested or invested at the direction of the
Secured Party if an Event of Default or an Additional Termination Event has
occurred with respect to which the Pledgor is the defaulting or sole
Affected Party and the Secured Party has designated an Early Termination
Date with respect thereto). Such instructions may be delivered as standing
instructions.
(v) RETURN OF POSTED COLLATERAL. At any time the Pledgor is required to
post collateral pursuant to Part 5(i)(ii) of the Schedule, the Pledgor
shall be obligated to transfer Eligible Collateral in accordance with the
terms of this Annex. If the Pledgor is so required to post collateral, and
thereafter ceases to be required to post collateral, under Part 5(i)(ii) of
the Schedule (and provided that no Event of Default exists with respect to
the Pledgor) or the Pledgor has made a transfer, assignment or novation of
this Agreement and all the Transactions, then the Pledgor's obligations to
transfer Eligible Collateral under this Annex will immediately cease, and
the Secured Party will, upon demand by the Pledgor, return to the Pledgor,
or cause its Custodian to return, all Posted Collateral held under this
Annex. Without prejudice to the provisions of Paragraph 8, the Secured
Party is authorized to liquidate any Posted Collateral pursuant to written
instructions from the Pledgor.
M-4-8
(vi) EXPENSES. Notwithstanding Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for, all transfer and
other taxes and other costs involved in the transfer and maintenance of
Eligible Collateral.
(vii) LIMIT ON SECURED PARTY'S LIABILITY. The Secured Party will not be
liable for any losses or damages that the Pledgor may suffer as a result of
any failure by the Secured Party to perform, or any delay by it in
performing, any of its obligations under this Annex if the failure or delay
results from circumstances beyond the reasonable control of the Secured
Party or its Custodian, such as interruption or loss of computer or
communication services, labor disturbance, natural disaster or local or
national emergency.
(viii) EXTERNAL VERIFICATION OF XXXX-TO-MARKET VALUATIONS. If the long-term
or short-term senior unsecured debt of the Pledgor is rated BBB or F3 or
below by Fitch, once every month, the Pledgor will at its own expense
verify its determination of Exposure of the Transaction on the next
Valuation Date by seeking quotations from two (2) Reference Market-makers
(provided, that a Reference Market-maker may not be used more than four
times within each 12 month period) for their determination of Exposure of
the Transaction on such Valuation Date and the Valuation Agent will use the
greater of either (a) its own determination or (b) the high quotation for a
Reference Market-maker, if applicable for the next Valuation Date and cure
any deficiency in collateral value within three Local Business Days. The
Pledgor shall provide the quotations of such Reference Market-makers to
Fitch.
[Signature page immediately follows]
M-4-9
IN WITNESS WHEREOF the parties have executed this Credit Support Annex on
the respective dates specified below with effect from the date on the first
page.
THE BANK OF NEW YORK LASALLE BANK NATIONAL ASSOCIATION, NOT
IN ITS INDIVIDUAL CAPACITY, BUT SOLELY
AS TRUSTEE FOR THE XXXXXXX XXXXX FIRST
FRANKLIN MORTGAGE LOAN TRUST, SERIES
2007-5
By: By:
--------------------------------- ------------------------------------
Name: Name:
Title: Title:
Date: Date:
M-4-10
SCHEDULE 1A
ELIGIBLE COLLATERAL
XXXXX'X
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
Xxxxx'x Valuation Percentage columns:
* Column A sets out the percentage applicable when Xxxxx'x Limited
Qualifying Ratings have been assigned.
* Column B sets out the percentage applicable when Xxxxx'x Disqualifying
Ratings have been assigned.
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X)
REMAINING
YEARS
TO MATURITY VALUATION VALUATION
------------- PERCENTAGE PERCENTAGE
NOT (DAILY) (WEEKLY)
ELIGIBLE COLLATERAL MORE MORE ---------- ----------
(CASH OR SECURITIES) THAN: THAN: A B A B
-------------------- ----- ----- --- ---- --- ----
A. U.S. Dollars (USD) Cash n/a n/a 100% 100% 100% 100%
B. Euro Cash n/a n/a 98% 94% 97% 93%
X. Xxxxxxxx (GBP) Cash n/a n/a 98% 95% 97% 94%
D. Floating-rate negotiable debt obligations
issued by the U.S. Treasury Department
after July 18, 1984 ("TREASURIES") of all
maturities n/a n/a 100% 99% 99% 99%
E. Fixed-rate US Treasuries 0 1 100% 100% 100% 100%
F. Fixed-rate Treasuries 1 2 100% 99% 100% 99%
G. Fixed-rate Treasuries 2 3 100% 98% 100% 98%
H. Fixed-rate Treasuries 3 5 100% 97% 100% 97%
I. Fixed-rate Treasuries 5 7 100% 96% 100% 95%
J. Fixed-rate Treasuries 7 10 100% 94% 100% 94%
K. Fixed-rate Treasuries 10 20 100% 90% 100% 89%
L. Fixed-rate Treasuries 20 30 100% 88% 100% 87%
M. Floating-rate negotiable debt obligations
of the Federal National Mortgage
Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Federal Home
Loan Banks (FHLB), Federal Farm Credit
Banks (FFCB), Tennessee Valley Authority
(TVA) (collectively, "AGENCY SECURITIES")
of all maturities n/a n/a 100% 99% 100% 98%
N. Fixed-rate Agency Securities 0 1 100% 99% 100% 99%
O. Fixed-rate Agency Securities 1 2 100% 99% 100% 98%
P. Fixed-rate Agency Securities 2 3 100% 98% 100% 97%
Q. Fixed-rate Agency Securities 3 5 100% 96% 100% 96%
M-4-1A-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X)
R. Fixed-rate Agency Securities 5 7 100% 93% 100% 94%
S. Fixed-rate Agency Securities 7 10 100% 93% 100% 93%
T. Fixed-rate Agency Securities 10 20 100% 89% 100% 88%
U. Fixed-rate Agency Securities 20 30 100% 87% 100% 86%
V. FHLMC Certificates. Mortgage participation
certificates issued by FHLMC evidencing
undivided interests or participations in
pools of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, issued after July 18,
1984 and having a remaining maturity of
not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years * * * * * *
W. FNMA Certificates. Mortgage-backed
pass-through certificates issued by FNMA
evidencing undivided interests in pools of
first lien mortgages or deeds of trust on
residential properties, guaranteed by
FNMA, issued after July 18, 1984 and
having a remaining maturity of not more
than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years. * * * * * *
X. GNMA Certificates. Mortgage-backed
pass-through certificates issued by
private entities, evidencing undivided
interests in pools of first lien mortgages
or deeds of trust on single family
residences, guaranteed by the Government
National Mortgage Association (GNMA) with
the full faith and credit of the United
States, issued after July 18, 1984 and
having a remaining maturity of not more
than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years. * * * * * *
Y. Floating rate commercial mortgage-backed
securities rated AAA by two major rating
agencies (including S&P if S&P is a Rating
Agency hereunder) with a minimum par or
face amount of $250 million (excluding
securities issued under Rule 144A)
("COMMERCIAL MORTGAGE-BACKED SECURITIES")
having a remaining maturity of not more
than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years. * * * * * *
Z. Commercial Paper with a rating of at least
P-1 by Xxxxx'x and at least
M-4-1A-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X)
A-1+ by S&P (if S&P is a Rating Agency
hereunder) and having a remaining
maturity of not more than 30 days. n/a n/a * * * *
AA. Floating Rate Euro-denominated negotiable
debt obligations rated Aa3 and above by
Xxxxx'x issued or guaranteed by (a) the
Bank of England on behalf of the Treasury
of the United Kingdom; (b) the government
of France; (c) the government of Germany;
and (d) the government of Belgium ("EURO
GOVERNMENT SECURITIES") of all maturities n/a n/a 98% 93% 97% 92%
BB. Fixed-Rate Euro Government Securities 0 1 98% 94% 97% 93%
CC. Fixed-Rate Euro Government Securities 1 2 98% 93% 97% 92%
DD. Fixed-Rate Euro Government Securities 2 3 98% 92% 97% 91%
EE. Fixed-Rate Euro Government Securities 3 5 98% 90% 97% 89%
FF. Fixed-Rate Euro Government Securities 5 7 98% 89% 97% 87%
GG. Fixed-Rate Euro Government Securities 7 10 98% 88% 97% 86%
HH. Fixed-Rate Euro Government Securities 10 20 98% 84% 97% 82%
II. Fixed-Rate Euro Government Securities 20 30 98% 82% 97% 80%
JJ. Floating-Rate Sterling Pound-denominated
negotiable debt obligations rated Aa3 and
above by Xxxxx'x issued by the Bank of
England on behalf of the Treasury of the
United Kingdom ("GILTS") of all maturities n/a n/a 98% 93% 97% 93%
KK. Fixed-Rate Gilts 0 1 98% 94% 97% 93%
LL. Fixed-Rate Gilts 1 2 98% 93% 97% 92%
MM. Fixed-Rate Gilts 2 3 98% 92% 97% 91%
NN. Fixed-Rate Gilts 3 5 98% 91% 97% 90%
OO. Fixed-Rate Gilts 5 7 98% 90% 97% 89%
PP. Fixed-Rate Gilts 7 10 98% 89% 97% 88%
QQ. Fixed-Rate Gilts 10 20 98% 86% 97% 84%
M-4-1A-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X)
RR. Fixed-Rate Gilts 20 30 98% 84% 97% 82%
SS. Other Items of Credit Support approved by
the Rating Agency to the extent any Notes
are rated. * * * * * *
* Zero, or such other valuation percentages as supplied or published by
Xxxxx'x, in respect of which Xxxxx'x has delivered a ratings confirmation.
M-4-1A-4
SCHEDULE 1B
ELIGIBLE COLLATERAL
S&P
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
S&P Valuation Percentage columns:
* Column A sets out the percentage to be used when S&P Limited Qualifying
Ratings have been assigned.
* Column B sets out the percentage to be used when S&P Disqualifying Ratings
have been assigned.
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
REMAINING
YEARS
TO MATURITY VALUATION VALUATION
------------- PERCENTAGE PERCENTAGE
NOT (DAILY) (WEEKLY)
ELIGIBLE COLLATERAL MORE MORE ----------- ------------
(CASH OR SECURITIES) THAN: THAN: A B A B
-------------------- ----- ----- ---- ---- ----- ----
A. U.S. Dollars (USD) Cash n/a n/a 100% 80.0% 100% 80%
B. EUR Cash n/a n/a 95.1% 76.1% 92.6% 74.1%
X. Xxxxxxxx (GBP) Cash n/a n/a 96.1% 76.9% 94.1% 75.3%
D. Floating-rate negotiable debt obligations n/a n/a n/a n/a n/a n/a
issued by the U.S. Treasury Department after
July 18, 1984 ("FLOATING RATE TREASURIES") of
all maturities
E. Fixed-rate negotiable debt obligations issued 0 1 98.9% 79.1% 98.0% 78.4%
by the U.S. Treasury Department after July
18, 1984 ("FIXED-RATE TREASURIES")
F. Fixed-rate Treasuries 1 2 98.0% 78.4% 98.0% 78.4%
G. Fixed-rate Treasuries 2 3 98.0% 78.4% 98.0% 78.4%
H. Fixed-rate Treasuries 3 5 98.0% 78.4% 98.0% 78.4%
I. Fixed-rate Treasuries 5 7 93.7% 75.0% 92.6% 74.1%
J. Fixed-rate Treasuries 7 10 92.6% 74.1% 92.6% 74.1%
K. Fixed-rate Treasuries 10 20 91.1% 72.9% 87.9% 70.3%
L. Fixed-rate Treasuries 20 30 88.6% 70.9% 84.6% 67.7%
M. Floating-rate negotiable debt obligations of n/a n/a * * * *
the Federal National Mortgage Association
(FNMA), Federal Home Loan Mortgage
Corporation (FHLMC), Federal Home Loan Banks
(FHLB), Federal Farm Credit Banks (FFCB),
Tennessee Valley Authority (TVA)
(collectively, "FLOATING-RATE AGENCY
SECURITIES") (all maturities)
M-4-1B-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
N. Fixed-rate negotiable debt obligations of the 0 1 98.5% 78.8% 98.0% 78.4%
Federal National Mortgage Association (FNMA),
Federal Home Loan Mortgage Corporation
(FHLMC), Federal Home Loan Banks (FHLB),
Federal Farm Credit Banks (FFCB), Tennessee
Valley Authority issued after July 18, 1984
(TVA) (collectively, "FIXED-RATE AGENCY
SECURITIES")
O. Fixed-rate Agency Securities 1 2 98.0% 78.4% 98.0% 78.4%
P. Fixed-rate Agency Securities 2 3 98.0% 78.4% 98.0% 78.4%
Q. Fixed-rate Agency Securities 3 5 98.0% 78.4% 98.0% 78.4%
R. Fixed-rate Agency Securities 5 7 92.6% 74.1% 92.6% 74.1%
S. Fixed-rate Agency Securities 7 10 92.6% 74.1% 92.6% 74.1%
T. Fixed-rate Agency Securities 10 20 87.7% 70.2% 82.6% 66.1%
U. Fixed-rate Agency Securities 20 30 84.4% 67.5% 77.9% 62.3%
V. FHLMC Certificates. Mortgage participation * * * * * *
certificates issued by FHLMC evidencing
undivided interests or participations in
pools of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, issued after July 18,
1984 and having a remaining maturity of not
more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
W. FNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by FNMA
evidencing undivided interests in pools of
first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA,
issued after July 18, 1984 and having a
remaining maturity of not more than 1 year
and [1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years
X. GNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by private
entities, evidencing undivided interests in
pools of first lien mortgages or deeds of
trust on single family residences, guaranteed
by the Government National Mortgage
Association (GNMA) with the full faith and
credit of the United States, issued after
July 18, 1984 and having a remaining maturity
of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
M-4-1B-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
Y. Floating rate commercial mortgage-backed * * * * * *
securities rated AAA by two major rating
agencies (including S&P if S&P is a Rating
Agency hereunder) with a minimum par or face
amount of $250 million (excluding securities
issued under Rule 144A) ("COMMERCIAL MORTGAGE
- BACKED SECURITIES") having a remaining
maturity of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
Z. Commercial Paper with a rating of at least n/a n/a * * * *
P-1 by Xxxxx'x and at least A-1+ by S&P and
having a remaining maturity of not more than
30 days
AA. Floating Rate Euro-denominated negotiable 0 5 * * * *
debt obligations rated AAA by S&P issued or
guaranteed by (a) the Bank of England on
behalf of the Treasury of the United Kingdom;
(b) the government of France; (c) the
government of Germany; and (d) the government
of Belgium ("EURO GOVERNMENT SECURITIES")
BB. Floating-Rate Euro Government Securities 5 10 * * * *
CC. Fixed-Rate Euro Government Securities 0 1 98.8% 79.0% 95.2% 76.2%
DD. Fixed-Rate Euro Government Securities 1 2 97.9% 78.3% 95.2% 76.2%
EE. Fixed-Rate Euro Government Securities 2 3 96.9% 77.5% 95.2% 76.2%
FF. Fixed-Rate Euro Government Securities 3 5 95.2% 76.2% 95.2% 76.2%
GG. Fixed-Rate Euro Government Securities 5 7 88.7% 71.0% 87.0% 69.6%
HH. Fixed-Rate Euro Government Securities 7 10 87.0% 69.6% 87.0% 69.6%
II. Fixed-Rate Euro Government Securities 10 20 75.5% 60.4% 72.5% 58.0%
JJ. Fixed-Rate Euro Government Securities 20 30 * * * *
KK. Floating-Rate Sterling Pound-denominated 0 5 * * * *
negotiable debt obligations rated AAA by S&P
issued by the Bank of England on behalf of
the Treasury of the United Kingdom ("GILTS")
LL. Floating-Rate Gilts 5 10 * * * *
MM. Fixed-Rate Gilts 0 1 * * * *
NN. Fixed-Rate Gilts 1 2 * * * *
M-4-1B-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
OO. Fixed-Rate Gilts 2 3 * * * *
PP. Fixed-Rate Gilts 3 5 * * * *
QQ. Fixed-Rate Gilts 5 7 * * * *
RR. Fixed-Rate Gilts 7 10 * * * *
SS. Fixed-Rate Gilts 10 20 * * * *
TT. Fixed-Rate Gilts 20 30 * * * *
UU. Other Items of Credit Support approved by the * * * *
Rating Agency to the extent any Certificates
are rated
* Zero, or such other valuation percentages as supplied or published by S&P,
in respect of which the S&P Rating Agency Condition has been satisfied.
M-4-1B-4
SCHEDULE 1C
ELIGIBLE COLLATERAL
FITCH
Valuation Date: Weekly (Percentages for Daily to be substituted on publication
or communication by Fitch.) Denomination of Credit Support Amount: USD
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
REMAINING
YEARS TO VALUATION VALUATION
MATURITY PERCENTAGE PERCENTAGE
------------- (DAILY) (WEEKLY)
NOT -----------------------
MORE MORE (AAA (AAA
ELIGIBLE COLLATERAL (CASH OR SECURITIES) THAN: THAN: RATED) RATED)
---------------------------------------- ----- ----- ---------- ----------
A. U.S. Dollars (USD) Cash n/a n/a 100%
B. EUR Cash
X. Xxxxxxxx (GBP) Cash
D. Floating-rate negotiable debt obligations issued n/a n/a *
by the U.S. Treasury Department after July 18,
1984 ("FLOATING-RATE TREASURIES") of all
maturities
E. Fixed-rate negotiable debt obligations issued by 0 1 99.5%
the U.S. Treasury Department after July 18, 1984
("FIXED-RATE TREASURIES")
F. Fixed-rate Treasuries 1 2 97.6%
G. Fixed-rate Treasuries 2 3 97.6%
H. Fixed-rate Treasuries 3 5 96.3%
I. Fixed-rate Treasuries 5 7 95.3%
J. Fixed-rate Treasuries 7 10 93.9%
K. Fixed-rate Treasuries 10 15 92.6%
L. Fixed-rate Treasuries 15 30 * *
M. Floating-rate negotiable debt obligations of the n/a n/a * *
Federal National Mortgage Association (FNMA),
Federal Home Loan Mortgage Corporation (FHLMC),
Federal Home Loan Banks (FHLB), Federal Farm
Credit Banks (FFCB), Tennessee Valley Authority
(TVA) (collectively, "FLOATING-RATE AGENCY
SECURITIES") of all maturities
N. Fixed-Rate negotiable debt obligations of the 0 1 * *
Federal National Mortgage Association (FNMA),
Federal Home Loan Mortgage Corporation (FHLMC),
Federal Home Loan Banks (FHLB), Federal Farm
Credit Banks (FFCB), Tennessee Valley Authority
(TVA) issued after July 18, 1984. (collectively,
"FIXED-RATE AGENCY SECURITIES")
O. Fixed-rate Agency Securities 1 2 * *
P. Fixed-rate Agency Securities 2 3 * *
M-4-1C-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
Q. Fixed-rate Agency Securities 3 5 * *
R. Fixed-rate Agency Securities 5 7 * *
S. Fixed-rate Agency Securities 7 10 * *
T. Fixed-rate Agency Securities 10 15 * *
U. Fixed-rate Agency Securities 20 30 * *
V. FHLMC Certificates. Mortgage participation * *
certificates issued by FHLMC evidencing undivided
interests or participations in pools of first lien
conventional or FHA/VA residential mortgages or
deeds of trust, guaranteed by FHLMC, issued after
July 18, 1984 and having a remaining maturity of
not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-30] years
W. FNMA Certificates. Mortgage-backed pass-through * *
certificates issued by FNMA evidencing undivided
interests in pools of first lien mortgages or
deeds of trust on residential properties,
guaranteed by FNMA, issued after July 18, 1984 and
having a remaining maturity of not more than 1
year and [1-2][2-3][3-5][5-7][7-10][10-20][20-30]
years
X. GNMA Certificates. Mortgage-backed pass-through * *
certificates issued by private entities,
evidencing undivided interests in pools of first
lien mortgages or deeds of trust on single family
residences, guaranteed by the Government National
Mortgage Association (GNMA) with the full faith
and credit of the United States, issued after July
18, 1984 and having a remaining maturity of not
more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-30] years
Y. Floating rate commercial mortgage-backed * *
securities rated AAA by two major rating agencies
with a minimum par or face amount of $250 million
(excluding securities issued under Rule 144A)
("COMMERCIAL MORTGAGE-BACKED SECURITIES") having a
remaining maturity of
[1-2][2-3][3-5][5-7][7-10][10-20][20- 30] years
Z. Commercial Paper with a rating of at least F-1+ by 99.5%
Fitch and having a remaining maturity of not more
than 1 year denominated in USD, EUR or GBP
AA. Floating-Rate Sterling Pound-denominated * * * *
negotiable debt obligations issued by the Bank of
England on behalf of the Treasury of the United
Kingdom ("GILTS") of all maturities
BB. Fixed-Rate Gilts 0 1 99.3%
M-4-1C-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
CC. Fixed-Rate Gilts 1 2 97.8%
DD. Fixed-Rate Gilts 2 3 97.8%
EE. Fixed-Rate Gilts 3 5 96.6%
FF. Fixed-Rate Gilts 5 7 95.7%
GG. Fixed-Rate Gilts 7 10 94.0%
HH. Fixed-Rate Gilts 10 15 92.8%
II. Fixed-Rate Gilts 15 30 * *
JJ. Floating-Rate Euro-denominated negotiable debt n/a n/a * *
obligations rated Aa3 and above by Xxxxx'x issued
or guaranteed by the government of France ("OATS")
of all maturities
KK. Fixed-Rate Oats 0 1 98.8%
LL. Fixed-Rate Oats 1 2
MM. Fixed-Rate Oats 2 3 98.2%
NN. Fixed-Rate Oats 3 5 98.2%
OO. Fixed-Rate Oats 5 7 97.0%
PP. Fixed-Rate Oats 7 10 96.0%
QQ. Fixed-Rate Oats 10 15 94.7%
RR. Fixed-Rate Oats 15 30 * *
SS. Floating-Rate Euro-denominated negotiable debt n/a n/a * *
obligations rated Aa3 and above by Xxxxx'x issued
or guaranteed by the government of Germany
("BUNDS") of all maturities
TT. Fixed-Rate Bunds 0 1 99.3%
UU. Fixed-Rate Bunds 1 2 98.1%
VV. Fixed-Rate Bunds 2 3 98.1%
WW. Fixed-Rate Bunds 3 5 96.9%
XX. Fixed-Rate Bunds 5 7 96.2%
YY. Fixed-Rate Bunds 7 10 95.1%
ZZ. Fixed-Rate Bunds 10 15 94.2%
AAA. Fixed-Rate Bunds 15 30 * *
BBB. Floating-Rate Euro-denominated negotiable debt n/a n/a
obligations rated Aa3 and above by Xxxxx'x issued
or guaranteed by the government of Belgium
("OLOS") of all maturities
CCC. Fixed-Rate Olos 0 1 99.3%
DDD. Fixed-Rate Olos 1 2 98.1%
EEE. Fixed-Rate Olos 2 3 98.1%
FFF. Fixed-Rate Olos 3 5 96.9%
GGG. Fixed-Rate Olos 5 7 96.2%
HHH. Fixed-Rate Olos 7 10 95.1%
M-4-1C-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
III. Fixed-Rate Olos 10 15 94.2%
JJJ. Fixed-Rate Olos 15 30 * *
KKK. Other Items of Credit Support approved by the * *
Rating Agency to the extent any Certificates are
rated
* Zero, or such other valuation percentages as supplied or published by
Fitch, in respect of which Fitch has delivered a ratings confirmation.
In addition to (and if not set forth in) the foregoing table, the following
items will constitute Eligible Collateral, at the valuation percentages
indicated (weekly valuation basis) or to be supplied or as published by Fitch
(daily valuation basis) (assuming the notes to be denominated in the currency
indicated):
VALUATION PERCENTAGES FOR GOVERNMENT BONDS (FITCH)
(Assuming Weekly Posting of Collateral)
REMAINING
YEARS
TO MATURITY
-------------
NOT NOTES' RATING (%)
MORE MORE ---------------------------
REGION CURRENCY THAN: THAN: 'AAA' 'AA' 'A' 'BBB'
------ -------- ----- ----- ----- ---- ---- -----
Europe EUR 0 1 99.6 99.7 99.8 99.8
Europe EUR 1 3 98.7 99.1 99.3 99.4
Europe EUR 3 5 98.0 98.6 98.9 99.1
Europe EUR 5 7 97.5 98.2 98.6 98.9
Europe EUR 7 10 96.8 97.7 98.2 98.6
Europe EUR 10 15 95.9 97.1 97.7 98.2
U.K. GBP 0 1 99.6 99.7 99.8 99.8
U.K. GBP 1 3 98.5 99.1 99.3 99.4
U.K. GBP 3 5 97.9 98.6 98.9 99.1
U.K. GBP 5 7 97.2 98.2 98.6 98.9
U.K. GBP 7 10 96.7 97.7 98.2 98.5
U.K. GBP 10 15 95.7 97.0 97.6 98.1
M-4-1C-4
U.S. USD 0 1 99.5 99.6 99.7 99.8
U.S. USD 1 3 98.2 98.7 99.0 99.2
U.S. USD 3 5 96.6 97.9 98.4 98.7
U.S. USD 5 7 95.3 97.3 97.9 98.3
U.S. USD 7 10 93.9 96.4 97.2 97.7
U.S. USD 10 15 92.7 95.5 96.5 97.1
M-4-1C-5
SCHEDULE 2
MOODY'S INDEPENDENT AMOUNT PERCENTAGES
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
The following percentages shall be used in the calculation of the Moody's
Independent Amount:
* Column A: LIMITED QUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE:
Percentage to be used when Moody's Limited Qualifying Ratings have been
assigned.
Applies to any Transaction.
* Column B: DISQUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE (TRANSACTION
SPECIFIC XXXXXX):
Percentage to be used when Moody's Disqualifying Ratings have been
assigned.
Applies to any Transaction that is an interest rate cap, interest rate
floor or interest rate swaption, or that is an interest rate swap the
notional amount of which is "balance guaranteed" or, for any Calculation
Period, otherwise is not a specific dollar amount that is fixed at the
inception of the Transaction (a "TRANSACTION-SPECIFIC HEDGE").
* Column C: DISQUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE
(NON-TRANSACTION SPECIFIC XXXXXX):
Percentage to be used when Moody's Disqualifying Ratings have been
assigned.
Applies to any Transaction that is not a Transaction-Specific Hedge.
WEIGHTED AVERAGE LIFE OF MOODY'S INDEPENDENT
TRANSACTION IN YEARS AMOUNT PERCENTAGES
------------------------- -------------------
MORE THAN NOT MORE THAN A B C
0 1 0.15% 0.65% 0.50%
1 2 0.30% 1.30% 1.00%
2 3 0.40% 1.90% 1.50%
3 4 0.60% 2.50% 1.90%
4 5 0.70% 3.10% 2.40%
5 6 0.80% 3.60% 2.80%
6 7 1.00% 4.20% 3.20%
7 8 1.10% 4.70% 3.60%
8 9 1.20% 5.20% 4.00%
9 10 1.30% 5.70% 4.40%
10 11 1.40% 6.10% 4.70%
11 12 1.50% 6.50% 5.00%
12 13 1.60% 7.00% 5.40%
13 14 1.70% 7.40% 5.70%
14 15 1.80% 7.80% 6.00%
15 16 1.90% 8.20% 6.30%
16 17 2.00% 8.60% 6.60%
17 18 2.00% 9.00% 6.90%
X-0-0-0
00 00 2.00% 9.40% 7.20%
19 20 2.00% 9.70% 7.50%
20 21 2.00% 10.00% 7.80%
21 22 2.00% 10.00% 8.00%
22 30 2.00% 10.00%
M-4-2-2
SCHEDULE 3
FITCH VOLATILITY CUSHION
Valuation: Daily
Denomination of Credit Support Amount: USD
The Fitch Volatility Cushion will be determined using the following tables
(provided that percentages assuming daily posting of collateral, based on
assumptions in effect on the date hereof, are to be substituted on publication
or communication by Fitch.):
VOLATILITY CUSHIONS FOR INTEREST RATE SWAPS AND COLLARS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
BASIS ---------------------------------------------------------
CURRENCY NOTES' RATHING SWAP 1 2 3 4 5 6 7 8 9 10
-------- --------------- ----- --- --- --- --- --- --- --- --- --- ---
USD 'AA-' or Better 0.19 0.6 1.6 2.6 3.4 4.2 4.8 5.5 5.9 6.4 7.0
USD 'A+/A' 0.10 0.3 0.8 1.3 1.7 2.1 2.4 2.8 3.0 3.3 3.6
USD 'A-/BBB+' 0.07 0.2 0.6 1.0 1.3 1.6 1.9 2.1 2.3 2.5 2.7
EUR 'AA-' or Better 0.11 0.4 1.0 1.6 2.1 2.5 2.8 3.1 3.4 3.6 3.9
EUR 'A+/A' 0.07 0.2 0.6 1.0 1.3 1.5 1.7 1.9 2.1 2.2 2.4
EUR 'A-/BBB+' 0.05 0.2 0.5 0.7 1.0 1.1 1.3 1.4 1.6 1.7 1.8
GBP 'AA-' or Better 0.12 0.4 1.1 1.6 2.0 2.4 2.7 3.0 3.2 3.5 4.0
GBP 'A+/A' 0.07 0.3 0.6 0.9 1.2 1.4 1.5 1.8 1.9 2.0 2.3
GBP 'A-/BBB+' 0.05 0.2 0.5 0.7 0.9 1.1 1.2 1.4 1.5 1.6 1.8
VOLATILITY CUSHIONS FOR INTEREST RATE CAPS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
---------------------------------------------------------
CURRENCY NOTES' RATING 1 2 3 4 5 6 7 8 9 10
-------- --------------- --- --- --- --- --- --- --- --- --- ---
USD 'AA-' or Better 0.4 1.3 2.1 2.8 3.3 4.0 4.0 4.3 4.5 5.0
USD 'A+/A' 0.3 0.8 1.3 1.7 1.8 2.4 2.4 2.4 2.5 2.5
USD 'A-/BBB+' 0.2 0.6 0.9 1.2 1.2 1.6 1.6 1.8 1.8 1.9
EUR 'AA-' or Better 0.3 0.8 1.3 1.5 1.9 1.9 2.1 2.2 2.4 2.4
M-4-3-1
EUR A+/A 0.2 0.6 0.9 1.2 1.3 1.4 1.6 1.6 1.7 1.7
EUR 'A-/BBB+' 0.2 0.5 0.7 0.9 1.1 1.2 1.2 1.3 1.3 1.3
GBP 'AA-' or Better 0.4 1.0 1.3 1.7 1.7 1.7 2.0 2.2 2.2 2.2
GBP 'A+/A' 0.2 0.6 0.8 1.0 1.1 1.1 1.3 1.5 1.5 1.5
GBP 'A-/BBB+' 0.2 0.4 0.6 0.8 0.9 0.9 1.0 1.2 1.2 1.2
VOLATILITY CUSHIONS FOR CROSS-CURRENCY SWAPS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
BASIS ---------------------------------------------------------
CURRENCY NOTES' RATING SWAP 1 2 3 4 5 6 7 8 9 10
-------- --------------- ----- --- --- --- --- --- --- --- --- --- ---
EUR/GBP 'AA-' or Better 4.6 4.7 4.8 4.9 5.1 5.3 5.4 5.6 5.7 5.8 6.0
EUR/GBP 'A+/A' 3.7 3.8 3.8 4.0 4.1 4.2 4.4 4.5 4.6 4.7 4.9
EUR/GBP 'A-/BBB+' 3.0 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9
EUR/USD 'AA-' or Better 8.0 8.1 8.3 8.6 8.8 9.0 9.1 9.3 9.4 9.5 9.7
EUR/USD 'A+/A' 5.1 5.2 5.3 5.5 5.6 5.8 5.9 6.0 6.0 6.1 6.2
EUR/USD 'A-/BBB+' 4.3 4.4 4.5 4.7 4.8 4.9 5.0 5.1 5.1 5.2 5.3
GBP/USD 'AA-' or Better 6.4 6.4 6.5 6.6 6.7 6.8 6.9 7.1 7.2 7.3 7.5
GBP/USD 'A+/A' 4.2 4.2 4.3 4.3 4.4 4.5 4.5 4.6 4.7 4.8 4.9
GBP/USD 'A-/BBB+' 3.4 3.4 3.5 3.5 3.6 3.6 3.7 3.8 3.8 3.9 4.0
M-4-3-2
EXHIBIT N
[RESERVED]
N-1
EXHIBIT O
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER TO REGULATION S BOOK-ENTRY CERTIFICATE
FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
RE: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
Ladies and Gentlemen:
In connection with our disposition of the Class ___ Certificates which
are held in the form of Definitive Certificates or in the form of a beneficial
interest in a Rule 144A Book-Entry Certificate and to effect the transfer
pursuant to Regulation S under the Securities Act of 1933, as amended
("Regulation S") of the above Certificates in exchange for an equivalent
beneficial interest in a Regulation S Book-Entry Certificate, we hereby certify
that such transfer has been effected in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
September 1, 2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as Depositor,
LaSalle Bank National Association, as Trustee, Home Loan Services, Inc., as
Servicer, and in the Certificates and (ii) in accordance with Regulation S, and
that:
a. the offer of the Certificates was not made to a person in the
United States;
b. at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
c. no directed selling efforts have been made in contravention of the
requirements of Rule 903 or 904 of Regulation S, as applicable;
d. the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933, as
amended; and
e. the transferee is not a U.S. Person (as defined by Regulation S).
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or official inquiry
O-1
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
Print Name of Transferor
By
Authorized Officer
O-2
EXHIBIT P
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER PURSUANT TO RULE 144A FROM A HOLDER OF
A REGULATION S BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services - Xxxxxxx Xxxxx First Xxxxxxxx
Mortgage Loan Trust, Series 2007-5
RE: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5, Mortgage
Loan Asset-Backed Certificates
Ladies and Gentlemen:
In connection with our disposition of the Class __ Certificates which
are held in the form of Definitive Certificates or in the form of a beneficial
interest in a Regulation S Book-Entry Certificate and to effect the transfer
pursuant to Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
of the above Certificates in exchange for an equivalent beneficial interest in a
Rule 144A Book-Entry Certificate or a Definitive Note, we hereby certify that
such Certificates are being transferred in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
September 1, 2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as Depositor,
La Salle Bank National Association, as Trustee, Home Loan Services, Inc., as
Servicer, and in the Certificates and (ii) Rule 144A under the Securities Act of
1933, as amended, to a transferee that we reasonably believe is purchasing the
Certificates for its own account or an account with respect to which the
transferee exercises sole investment discretion, the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
Print Name of Transferor
By:
Authorized Officer
P-1
EXHIBIT Q
FORM OF SWAP AGREEMENT
(THE BANK OF NEW YORK LOGO)
Dated: October 10, 2007
RATE SWAP TRANSACTION
RE: BNY REFERENCE NO. 39954
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 ("PARTY A"), a
trust company duly organized and existing under the laws of the State of New
York, and the Supplemental Interest Trust relating to the Xxxxxxx Xxxxx First
Xxxxxxxx Mortgage Loan Trust, Series 2007-5 (the "PARTY B"), as represented by
LaSalle Bank National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee under the Pooling and Servicing Agreement,
dated and effective September 1, 2007, among Xxxxxxx Xxxxx Mortgage Investments,
Inc., as Depositor, Home Loan Services, Inc., 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"). Any reference to a "Swap Transaction" in
the Definitions is deemed to be a reference to a "Transaction" for purposes of
this Agreement, and any reference to a "Transaction" in this Agreement is deemed
to be a reference to a "Swap Transaction" for purposes of the Definitions. 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. For the avoidance of doubt, the Transaction
described herein shall be the sole Transaction governed by such ISDA Form Master
Agreement. Except as otherwise specified, references herein to Sections shall be
to Sections of the Master Agreement, and references to Paragraphs shall be to
paragraphs of this Agreement. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the 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: October 5, 2007
Effective Date: September 25, 2008
Termination Date: September 25, 2012, subject to adjustment in
accordance with the Following Business Day
Convention; provided, however, that for the
purpose of determining the final Fixed Rate
Payer Period End Date, Termination Date shall be
subject to No Adjustment.
Q-1
FIXED AMOUNTS
Fixed Rate Payer: Party B
Fixed Rate: 4.700%
Fixed Rate Day Count
Fraction: 30/360
Fixed Rate Payer
Period End Dates: The 25th day of each month, beginning on October
25, 2008 and ending on the Termination Date,
with No Adjustment.
Fixed Rate Payer
Payment Dates: Early Payment shall be applicable. The Fixed
Rate Payer Payment Date shall be one (1)
Business Day preceding each Fixed Rate Payer
Period End Date.
FLOATING AMOUNTS
Floating Rate Payer: Party A
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 October
25, 2008 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 one (1)
Business Day preceding each Floating Rate Payer
Period End Date.
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days for Payments
By both parties: New York and Illinois
Calculation Agent: BNY
Additional Payment: Party B has directed Xxxxxxx Xxxxx Mortgage
Lending, Inc. to make a payment of USD [_] to
Party A on October 10, 2007.
3. ADDITIONAL PROVISIONS:
Q-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.
4. PROVISIONS DEEMED INCORPORATED IN A SCHEDULE TO THE MASTER AGREEMENT:
RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating Agency rates
the Certificates, such terms refer to each Rating Agency and its criteria
separately rather than collectively.
"RATING AGENCY" .means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc., or
Derivative Fitch Ltd., or any subsidiary, or successor thereof.
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING RATINGS",
and "DISQUALIFYING RATINGS" have the meanings assigned in Part 5(i)(i).
DEFINITIONS INCORPORATED BY REFERENCE. Capitalized terms used in this Agreement
that are not defined herein and are defined in the Pooling and Servicing
Agreement, have the meanings assigned therein. In the event of any inconsistency
between the terms of this Agreement and the terms of the Pooling and Servicing
Agreement, this Agreement will govern.
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" in relation to Party A or Party B shall mean: none.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(c) APPLICABILITY. The following provisions apply or do not apply to the
parties as specified below:
(i) Section 5(a)(i) (FAILURE TO PAY OR DELIVER):
(A) will apply to Party A; and
(B) will apply to Party B.
(ii) Section 5(a)(ii) (BREACH OF AGREEMENT):
(A) will apply to Party A; and
(B) will not apply to Party B.
(iii) Section 5(a)(iii) (CREDIT SUPPORT DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B;
provided, that, with respect to Moody's Limited Qualifying Ratings and
Moody's Disqualifying Ratings, (x) this will apply only to Moody's
Disqualifying Ratings that have continued for at least 30 Local
Business Days, and (y) at least one Qualified Transferee has made an
offer which remains capable of becoming legally binding upon
acceptance to enter into a Permitted Transfer or other Replacement
Transaction.
(iv) Section 5(a)(iv) (MISREPRESENTATION):
(A) will apply to Party A; and
(B) will not apply to Party B.
(v) Section 5(a)(v) (DEFAULT UNDER SPECIFIED TRANSACTION):
Q-3
(A) will not apply to Party A; and
(B) will not apply to Party B.
(vi) Section 5(a)(vi) (CROSS DEFAULT):
(A) will apply to Party A; and
(B) will not apply to Party B.
For the purposes of Section 5(a)(vi):
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section
14, except that it shall not include indebtedness in respect of
deposits received.
"THRESHOLD AMOUNT" means, 3% of consolidated shareholders equity of
Party A (or any guarantor under a Qualified Guaranty) and its
subsidiaries determined in accordance with generally accepted
accounting principles in the jurisdiction of its organization
consistently applied as of the last day of the fiscal year ended
immediately prior to the occurrence or existence of an event for which
a Threshold Amount is applicable under Section 5(a)(vi).
(vii) Section 5(a)(vii) (BANKRUPTCY):
(A) will apply to Party A; and
(B) will not apply to Party B with respect to subclauses (2), (4) (but
only if the proceeding or petition is instituted or presented by Party
A or its affiliates), (7), (8) (but subclause (8) will not apply to
Party B only to the extent that subclauses (2), (4) and (7) do not
apply to Party B) and (9) of Section 5(a)(vii), and the remaining
provisions of Section 5(a)(vii) will apply to Party B; and in
subclause (6) the words "trustee" and "custodian" will not include the
Supplemental Interest Trust Trustee and the words "seeks or" will be
deleted.
(viii) Section 5(a)(viii) (MERGER WITHOUT ASSUMPTION):
(A) will apply to Party A; and
(B) will apply to Party B.
(ix) Section 5(b)(i) (ILLEGALITY):
(A) will apply to Party A; and
(B) will apply to Party B.
(x) Section 5(b)(ii) (TAX EVENT):
(A) will apply to Party A; and
(B) will apply to Party B;
provided that the words "(x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y)" shall be deleted.
(xi) Section 5(b)(iii) (TAX EVENT UPON MERGER):
(A) will apply to Party A; and
(B) will apply to Party B,
provided, that Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event upon Merger in respect of
which it is the Affected Party.
(xii) Section 5(b)(iv) (CREDIT EVENT UPON MERGER):
(A) will not apply to Party A; and
(B) will not apply to Party B.
Q-4
(xiii) Section 5(b)(v) (ADDITIONAL TERMINATION EVENT):
(A) will apply to Party A with respect to Part 1(g)(iv) and (v); and
(B) will apply to Party B with respect to Parts 1(g)(i), (ii), and
(iii).
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply. For such purpose, if Party A is the
Affected Party in respect of an Additional Termination Event or a Tax Event Upon
Merger or the Defaulting Party in respect of any Event of Default (but not, in
any case, in respect of a Termination Event arising from an Illegality or Tax
Event), the following provisions shall apply:
(i) The definitions of "Market Quotation" and "Settlement Amount" are
amended in their entirety to read as follows:
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, an offer capable when made of becoming legally binding
upon acceptance made by a Qualified Transferee for an amount that
would be paid to Party B (expressed as a negative number) or by Party
B (expressed as a positive number) in consideration of an agreement
between Party B and such Qualified Transferee to enter into a
transaction with commercial terms substantially the same as and that
are, in all material respects, no less beneficial for Party B than,
those of this Agreement (save for the exclusion of provisions relating
to Transactions that are not Terminated Transactions) (which shall be
determined by Party B, acting in a commercially reasonable manner),
that would have the effect of preserving the economic equivalent for
Party B of any payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date (such
transaction, a "REPLACEMENT TRANSACTION"). For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of
Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date,
have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included.
"SETTLEMENT AMOUNT" means, with respect to any Early Termination Date:
(1) if, on or prior to such Early Termination Date, a Market Quotation
for the relevant Terminated Transaction or group of Terminated
Transactions is accepted by Party B so as to become legally binding:
the Termination Currency Equivalent of the amount (whether
positive or negative) of such Market Quotation;
(2) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions
has been accepted by Party B so as to become legally binding and one
or more Market Quotations have been communicated to Party B and remain
capable of becoming legally binding upon acceptance by Party B:
the Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market Quotations
(for the avoidance of doubt, (x) a Market Quotation
expressed as a negative number is lower than a Market
Quotation expressed as a positive number and (y) the lower
of two Market Quotations expressed as negative numbers is
the one with the largest absolute value); or
(3) if, on such Early Termination Date, no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions is
accepted by Party B so as to become
Q-5
legally binding and no Market Quotations have been communicated to
Party B and remain capable of becoming legally binding upon acceptance
by Party B:
Party B's Loss (whether positive or negative and without
reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions."
(ii) At any time on or before the Early Termination Date at which two or
more Market Quotations remain capable of becoming legally binding upon
acceptance, Party B shall be entitled to accept only the lowest of such
Market Quotations. (For the avoidance of doubt, (i) a Market Quotation
expressed as a negative number is lower than a Market Quotation expressed
as a positive number and (ii) the lower of two Market Quotations expressed
as negative numbers is the one with the largest absolute value.)
(iii) if Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Early
Termination Date.
(iv) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
shall be deleted in its entirety and replaced with the following:
"SECOND METHOD AND MARKET QUOTATION. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal to
the absolute value of the Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts owing to Party A
and (3) Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B, Provided that, (i)
the amounts payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) and (ii) notwithstanding any other
provision of this Agreement, any amount payable by Party A under (3)
shall not be netted-off against any amount payable by Party B under
(1)."
(f) "TERMINATION CURRENCY" means United States Dollars.
(g) "ADDITIONAL TERMINATION EVENT" will apply. The following shall constitute
Additional Termination Events, and the party specified shall be the Affected
Party with respect thereto:--
(i) TERMINATION OF TRUST FUND. The Trust, Supplemental Interest Trust or
Trust Fund shall be terminated pursuant to any provision of the Pooling and
Servicing Agreement (including, without limitation, by exercise of the
option to purchase and giving of notice under Sections 9.01 and 10.01 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 and the Supplemental Interest Trust or Trust Fund is
terminated and final payment is made in respect of the Certificates. Party
B shall be the sole Affected Party. However, each of Party A and Party B
may designate an Early Termination Date in respect of this Additional
Termination Event.
(ii) INABILITY TO PAY CERTIFICATES. The Trust is unable to pay or fails or
admits in writing its inability to pay (i) on any Distribution Date, any
Current Interest with respect to the Class A Certificates or (ii) by the
Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date, the ultimate payment of principal with
respect to the Class A Certificates, in either case to the extent required
pursuant to the terms of the Pooling and Servicing Agreement to be paid to
the Class A Certificates. Party B shall be the sole Affected Party.
(iii) AMENDMENT OF POOLING AND SERVICING AGREEMENT. The amendment of the
Pooling and Servicing Agreement in a manner which could have a material
adverse effect on Party A without first obtaining the prior written consent
of Party A (such consent not to be unreasonably withheld), where such
consent is required under the Pooling and Servicing Agreement. Party B
shall be the sole Affected Party.
(iv) RATINGS DOWNGRADE. Party A or any guarantor under a Qualified Guaranty
(1) has Limited Qualifying Ratings or Disqualifying Ratings, and Party A
fails to take the actions provided in Part 5(i)(ii)(Posting of Collateral),
within the time periods set out therein, or (2) has Disqualifying Ratings
and Party A fails to take the actions provided in Part
5(i)(iii)(Replacement or Guaranty), within the time periods set out
therein;
Q-6
provided, that, with respect to Xxxxx'x Disqualifying Ratings, (1) such
failure to comply with Part 5(i)(ii) will be treated as an Event of Default
subject to the provisions of Part 1(c)(iii), and not as an Additional
Termination Event, and (2) an Additional Termination Event with respect to
Xxxxx'x will not be constituted with respect to Part 5(i)(iii) unless and
until at least one Qualified Transferee has made an offer which remains
capable of becoming legally binding upon acceptance to enter into a
Permitted Transfer or other Replacement Transaction.
Party A shall be the sole Affected Party.
(v) REGULATION AB. Party A shall fail to comply with the provisions of
Part 5 (j) within the time provided for therein. Party A shall be the sole
Affected Party.
Party B shall not effectively designate an Early Termination Date unless and
until it has given prior written notice thereof to each Rating Agency.
Part 2. TAX REPRESENTATIONS AND CERTAIN TAX-RELATED PROVISIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e), Party A and
Party B 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), Party A and
Party B make the following representations.
(i) The following representation will apply to Party A:
(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 ("TREAS.
REG.")) 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 (z) its U.S. taxpayer identification number is
000000000.
(ii) The following representation will apply to Party B:
None.
(c) ADDITIONAL AMOUNTS NOT PAYABLE BY PARTY B. Party B shall not be required to
pay any additional amounts pursuant to Section 2(d)(i)(4).
(d) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14 is
amended in its entirety to read as follows:
"INDEMNIFIABLE TAX" means in relation to payments by Party A any Tax and in
relation to payments by Party B no Tax.
Part 3. AGREEMENT TO DELIVER DOCUMENTS. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
Q-7
PARTY REQUIRED TO DELIVER
DOCUMENT FORM/DOCUMENT/ CERTIFICATE DATE BY WHICH TO BE DELIVERED
------------------------- -------------------------------------------
Party A and Party B A correct, complete and executed Internal (i) Prior to the first scheduled
Revenue Service Form W-9, with respect to Distribution Date; (ii) in the case of
Party A, and X-0, X-0XXX, X-0XXX, or a U.S. Internal Revenue Service Form
W-8IMY, with appropriate attachments, as W-8ECI, W-8IMY, and W-8BEN that does
applicable, with respect to Party B, or any not include a U.S. taxpayer
other or successor form, in each case that identification number in line 6,
establishes an exemption from deduction or before December 31 of each third
withholding obligations, and any other succeeding calendar year, (iii)
document reasonably requested to allow the promptly upon reasonable demand by the
other party to make payments under this other party; and (iv) promptly upon
Agreement without any deduction or learning that any form previously
withholding for or on the account of any provided by to the other party has
tax. become obsolete or incorrect.
(b) Other documents to be delivered are:
PARTY REQUIRED TO DATE BY WHICH TO BE COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DELIVERED 3(D) REPRESENTATION
----------------- ------------------------------------ ---------------------------- --------------------
Party A A certificate of an authorized Upon the execution and Yes
officer of the party, as to the delivery of this Agreement
incumbency and authority of the
respective officers of the party
signing this Agreement, any relevant
Credit Support Document, or any
Confirmation, as the case may be.
Party B (i) a copy of the executed Pooling With respect to (i) upon Yes
and Servicing Agreement, (ii) an the execution and delivery
incumbency certificate verifying the of the Pooling and
true signatures and authority of the Servicing Agreement, and
person or persons signing this with respect to (ii) and
Agreement on behalf of Party B , and (iii) upon the execution
(iii) a certified copy of the and delivery of this
authorizing resolution (or Agreement
equivalent authorizing
documentation) of Trustee 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.
Party A and A legal opinion as to enforceability Upon the execution and No
Party B of this Agreement and any delivery of this Agreement
Confirmation evidencing a and such Confirmation
Transaction hereunder.
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A:
Q-8
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)
A copy of any notice or other communication with respect to Sections 5 or 6
should also be sent to the addresses set out below:
The Bank of New York
Legal Department
Xxx Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY B:
Global Securities and Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xx.
4 World Financial Center, 10th floor
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(For all purposes.)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:-- not applicable.
Party B appoints as its Process Agent:-- not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is a Multibranch Party and will enter into each Transaction only
through the following Office:- New York (for all Transactions).
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) "CREDIT SUPPORT DOCUMENT" Credit Support Document means in relation to:--
Q-9
Party A: The Credit Support Annex hereto and any Qualified Guaranty.
Party B: Not applicable.
(g) "CREDIT SUPPORT PROVIDER" means in relation to:
Party A: The guarantor under any Qualified Guaranty.
Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) NETTING OF PAYMENTS; MODIFICATION OF SECTION 2(A)(III)(1). Subparagraph (ii)
of Section 2(c) will apply. Section 2(a)(iii)(1) is amended by deleting "or
Potential Event of Default".
(j) "AFFILIATE" will have the meaning specified in Section 14, provided, that,
Party B shall not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii) hereof.
(k) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding after
Section 3(f) the following subsections:
"(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) 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
(ii) 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 COMMODITY EXCHANGE ACT. (1) It is an "eligible contract
participant" within the meaning of Section 1a(12) of the Commodity Exchange
Act, as amended; (2) this Agreement and each Transaction is subject to
individual negotiation by such party; and (3) 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) SWAP AGREEMENT. Each Transaction is a "swap agreement" as defined in 12
U.S.C. Section 1821(e)(8)(D)(vi) and a "covered swap agreement" as defined
in the Commodity Exchange Act (7 U.S.C. Section 27(d)(1))."
(l) 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.
Part 5. OTHER PROVISIONS.
Q-10
(a) 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.
(b) 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.
(c) SET-OFF. All payments under this Agreement shall be made without set-off or
counterclaim, except as provided in Section 2(c), Section 6 or the provisions
hereof relating to Market Quotation and Loss, or Paragraph 8 of the Credit
Support Annex. Section 6(e) is amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off." For the avoidance of
doubt, if more than one Transaction is entered into under this Agreement,
nothing herein is intended to prevent the determination of a Settlement Amount
with respect to all such Transactions pursuant to Section 6 (as modified
hereby).
(d) FAILURE TO PAY OR DELIVER. Section 5(a)(i) is hereby amended by replacing
the word "third" by the word "second" in the third line thereof.
(e) NON-RECOURSE. Notwithstanding any provision herein or in this Agreement to
the contrary, the obligations of the Supplemental Interest Trust hereunder are
limited recourse obligations of the Supplemental Interest Trust, payable solely
from the amounts on deposit in the Swap Account. In the event that the Swap
Account and proceeds thereof should be insufficient to satisfy all claims
outstanding and following the realization of the Swap Account and the
distribution of the proceeds thereof in accordance with the Pooling and
Servicing Agreement, any claims against or obligations of the Supplemental
Interest Trust under this Agreement or any confirmation hereunder still
outstanding shall be extinguished and thereafter not revive. This provision
shall survive the termination of this Agreement.
(f) LIMITATION ON INSTITUTION OF BANKRUPTCY PROCEEDINGS. Party A shall not
institute against or cause any other person to institute against, or join any
other person in instituting against Party B, the Depositor or the Trust, 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 termination of this Agreement.
(g) TRANSFER, ASSIGNMENT. Notwithstanding the provisions of Sections 6(b)(ii)
and 7, no novation, assignment or transfer of any Transaction shall be permitted
by either party, unless the Rating Agency Condition with respect to each Rating
Agency is satisfied with respect thereto, except that Party A may, if each
Rating Agency and the non-assigning party has received prior written notice
thereof (1) transfer all or any part of its interest in any amount payable to it
if Party B is a Defaulting Party under Section 6(e) or (2) effect a Permitted
Transfer of this Agreement to any other entity at any time (A) Party A or any
guarantor under a Qualified Guaranty has Limited Qualifying Ratings or
Disqualifying Ratings, (B) pursuant to Section 6(b)(ii), (C) pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity, (D) to another of its
offices or branches; or (E) to an Affiliate. The consent of Party B shall not be
required for a novation, assignment or transfer by Party A in accordance with
clauses (1) and (2) of the preceding sentence and Party B shall take all steps
reasonably requested by Party A (at the expense of Party A) to effect a
Permitted Transfer. A "PERMITTED TRANSFER" means a novation or assignment to or
entry into another form of Replacement Transaction pursuant to which a Qualified
Transferee acquires and assumes or enters into a Replacement Transaction by a
written instrument in respect of all the Transactions and the rights,
liabilities, duties and obligations of Party A hereunder and with respect to
which (1) there is no adverse effect on netting or set-off rights, (2) neither
Party A nor the transferee will be required to withhold or deduct on account of
any Tax from any payments under this Agreement in excess of what would have been
required to be withheld or deducted in the absence of such transfer, (3) an
Event of Default or Termination Event would not occur
Q-11
as a result, and (4) (x) with respect to any Rating Agency, the terms of the
Transactions are not modified other than parties, effective date of said
transfer, and tax payee representations of Party A (and in such case, it shall
not be a condition of such Replacement Transaction that it preserve for Party B
the economic equivalent of all payment and delivery obligations hereunder and be
in all material respects no less beneficial for Party B than those of the
Transactions), or (y) with respect to Xxxxx'x, the terms of the Transactions are
modified to a greater extent than provided in (x) but the definition of
Replacement Transaction is otherwise complied with.
(h) AMENDMENT. Notwithstanding the provisions of Section 9(b), each amendment,
modification or waiver in respect of this Agreement shall be subject to the
Rating Agency Condition with respect to each Rating Agency.
(i) RATINGS DOWNGRADE.
(i)DEFINITIONS. For purposes of each Transaction:
(A) "RATING AGENCY CONDITION" means, with respect to any action taken
or to be taken hereunder, a condition that is satisfied when the
relevant Rating Agency has confirmed in writing to the Supplemental
Interest Trust Trustee that such action will not result in withdrawal,
reduction or other adverse action with respect to any then-current
rating by the Rating Agency of the Certificates.
(B) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any
guarantor under a Qualified Guaranty, in the cases when such debt has
both short-term and long-term debt ratings and when such debt has only
long-term ratings, will be "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS" and "DISQUALIFYING RATINGS", as identified below:
Q-12
RATINGS OF PARTY A OR
GUARANTOR UNDER A QUALIFIED GUARANTY:
---------------------------------------------
HAS LONG-TERM AND HAS ONLY LONG-TERM
RATING AGENCY: SHORT-TERM RATINGS RATINGS
-------------- -------------------- ----------------------
"QUALIFYING RATINGS":
XXXXX'X: P-1 and A2 or above A1 or above
S&P: A-1 or above A+ or above
FITCH: F1 and A or above A or above
"LIMITED QUALIFYING RATINGS":
XXXXX'X: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a Qualified Guaranty is a A-2 A, A- or BBB+
Financial Institution:
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS":*
XXXXX'X: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a Qualified Guaranty is a A-3 or below BBB or below
Financial Institution:(Financial Institution)
If neither Party A nor guarantor under a Qualified Guaranty is A-2 or below A or below
a Financial Institution:(Other)
FITCH: F3 or BBB or below BBB or below
* The withdrawal by Xxxxx'x of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
(C) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance company,
structured investment vehicle or derivative product company.
(D) "QUALIFIED TRANSFEREE" means a transferee of a novation or assignment
or a party (other than Party B) that enters into another form of
Replacement Transaction that is a Reference Market-maker ("dealer" in the
definition thereof meaning a "dealer in notional principal contracts" as
defined in Treas. Reg. Section 1.1001-4) that has Qualifying Ratings or
Limited Qualifying Ratings assigned by each Rating Agency, or whose present
and future obligations owing to Party B are guaranteed pursuant to a
Qualified Guaranty.
(E) "QUALIFIED GUARANTY" means an unconditional and irrevocable guaranty of
payment (and not of collection) and the performance of the other
obligations of Party A (or a Qualified Transferee, as applicable) hereunder
by a third party that has Qualifying Ratings or Limited Qualifying Ratings
assigned by each Rating Agency ("QUALIFIED GUARANTOR") in a form that
satisfies the S&P Rating Condition and that provides, inter alia, that
payment thereunder shall be made as provided and on the conditions set
forth in Section 2(d) as modified hereunder (substituting references to
Party A as "X" with the guarantor as "X" and "this Agreement" with such
guaranty, respectively) (or, in lieu of such provisions relating to tax, a
law firm has given a legal opinion confirming that none of the guarantor's
payments to Party B under such guaranty will be subject to withholding for
Tax).
(ii) POSTING OF COLLATERAL. If Party A or any guarantor under a Qualified
Guaranty is assigned Limited Qualifying Ratings or Disqualifying Ratings by a
Rating Agency, then, within, with respect to:
Q-13
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or if such ratings exist from the time Party A becomes a party
hereto or the guarantor under a Qualified Guaranty becomes such guarantor, from
such time), and for so long as such Limited Qualifying Ratings or Disqualifying
Ratings continue, Party A shall, at its own expense, post collateral in
accordance with the Credit Support Annex.
(iii) REPLACEMENT OR GUARANTY. If Party A or any guarantor under a Qualified
Guaranty is assigned Disqualifying Ratings by a Rating Agency, then, within,
with respect to:
(1) XXXXX'X: thirty (30) Local Business Days
(2) S&P: sixty (60) calendar days
(3) FITCH: thirty (30) calendar days
thereafter, Party A shall, at its own expense, (x) novate, assign or transfer
the Transactions to or replace the Transactions with Replacement Transactions
with a Qualified Transferee, or (y) obtain a Qualified Guaranty.
(j)REGULATION AB.
(a) 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 Part 5(j) (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 Part 5(j) within 10 calendar 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.
(b) 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.
(c) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to eight (8)
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.
(d) Upon the occurrence of a Swap Disclosure Request, BNY, at its own
expense, shall (x) provide the Depositor with the Swap Financial Disclosure
in an Xxxxx-compatible format, or (y) subject to Rating Agency Condition,
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.
Q-14
(e) BNY's obligation to comply with this Paragraph 4(9) shall be suspended
as of January 1, 2008 unless, at any time, BNY receives notification from
the Depositor or the Counterparty that the Trust Fund's obligation to file
periodic reports under the Exchange Act shall continue; provided, however,
that such obligations shall not be suspended in respect of any Exchange Act
Report or amendment to an Exchange Act Report in such fiscal year which
relates to any fiscal year in which the Trust Fund was subject to the
reporting requirements of the Exchange Act. This obligation shall continue
to be suspended unless the Depositor or the Counterparty notifies BNY that
the Trust Fund's obligations to file reports under the Exchange Act has
resumed.
(k) SUPPLEMENTAL INTEREST TRUST TRUSTEE 'S CAPACITY. It is expressly understood
and agreed by the parties hereto that, insofar as this Agreement and any
confirmation evidencing a Transaction hereunder is executed by LaSalle Bank
National Association, (i) this Agreement and such confirmation are executed and
delivered by LaSalle Bank National Association, not in its individual capacity
but solely as Supplemental Interest Trust Trustee of the Supplemental Interest
Trust pursuant to the Pooling and Servicing Agreement in the exercise of the
powers and authority conferred upon and vested in it thereunder, and pursuant to
instruction set forth therein, (ii) each of the representations, undertakings
and agreements herein or therein made on behalf of the Supplemental Interest
Trust is made and intended not as a personal representation, undertaking or
agreement of LaSalle Bank National Association but is made and intended for the
purpose of binding only the Supplemental Interest Trust, 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 Agreement or
any such confirmation
(l) SUPPLEMENTAL INTEREST TRUST TRUSTEE'S REPRESENTATION. LaSalle Bank National
Association, as Supplemental Interest Trust Trustee of the Supplemental Interest
Trust, represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to enter
into this Agreement and each confirmation evidencing a Transaction
hereunder as Supplemental Interest Trust Trustee on behalf of the
Supplemental Interest Trust.
(m) [RESERVED.]
(n) [RESERVED.]
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 #000000000
Account #000-0000-000
Reference: Interest Rate Swap
PAYMENTS TO COUNTERPARTY:
LaSalle Bank
ABA# 000000000
LaSalle CHGO/CTR/BNF:/LASALLE TRUST
A/C# 725059.3
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.
Q-15
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.
Q-16
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
A. BY:
------------------------------
Name:
Title:
Q-17
The Counterparty, acting through its duly authorized signatory, hereby agrees
to, accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
SUPPLEMENTAL INTEREST TRUST TRUSTEE FOR THE SUPPLEMENTAL INTEREST TRUST RELATING
TO THE XXXXXXX XXXXX FIRST XXXXXXXX MORTGAGE LOAN TRUST, SERIES 2007-5
B. BY:
------------------------------
Name:
Title:
Q-18
SCHEDULE I
(all such dates subject to No Adjustment with respect to Fixed Rate Payer
Period End Dates and adjustment in accordance with the Following Business
Day Convention with respect to Floating Rate Payer Period End Dates)
From and including To but excluding Notional Amount (in USD)
------------------ ---------------- ------------------------
09/25/08 10/25/08 543,587,493
10/25/08 11/25/08 523,620,237
11/25/08 12/25/08 504,319,330
12/25/08 01/25/09 485,815,015
01/25/09 02/25/09 468,290,690
02/25/09 03/25/09 451,383,524
03/25/09 04/25/09 435,017,731
04/25/09 05/25/09 419,157,455
05/25/09 06/25/09 403,735,174
06/25/09 07/25/09 387,874,320
07/25/09 08/25/09 371,391,389
08/25/09 09/25/09 355,638,261
09/25/09 10/25/09 341,808,670
10/25/09 11/25/09 329,104,485
11/25/09 12/25/09 317,436,044
12/25/09 01/25/10 306,766,824
01/25/10 02/25/10 296,956,828
02/25/10 03/25/10 287,832,127
03/25/10 04/25/10 279,226,734
04/25/10 05/25/10 271,197,029
05/25/10 06/25/10 263,563,932
06/25/10 07/25/10 247,364,487
07/25/10 08/25/10 211,213,759
08/25/10 09/25/10 175,563,791
09/25/10 10/25/10 150,875,949
10/25/10 11/25/10 133,437,332
11/25/10 12/25/10 120,254,346
12/25/10 01/25/11 108,946,421
01/25/11 02/25/11 98,881,404
02/25/11 03/25/11 89,855,529
03/25/11 04/25/11 81,842,371
04/25/11 05/25/11 74,805,966
05/25/11 06/25/11 68,529,374
06/25/11 07/25/11 62,371,328
07/25/11 08/25/11 56,261,425
08/25/11 09/25/11 50,705,493
09/25/11 10/25/11 45,439,834
10/25/11 11/25/11 40,957,155
11/25/11 12/25/11 36,766,490
12/25/11 01/25/12 32,909,755
01/25/12 02/25/12 29,245,691
Q-19
02/25/12 03/25/12 25,991,237
03/25/12 04/25/12 22,885,433
04/25/12 05/25/12 20,020,499
05/25/12 06/25/12 17,373,400
06/25/12 07/25/12 14,921,468
07/25/12 08/25/12 12,511,045
08/25/12 09/25/12 10,018,245
Q-20
Exhibit A to Confirmation No. 39954
[Credit Support Annex to follow this page]
Q-21
(BILATERAL FORM) (ISDA AGREEMENTS SUBJECT TO NEW YORK LAW ONLY)
(ISDA(R) LOGO)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
Dated as of October 10, 2007
between
THE BANK OF NEW YORK and LASALLE BANK NATIONAL
ASSOCIATION, NOT IN ITS
INDIVIDUAL CAPACITY, BUT SOLELY
AS SUPPLEMENTAL INTEREST TRUST
TRUSTEE WITH RESPECT TO THE
SUPPLEMENTAL INTEREST TRUST
RELATING TO THE XXXXXXX XXXXX
FIRST FRANKLIN MORTGAGE LOAN
TRUST, SERIES 2007-5
established as a banking organization The Supplemental Interest Trust
under the laws of the State of New York is a common law trust
established under the laws of
the State of New York .
("PARTY A") ("PARTY B")
--------------------------------------- --------------------------------
This Annex supplements, forms part of, and is subject to, the Master
Agreement specified in the Confirmation(s) (BNY Ref. No. 39954), dated even date
herewith (the "AGREEMENT"), is part of the Schedule deemed incorporated therein
and is a Credit Support Document under the Master Agreement with respect to
Party A. Accordingly, the parties agree as follows:--
PARAGRAPHS 1 - 12. INCORPORATION. Paragraphs 1 through 12 inclusive of the ISDA
Credit Support Annex (Bilateral Form) (ISDA Agreements Subject to New York Law
Only) published in 1994 by the International Swaps and Derivatives Association,
Inc. are incorporated herein by reference and made a part hereof.
PARAGRAPH 13.
AMENDED AND ADDITIONAL DEFINITIONS. As used in this Annex:--
(i) SECURED PARTY, PLEDGOR. Notwithstanding anything contained in this
Annex to the contrary, (a) the term "SECURED PARTY" as used in this Annex
means only Party B, (b) the term "PLEDGOR" as used in this Annex means only
Party A, and (c) only Party A makes
Q-22
the pledge and grant in Paragraph 2, the acknowledgment in the final
sentence of Paragraph 8(a) and the representations in Paragraph 9.
(ii) RATING AGENCY AND RELATED DEFINITIONS. When more than one Rating
Agency rates the Certificates, such terms refer to each Rating Agency and
its criteria separately rather than collectively.
"RATING AGENCY" means, so long as it rates the Certificates, each of:
(1) "MOODY'S": Xxxxx'x Investors Service Inc.
(2) "S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
(3) "FITCH": Fitch, Inc., Fitch Ratings, Ltd., Derivative Fitch, Inc.,
or Derivative Fitch Ltd., or any subsidiary, or successor thereof.
"RATING AGENCY CONDITION", "QUALIFYING RATINGS", "LIMITED QUALIFYING
RATINGS", and "DISQUALIFYING RATINGS" have the same meanings as assigned in
Part 5(i)(i), notwithstanding restatement herein.
The use of the name of a Rating Agency or its use prior to such terms in a
provision indicates that such provision (or the applicable portion thereof)
applies only with respect to the requirements of such Rating Agency, and
excludes reference to the other Rating Agencies.
(iii) RATINGS: The ratings assigned or withdrawn by a Rating Agency with
respect to the unsecured and unguaranteed debt of Party A or any guarantor
under a Qualified Guaranty, in the cases when such debt has both short-term
and long-term debt ratings and when such debt has only long-term ratings,
will be "LIMITED QUALIFYING RATINGS" and "DISQUALIFYING RATINGS", as
identified below:
RATINGS OF PARTY A OR GUARANTOR
UNDER A QUALIFIED GUARANTY:
-------------------------------------
HAS LONG-TERM AND HAS ONLY LONG-
RATING AGENCY: SHORT-TERM RATINGS TERM RATINGS
-------------- -------------------- --------------
"LIMITED QUALIFYING RATINGS":
MOODY'S: P-2 or A3 A2 or A3
S&P: If Party A or guarantor under a
Qualified Guaranty is a Financial
Institution: A-2 A, A- or BBB+
FITCH: F2 or A- A-
"DISQUALIFYING RATINGS"*:
MOODY'S: P-3 or Baa1 or below Baa1 or below
S&P:
If Party A or guarantor under a
Qualified Guaranty is a Financial
Institution: A-3 or below BBB or below
If neither Party A nor guarantor under a
Qualified Guaranty is a Financial
Institution: A-2 or below A or below
FITCH: F3 or BBB or below BBB or below
* The withdrawal by by Moody's of the short-term rating, or, if there is no
short-term rating, the long-term rating, and the withdrawal by any other
Rating Agency of all ratings, will be treated as a Disqualifying Rating
unless the Rating Agency Condition is satisfied with respect thereto.
(iv) "FINANCIAL INSTITUTION" means a bank, broker/dealer, insurance
company, structured investment vehicle or derivative product company.
Q-23
(v) "LOCAL BUSINESS DAY" means: (i) any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign
currency deposits) in New York, and (ii) in relation to a Transfer of
Eligible Collateral, a day on which the clearance system agreed between the
parties for the delivery of Eligible Collateral is open for acceptance and
execution of settlement instructions (or in the case of a Transfer of Cash
or other Eligible Collateral for which delivery is contemplated by other
means, a day on which commercial banks are open for business (including
dealings for foreign exchange and foreign currency deposits) in New York
and such other places as the parties shall agree).
(vi) "CREDIT SUPPORT DELIVERY PERIOD" means, with respect to the assignment
of Limited Qualifying Ratings or Disqualifying Ratings, as the case may be,
by a Rating Agency, the period beginning within, with respect to:
(1) MOODY'S: thirty (30) Local Business Days
(2) S&P: ten (10) Local Business Days
(3) FITCH: thirty (30) calendar days
thereafter (or, in each case, if such ratings exist from the time the
Pledgor becomes a party hereto or the guarantor under a Qualified Guaranty
becomes a guarantor, from such time), and continuing for so long as such
Limited Qualifying Ratings or Disqualifying Ratings continue.
If Disqualifying Ratings are assigned after Limited Qualifying Ratings have
been assigned, collateral shall be posted in accordance with the
requirements applicable to Limited Qualifying Ratings until the Credit
Support Delivery Period with respect to the Disqualifying Ratings has
commenced.
(a) SECURITY INTEREST FOR "OBLIGATIONS." The term "OBLIGATIONS" as used in this
Annex includes the following additional obligations: Not applicable.
(b) CREDIT SUPPORT OBLIGATIONS. During the Credit Support Delivery Period,
Credit Support Amount, Value, Delivery Amount and Return Amount will be
calculated separately for each Rating Agency then rating the Certificates in
accordance with the provisions relating to such Rating Agency set forth in this
Paragraph 13(b), and the Pledgor will Transfer the highest Delivery Amount and
the Secured Party will Transfer the lowest Return Amount so calculated,
provided, that the Return Amount will be reduced to such amount as necessary so
that Transfer of a Delivery Amount will not be required immediately after the
Transfer of such Return Amount.
(i)DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.
(A) "DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a)
except that the words "upon a demand made by the Secured Party on or
promptly following a Valuation Date" shall be deleted and replaced by
the words "on each Valuation Date during the Credit Support Delivery
Period."
(B) "RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
(C) "CREDIT SUPPORT AMOUNT" in Paragraph 3(b), shall be amended in its
entirety to read as follows:
"'CREDIT SUPPORT AMOUNT' means, (x) for any Valuation Date during
the Credit Support Delivery Period, (i) the Secured Party's
Exposure for that Valuation Date, plus (ii) the Independent
Amount applicable to the Pledgor (with respect to all
Q-24
Affected Transactions), if any, minus (iii) the Pledgor's
Threshold; provided, however, that the Credit Support Amount will
be deemed to be zero whenever the calculation of the Credit
Support Amount yields a number less than zero, and shall not be
less than the Credit Support Minimum; and (y) at any other time,
None."
The calculation of the Credit Support Amount during the Credit Support
Delivery Period may be expressed in the following formula (which
summarizes but does not supersede said provisions):
Credit Support Amount = max [E + IA, 0, m]
Where:
max = the greater of; min = the lesser of
E = Exposure (i.e., the market value of the Affected Transactions)
IA = Independent Amount =
* Moody's: min [DV01 x 15 % (daily); % in Schedule 2 x N]
* Fitch: % in Schedule 3 (i.e., Volatility Cushion) x N
* S&P: 25% x E (Disqualifying Ratings only)
N = the aggregate notional amount of the Affected Transactions.
m = Credit Support Minimum (Moody's (Disqualifying Ratings only))
(ii) ELIGIBLE COLLATERAL AND VALUATION PERCENTAGE. The items and Valuation
Percentages with respect to each Rating Agency set forth in Schedule 1 will
be "ELIGIBLE COLLATERAL" and the applicable "VALUATION PERCENTAGE" for such
Rating Agency. Sub-paragraph (i)(A) of the definition of "Value" is amended
to read as follows: "(A) Cash, the face amount thereof multiplied by the
applicable Valuation Percentage; and".
(iii) OTHER ELIGIBLE SUPPORT. The following items will qualify as "OTHER
ELIGIBLE SUPPORT" for the party specified: Not Applicable.
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means with respect to the Secured Party:
Zero; and, with respect to the Pledgor for any Valuation Date: an
amount (identified separately for each Rating Agency) equal to:
(1) MOODY'S: the lesser of (x) the product of (I) if each Local
Business Day is a Valuation Date, 15, and, otherwise, 25, and
(II) with respect to each Transaction and any date of
determination, the estimated change in the mid-market value with
respect to such Transaction that would result from a one basis
point change in the relevant swap curve on such date, as
determined by the Valuation Agent in good faith and in a
commercially reasonable manner in accordance with the relevant
methodology customarily used by the Valuation Agent for such
Transaction (such estimate, the "DVO1" of the Pledgor), and (y)
the product of (I) the Notional Amount for each Transaction for
the Calculation Period which includes such Valuation Date and
(II) the applicable percentage set forth in Schedule 2.
Q-25
(2) S&P: (x) if S&P Limited Qualifying Ratings have been
assigned, zero, and (y) if S&P Disqualifying Ratings have been
assigned, the product of (I) the Secured Party's Exposure for
that Valuation Date and (II) 25%.
(3) FITCH: the product of the aggregate Notional Amount
outstanding at the beginning of the related Calculation Period
under the applicable Affected Transactions and the Fitch
Volatility Cushion determined using the table set forth in
Schedule 3.
As used herein, "INDEPENDENT AMOUNT" means the additional amount to be
added to the Secured Party's Exposure pursuant to the calculation of
Credit Support Amount at the time the Delivery Amount is required to
be delivered or transferred hereunder and does not imply or require
that a separate amount be delivered or transferred on the execution of
this Agreement or on any Trade Date or at any other time.
(B) "THRESHOLD" means for the Pledgor: zero during the Credit Support
Delivery Period and at any other time an infinite number.
(C) "CREDIT SUPPORT MINIMUM" means, with respect to each Rating
Agency, the amount identified below:
(1) MOODY'S: if Moody's Disqualifying Ratings,have been assigned,
the greater of zero and the aggregate amount of the net payments
(each such net payment ("NET PAYMENT") being the greater of zero
and the amount of the payment due to be made by the Pledgor under
Section 2(a) on a Payment date less the amount of any payment due
to be made by the Secured Party under Section 2(a) on the same
Payment Date after giving effect to any applicable netting under
Section 2(c)) with respect to all Affected Transactions due from
the Pledgor in respect of all following scheduled Payments.
(2) S&P: Zero.
(3) FITCH: Zero.
(D) "MINIMUM TRANSFER AMOUNT" means with respect to the Pledgor and
the Secured Party: $100,000; provided, that the Minimum Transfer
Amount shall be $50,000 if the aggregate principal balance of the
rated Certificates is $50,000,000 or less on the applicable Valuation
Date, and upon the occurrence and during the continuance of an Event
of Default, Termination Event, Additional Termination Event, or
Specified Condition with respect to such party shall be zero.
(E) ROUNDING. The Delivery Amount will be rounded up to the nearest
integral multiple of $10,000 and the Return Amount will be rounded
down to the nearest integral multiple of $10,000.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means, the Pledgor in all circumstances.
(ii) "VALUATION DATE" means:.
[X] each Local Business Day, or
[ ] any Local Business Day in each calendar week, which shall be the
same calendar day each week to the extent practicable, on a reasonably
consistent basis.
Q-26
provided, that, upon any assignment, transfer or novation of this Agreement
by Party A, either a daily or weekly Valuation Date may be elected by the
transferee.
(iii) "VALUATION TIME" means:
[ ] the close of business in the city of the Valuation Agent on the
Valuation Date or date of calculation, as applicable;
[X] the close of business on the Local Business Day before the
Valuation Date or date of calculation, as applicable;
provided, that (x) the calculations of Value and Exposure will be made as
of approximately the same time on the same date, and (y) upon any
assignment, transfer or novation of this Agreement by Party A, either same
day or prior day Valuation Time may be elected by the transferee.
(iv) "NOTIFICATION TIME" means 1:00 p.m., New York time, on a Local
Business Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. (i) Illegality
and (ii) Additional Termination Events will be a "SPECIFIED CONDITION" for the
Pledgor (as the Affected Party) (but not for purposes of Paragraph 8(d)), and
(iii) Tax Event and (iv) Tax Event Upon Merger will not be a "SPECIFIED
CONDITION for the Pledgor.
(e) SUBSTITUTION.
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
(ii) CONSENT. If specified here as applicable, then the Pledgor must obtain
the Secured Party's consent for any substitution pursuant to Paragraph
4(d): Applicable.
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 1:00 p.m., New York time, on the Local Business
Day following the date on which the notice is given that gives rise to a
dispute under Paragraph 5.
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support will be calculated as follows: as set forth for other
purposes in Paragraph 12.
(iii) ALTERNATIVE. The provisions of Paragraph 5 will apply, except to the
following extent: (A) pending the resolution of a dispute, Transfer of the
undisputed Value of Eligible Credit Support or Posted Credit Support
involved in the relevant demand will be due as provided in Paragraph 5 if
the demand is given by the Notification Time, but will be due on the second
Local Business Day after the demand if the demand is given after the
Notification Time; and (B) the Disputing Party need not comply with the
provisions of Paragraph 5(II)(2) if the amount to be Transferred does not
exceed the Disputing Party's Minimum Transfer Amount.
(g) HOLDING AND USING POSTED COLLATERAL.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. The Secured Party
will not be entitled to hold Posted Collateral itself, but will hold Posted
Collateral in an identifiable segregated account through a Custodian (which
may be the Supplemental Interest Trust Trustee and which shall at all times
be a financial institution as specified in the Pooling and Servicing
Agreement). If not so specified, the Custodian shall be a commercial bank
or trust company which is unaffiliated with Party B organized under the
laws of the
Q-27
United States or any state thereof, having assets of at least $10 billion
and a long term debt or a deposit rating of at least Baa2 from Moody's and
A from S&P. For so long as the Certificates are rated by S&P, any Custodian
other than the Supplemental Interest Trust Trustee shall have a short-term
debt or deposit rating of at least A-1, or, if it has no short-term rating,
a long-term debt or deposit rating of at least A+, from S&P and shall be
replaced by the Trustee within sixty (60) calendar days after it ceases to
have such ratings.
Initially, the Custodian for Party B is: LaSalle Bank National Association
(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c) will not
apply to the Secured Party; therefore, the Secured Party will not have any
of the rights specified in Paragraph 6(c)(i) or 6 (c)(ii) except that the
Secured Party may register any Posted Collateral in the name of the
Custodian or its nominee under Paragraph 6(c)(ii).
(h) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE", with respect to Eligible Collateral
in the form of Cash will be the actual rate of interest earned by the
Counterparty or the Custodian if the Cash is invested at the direction of
the Pledgor in accordance with Paragraph 13(1)(iv); otherwise the "Interest
Rate" will be, for any day, the rate opposite the caption "Federal Funds
(Effective)" for such day as published for such day in Federal Reserve
Publication H.15(519) or any successor publication as published by the
Board of Governors of the Federal Reserve System or such other rate as
agreed by the parties.
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount will
be made on the first Local Business Day of each calendar month and on any
Local Business Day that Posted Collateral in the form of Cash is
Transferred to the Pledgor pursuant to Paragraph 3(b), subject to the
receipt and availability of such funds.
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)(ii)
will apply.
(i) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT.
(i) "VALUE" with respect to Other Eligible Support and Other Posted Support
means: Inapplicable.
(ii) "TRANSFER" with respect to Other Eligible Support and Other Posted
Support means: Inapplicable.
(j) DEMANDS AND NOTICES. All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement, unless
otherwise specified here:
(i) Party A: Not applicable.
(ii) Party B: Not applicable.
(k) ADDRESSES FOR TRANSFERS.
Party A: For Cash: To be provided
For Eligible Collateral: To be provided
Party B: To be provided
(l) OTHER PROVISIONS.
Q-28
(i) TRANSFER TIMING.
(A) Paragraph 4(b) shall be deleted and replaced in its entirety by
the following paragraph: "Subject to Paragraphs 4(a) and 5 and unless
otherwise specified, if a demand for the Transfer of Eligible Credit
Support or Posted Credit Support is made by the Notification Time,
then the relevant Transfer will be made not later than the close of
business on the second Local Business Day thereafter; if a demand is
made after the Notification Time then the relevant Transfer will be
made not later than the close of business on the third Local Business
Day thereafter."
(B) Paragraph 6(d)(1) shall be amended so that the reference therein
to "the following Local Business Day" shall be replaced by reference
to "the second Local Business Day thereafter".
(ii) NO COUNTERCLAIM. A party's rights to demand and receive the Transfer
of Eligible Collateral as provided hereunder and its rights as Secured
Party against the Posted Collateral or otherwise shall be absolute and
subject to no counterclaim, set-off, deduction or defense in favor of the
Pledgor except as contemplated in Sections 2 and 6 of the Agreement and
Paragraph 8 of this Annex.
(iii) HOLDING COLLATERAL. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated account (the "SWAP
COLLATERAL ACCOUNT") and to hold, record and identify all the Posted
Collateral therein and, subject to Paragraphs 6(c) and 8(a), such Posted
Collateral shall at all times be and remain the property of the Pledgor and
shall at no time constitute the property of, or be commingled with the
property of, the Secured Party or the Custodian.
(iv) INVESTMENT OF CASH POSTED COLLATERAL. Posted Collateral in the form of
cash shall be invested in Permitted Investments as directed by the Pledgor,
with gains and losses incurred in respect of such investments to be for the
account of the Pledgor, subject to the following parameters: the Posted
Collateral in the form of cash shall be invested in such overnight (or
redeemable within two Local Business Days of demand) investments meeting at
least two of the following ratings requirements by the respective Rating
Agencies (of which one shall be S&P if the Certificates are rated by S&P)
(x) AAAm or AAAm-G by S&P, (y) Prime -1 or Aaa by Xxxxx'x, and (z)
'AAA'/'F1' by Fitch, as directed by the Pledgor (provided, that such
investment shall be held uninvested or invested at the direction of the
Secured Party if an Event of Default or an Additional Termination Event has
occurred with respect to which the Pledgor is the defaulting or sole
Affected Party and the Secured Party has designated an Early Termination
Date with respect thereto). Such instructions may be delivered as standing
instructions.
(v) RETURN OF POSTED COLLATERAL. At any time the Pledgor is required to
post collateral pursuant to Part 5(i)(ii) of the Schedule, the Pledgor
shall be obligated to transfer Eligible Collateral in accordance with the
terms of this Annex. If the Pledgor is so required to post collateral, and
thereafter ceases to be required to post collateral, under Part 5(i)(ii) of
the Schedule (and provided that no Event of Default exists with respect to
the Pledgor) or the Pledgor has made a transfer, assignment or novation of
this Agreement and all the Transactions, then the Pledgor's obligations to
transfer Eligible Collateral under this Annex will immediately cease, and
the Secured Party will, upon demand by the Pledgor, return to the Pledgor,
or cause its Custodian to return, all Posted Collateral held under this
Annex. Without prejudice to the provisions of Paragraph 8, the Secured
Party is authorized to liquidate any Posted Collateral pursuant to written
instructions from the Pledgor.
(vi) EXPENSES. Notwithstanding Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for, all transfer and
other taxes and other costs involved in the transfer and maintenance of
Eligible Collateral.
Q-29
(vii) LIMIT ON SECURED PARTY'S LIABILITY. The Secured Party will not be
liable for any losses or damages that the Pledgor may suffer as a result of
any failure by the Secured Party to perform, or any delay by it in
performing, any of its obligations under this Annex if the failure or delay
results from circumstances beyond the reasonable control of the Secured
Party or its Custodian, such as interruption or loss of computer or
communication services, labor disturbance, natural disaster or local or
national emergency.
(viii) EXTERNAL VERIFICATION OF XXXX-TO-MARKET VALUATIONS. If the long-term
or short-term senior unsecured debt of the Pledgor is rated BBB or F3 or
below by Fitch, once every month, the Pledgor will at its own expense
verify its determination of Exposure of the Transaction on the next
Valuation Date by seeking quotations from two (2) Reference Market-makers
(provided, that a Reference Market-maker may not be used more than four
times within each 12 month period) for their determination of Exposure of
the Transaction on such Valuation Date and the Valuation Agent will use the
greater of either (a) its own determination or (b) the high quotation for a
Reference Market-maker, if applicable for the next Valuation Date and cure
any deficiency in collateral value within three Local Business Days. The
Pledgor shall provide the quotations of such Reference Market-makers to
Fitch.
[Signature page immediately follows]
Q-30
IN WITNESS WHEREOF the parties have executed this Credit Support Annex on
the respective dates specified below with effect from the date on the first
page.
THE BANK OF NEW YORK LASALLE BANK NATIONAL ASSOCIATION, NOT
IN ITS INDIVIDUAL CAPACITY, BUT SOLELY
AS SUPPLEMENTAL INTEREST TRUST TRUSTEE
WITH RESPECT TO THE SUPPLEMENTAL
INTEREST TRUST RELATING TO THE XXXXXXX
XXXXX FIRST FRANKLIN MORTGAGE LOAN
TRUST, SERIES 2007-5
By: By:
--------------------------------- ------------------------------------
Name: Name:
Title: Title:
Date: Date:
Q-31
SCHEDULE 1A
ELIGIBLE COLLATERAL
XXXXX'X
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
Xxxxx'x Valuation Percentage columns:
* Column A sets out the percentage applicable when Xxxxx'x Limited Qualifying
Ratings have been assigned.
* Column B sets out the percentage applicable when Xxxxx'x Disqualifying
Ratings have been assigned.
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X )
REMAINING VALUATION VALUATION
YEARS PERCENTAGE PERCENTAGE
TO MATURITY (DAILY) (WEEKLY)
------------- ---------- ----------
NOT
ELIGIBLE COLLATERAL MORE MORE
(CASH OR SECURITIES) THAN: THAN: A B A B
-------------------- ----- ----- --- ---- --- ----
TT. U.S. Dollars (USD) Cash n/a n/a 100% 100% 100% 100%
UU. Euro Cash n/a n/a 98% 94% 97% 93%
VV. Sterling (GBP) Cash n/a n/a 98% 95% 97% 94%
WW. Floating-rate negotiable debt obligations n/a n/a 100% 99% 99% 99%
issued by the U.S. Treasury Department
after July 18, 1984 ("TREASURIES") of all
maturities
XX. Fixed-rate US Treasuries 0 1 100% 100% 100% 100%
YY. Fixed-rate Treasuries 1 2 100% 99% 100% 99%
ZZ. Fixed-rate Treasuries 2 3 100% 98% 100% 98%
AAA. Fixed-rate Treasuries 3 5 100% 97% 100% 97%
BBB. Fixed-rate Treasuries 5 7 100% 96% 100% 95%
CCC. Fixed-rate Treasuries 7 10 100% 94% 100% 94%
DDD. Fixed-rate Treasuries 10 20 100% 90% 100% 89%
EEE. Fixed-rate Treasuries 20 30 100% 88% 100% 87%
FFF. Floating-rate negotiable debt obligations n/a n/a 100% 98%% 100% 98%
of the Federal National Mortgage
Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Federal
Home Loan Banks (FHLB), Federal Farm
Credit Banks (FFCB), Tennessee Valley
Authority (TVA) (collectively, "AGENCY
SECURITIES") of all maturities
GGG. Fixed-rate Agency Securities 0 1 100% 99% 100% 99%
HHH. Fixed-rate Agency Securities 1 2 100% 99% 100% 98%
III. Fixed-rate Agency Securities 2 3 100% 98% 100% 97%
JJJ. Fixed-rate Agency Securities 3 5 100% 96% 100% 96%
Q-1A-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X )
KKK. Fixed-rate Agency Securities 5 7 100% 93% 100% 94%
LLL. Fixed-rate Agency Securities 7 10 100% 93% 100% 93%
MMM. Fixed-rate Agency Securities 10 20 100% 89% 100% 88%
NNN. Fixed-rate Agency Securities 20 30 100% 87% 100% 86%
OOO. FHLMC Certificates. Mortgage * * * * * *
participation certificates issued by
FHLMC evidencing undivided interests or
participations in pools of first lien
conventional or FHA/VA residential
mortgages or deeds of trust, guaranteed
by FHLMC, issued after July 18, 1984 and
having a remaining maturity of not more
than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years
PPP. FNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by FNMA
evidencing undivided interests in pools
of first lien mortgages or deeds of trust
on residential properties, guaranteed by
FNMA, issued after July 18, 1984 and
having a remaining maturity of not more
than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years.
QQQ. GNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by
private entities, evidencing undivided
interests in pools of first lien
mortgages or deeds of trust on single
family residences, guaranteed by the
Government National Mortgage Association
(GNMA) with the full faith and credit of
the United States, issued after July 18,
1984 and having a remaining maturity of
not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years.
RRR. Floating rate commercial mortgage-backed * * * * * *
securities rated AAA by two major rating
agencies (including S&P if S&P is a
Rating Agency hereunder) with a minimum
par or face amount of $250 million
(excluding securities issued under Rule
144A) ("COMMERCIAL MORTGAGE-BACKED
SECURITIES") having a remaining maturity
of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years.
SSS. Commercial Paper with a rating of at n/a n/a * * * *
least P-1 by Xxxxx'x and at least
Q-1A-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X )
A-1+ by S&P (if S&P is a Rating Agency
hereunder) and having a remaining
maturity of not more than 30 days.
TTT. Floating Rate Euro-denominated negotiable n/a n/a 98% 93% 97% 92%
debt obligations rated Aa3 and above by
Xxxxx'x issued or guaranteed by (a) the
Bank of England on behalf of the Treasury
of the United Kingdom; (b) the government
of France; (c) the government of Germany;
and (d) the government of Belgium ("EURO
GOVERNMENT SECURITIES") of all maturities
UUU. Fixed-Rate Euro Government Securities 0 1 98% 94% 97% 93%
VVV. Fixed-Rate Euro Government Securities 1 2 98% 93% 97% 92%
WWW. Fixed-Rate Euro Government Securities 2 3 98% 92% 97% 91%
XXX. Fixed-Rate Euro Government Securities 3 5 98% 90% 97% 89%
YYY. Fixed-Rate Euro Government Securities 5 7 98% 89% 97% 87%
ZZZ. Fixed-Rate Euro Government Securities 7 10 98% 88% 97% 86%
AAAA. Fixed-Rate Euro Government Securities 10 20 98% 84% 97% 82%
BBBB. Fixed-Rate Euro Government Securities 20 30 98% 82% 97% 80%
CCCC. Floating-Rate Sterling Pound-denominated n/a n/a 98% 93% 97% 93%
negotiable debt obligations rated Aa3 and
above by Xxxxx'x issued by the Bank of
England on behalf of the Treasury of the
United Kingdom ("GILTS") of all
maturities
DDDD. Fixed-Rate Gilts 0 1 98% 94% 97% 93%
EEEE. Fixed-Rate Gilts 1 2 98% 93% 97% 92%
FFFF. Fixed-Rate Gilts 2 3 98% 92% 97% 91%
GGGG. Fixed-Rate Gilts 3 5 98% 91% 97% 90%
HHHH. Fixed-Rate Gilts 5 7 98% 90% 97% 89%
IIII. Fixed-Rate Gilts 7 10 98% 89% 97% 88%
JJJJ. Fixed-Rate Gilts 10 20 98% 86% 97% 84%
Q-1A-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (XXXXX'X )
KKKK. Fixed-Rate Gilts 20 30 98% 84% 97% 82%
LLLL. Other Items of Credit Support approved by * * * * * *
the Rating Agency to the extent any Notes
are rated.
* Zero, or such other valuation percentages as supplied or published by
Xxxxx'x, in respect of which Xxxxx'x has delivered a ratings confirmation.
Q-1A-4
SCHEDULE 1B
ELIGIBLE COLLATERAL
S&P
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
S&P Valuation Percentage columns:
* Column A sets out the percentage to be used when S&P Limited
Qualifying Ratings have been assigned.
* Column B sets out the percentage to be used when S&P Disqualifying
Ratings have been assigned.
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
REMAINING
YEARS
TO MATURITY VALUATION VALUATION
------------- PERCENTAGE PERCENTAGE
NOT (DAILY) (WEEKLY)
ELIGIBLE COLLATERAL MORE MORE ----------- ------------
(CASH OR SECURITIES) THAN: THAN: A B A B
-------------------- ----- ----- ---- ---- ----- ----
VV. U.S. Dollars (USD) Cash n/a n/a 100% 80.0% 100% 80%
WW. EUR Cash n/a n/a 95.1% 76.1% 92.6% 74.1%
XX. Sterling (GBP) Cash n/a n/a 96.1% 76.9% 94.1% 75.3%
YY. Floating-rate negotiable debt obligations n/a n/a n/a n/a n/a n/a
issued by the U.S. Treasury Department after
July 18, 1984 ("FLOATING RATE TREASURIES") of
all maturities
ZZ. Fixed-rate negotiable debt obligations issued 0 1 98.9% 79.1% 98.0% 78.4%
by the U.S. Treasury Department after July
18, 1984 ("FIXED-RATE TREASURIES")
AAA. Fixed-rate Treasuries 1 2 98.0% 78.4% 98.0% 78.4%
BBB. Fixed-rate Treasuries 2 3 98.0% 78.4% 98.0% 78.4%
CCC. Fixed-rate Treasuries 3 5 98.0% 78.4% 98.0% 78.4%
DDD. Fixed-rate Treasuries 5 7 93.7% 75.0% 92.6% 74.1%
EEE. Fixed-rate Treasuries 7 10 92.6% 74.1% 92.6% 74.1%
FFF. Fixed-rate Treasuries 10 20 91.1% 72.9% 87.9% 70.3%
GGG. Fixed-rate Treasuries 20 30 88.6% 70.9% 84.6% 67.7%
HHH. Floating-rate negotiable debt obligations of n/a n/a * * * *
the Federal National Mortgage Association
(FNMA), Federal Home Loan Mortgage
Corporation (FHLMC), Federal Home Loan Banks
(FHLB), Federal Farm Credit Banks (FFCB),
Tennessee Valley Authority (TVA)
(collectively, "FLOATING-RATE AGENCY
SECURITIES") (all maturities)
Q-1B-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
III. Fixed-rate negotiable debt obligations of the 0 1 98.5% 78.8% 98.0% 78.4%
Federal National Mortgage Association (FNMA),
Federal Home Loan Mortgage Corporation
(FHLMC), Federal Home Loan Banks (FHLB),
Federal Farm Credit Banks (FFCB), Tennessee
Valley Authority issued after July 18, 1984
(TVA) (collectively, "FIXED-RATE AGENCY
SECURITIES")
JJJ. Fixed-rate Agency Securities 1 2 98.0% 78.4% 98.0% 78.4%
KKK. Fixed-rate Agency Securities 2 3 98.0% 78.4% 98.0% 78.4%
LLL. Fixed-rate Agency Securities 3 5 98.0% 78.4% 98.0% 78.4%
MMM. Fixed-rate Agency Securities 5 7 92.6% 74.1% 92.6% 74.1%
NNN. Fixed-rate Agency Securities 7 10 92.6% 74.1% 92..6% 74.1%
OOO. Fixed-rate Agency Securities 10 20 87.7% 70.2% 82.6% 66.1%
PPP. Fixed-rate Agency Securities 20 30 84.4% 67.5% 77.9% 62.3%
QQQ. FHLMC Certificates. Mortgage participation * * * * * *
certificates issued by FHLMC evidencing
undivided interests or participations in
pools of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, issued after July 18,
1984 and having a remaining maturity of not
more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
RRR. FNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by FNMA
evidencing undivided interests in pools of
first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA,
issued after July 18, 1984 and having a
remaining maturity of not more than 1 year
and [1-2][2-3][3-5][5-7][7-10][10-20][20-]
and not more than 30 years
SSS. GNMA Certificates. Mortgage-backed * * * * * *
pass-through certificates issued by private
entities, evidencing undivided interests in
pools of first lien mortgages or deeds of
trust on single family residences, guaranteed
by the Government National Mortgage
Association (GNMA) with the full faith and
credit of the United States, issued after
July 18, 1984 and having a remaining maturity
of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
Q-1B-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
TTT. Floating rate commercial mortgage-backed * * * * * *
securities rated AAA by two major rating
agencies (including S&P if S&P is a Rating
Agency hereunder) with a minimum par or face
amount of $250 million (excluding securities
issued under Rule 144A) ("COMMERCIAL MORTGAGE
- BACKED SECURITIES") having a remaining
maturity of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-] and
not more than 30 years
UUU. Commercial Paper with a rating of at least n/a n/a * * * *
P-1 by Xxxxx'x and at least A-1+ by S&P and
having a remaining maturity of not more than
30 days
VVV. Floating Rate Euro-denominated negotiable 0 5 * * * *
debt obligations rated AAA by S&P issued or
guaranteed by (a) the Bank of England on
behalf of the Treasury of the United Kingdom;
(b) the government of France; (c) the
government of Germany; and (d) the government
of Belgium ("EURO GOVERNMENT SECURITIES")
WWW. Floating-Rate Euro Government Securities 5 10 * * * *
XXX. Fixed-Rate Euro Government Securities 0 1 98.8% 79.0% 95.2% 76.2%
YYY. Fixed-Rate Euro Government Securities 1 2 97.9% 78.3% 95.2% 76.2%
ZZZ. Fixed-Rate Euro Government Securities 2 3 96.9% 77.5% 95.2% 76.2%
AAAA. Fixed-Rate Euro Government Securities 3 5 95.2% 76.2% 95.2% 76.2%
BBBB. Fixed-Rate Euro Government Securities 5 7 88.7% 71.0% 87.0% 69.6%
CCCC. Fixed-Rate Euro Government Securities 7 10 87.0% 69.6% 87.0% 69.6%
DDDD. Fixed-Rate Euro Government Securities 10 20 75.5% 60.4% 72.5% 58.0%
EEEE. Fixed-Rate Euro Government Securities 20 30 * * * *
FFFF. Floating-Rate Sterling Pound-denominated 0 5 * * * *
negotiable debt obligations rated AAA by S&P
issued by the Bank of England on behalf of
the Treasury of the United Kingdom ("GILTS")
GGGG. Floating-Rate Gilts 5 10 * * * *
HHHH. Fixed-Rate Gilts 0 1 * * * *
IIII. Fixed-Rate Gilts 1 2 * * * *
Q-1B-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (S&P)
JJJJ. Fixed-Rate Gilts 2 3 * * * *
KKKK. Fixed-Rate Gilts 3 5 * * * *
LLLL. Fixed-Rate Gilts 5 7 * * * *
MMMM. Fixed-Rate Gilts 7 10 * * * *
NNNN. Fixed-Rate Gilts 10 20 * * * *
OOOO. Fixed-Rate Gilts 20 30 * * * *
PPPP. Other Items of Credit Support approved by the * * * *
Rating Agency to the extent any Certificates
are rated
* Zero, or such other valuation percentages as supplied or published by S&P,
in respect of which the S&P Rating Agency Condition has been satisfied.
Q-1B-4
SCHEDULE 1C
ELIGIBLE COLLATERAL
FITCH
Valuation Date: Weekly (Percentages for Daily to be substituted on publication
or communication by Fitch.)
Denomination of Credit Support Amount: USD
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
REMAINING
YEARS
TO MATURITY
------------- VALUATION VALUATION
NOT PERCENTAGE PERCENTAGE
MORE MORE (DAILY) (WEEKLY)
ELIGIBLE COLLATERAL (CASH OR SECURITIES) THAN: THAN: (AAA RATED) (AAA RATED)
---------------------------------------- ----- ----- ----------- -----------
LLL. U.S. Dollars (USD) Cash n/a n/a 100%
MMM. EUR Cash
NNN. Sterling (GBP) Cash
OOO. Floating-rate negotiable debt obligations
issued by the U.S. Treasury Department
after July 18, 1984 ("FLOATING-RATE
TREASURIES") of all maturities n/a n/a *
PPP. Fixed-rate negotiable debt obligations
issued by the U.S. Treasury Department
after July 18, 1984 ("FIXED-RATE
TREASURIES") 0 1 99.5%
QQQ. Fixed-rate Treasuries 1 2 97.6%
RRR. Fixed-rate Treasuries 2 3 97.6%
SSS. Fixed-rate Treasuries 3 5 96.3%
TTT. Fixed-rate Treasuries 5 7 95.3%
UUU. Fixed-rate Treasuries 7 10 93.9%
VVV. Fixed-rate Treasuries 10 15 92.6%
WWW. Fixed-rate Treasuries 15 30 * *
XXX. Floating-rate negotiable debt obligations of
the Federal National Mortgage Association
(FNMA), Federal Home Loan Mortgage Corporation
(FHLMC), Federal Home Loan Banks (FHLB),
Federal Farm Credit Banks (FFCB), Tennessee
Valley Authority (TVA) (collectively,
"FLOATING-RATE AGENCY SECURITIES") of all
maturities n/a n/a * *
YYY. Fixed-Rate negotiable debt obligations of the
Federal National Mortgage Association (FNMA),
Federal Home Loan Mortgage Corporation
(FHLMC), Federal Home Loan Banks (FHLB),
Federal Farm Credit Banks (FFCB), Tennessee
Valley Authority (TVA) issued after July 18,
1984. (collectively, "FIXED-RATE AGENCY
SECURITIES") 0 1 * *
ZZZ. Fixed-rate Agency Securities 1 2 * *
AAAA. Fixed-rate Agency Securities 2 3 * *
Q-1C-1
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
BBBB. Fixed-rate Agency Securities 3 5 * *
CCCC. Fixed-rate Agency Securities 5 7 * *
DDDD. Fixed-rate Agency Securities 7 10 * *
EEEE. Fixed-rate Agency Securities 10 15 * *
FFFF. Fixed-rate Agency Securities 20 30 * *
GGGG. FHLMC Certificates. Mortgage participation
certificates issued by FHLMC evidencing
undivided interests or participations in pools
of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, issued after July 18,
1984 and having a remaining maturity of not
more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-30] years * *
HHHH. FNMA Certificates. Mortgage-backed
pass-through certificates issued by FNMA
evidencing undivided interests in pools of
first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA,
issued after July 18, 1984 and having a
remaining maturity of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-30] years * *
IIII. GNMA Certificates. Mortgage-backed
pass-through certificates issued by private
entities, evidencing undivided interests in
pools of first lien mortgages or deeds of
trust on single family residences,
guaranteed by the Government National
Mortgage Association (GNMA) with the full
faith and credit of the United States, issued
after July 18, 1984 and having a remaining
maturity of not more than 1 year and
[1-2][2-3][3-5][5-7][7-10][10-20][20-30] years * *
JJJJ. Floating rate commercial mortgage-backed
securities rated AAA by two major rating
agencies with a minimum par or face amount of
$250 million (excluding securities issued
under Rule 144A) ("COMMERCIAL MORTGAGE-BACKED
SECURITIES") having a remaining maturity of
[1-2][2-3][3-5][5-7][7-10][10-20][20- 30]
years * *
KKKK. Commercial Paper with a rating of at least
F-1+ by Fitch and having a remaining maturity
of not more than 1 year denominated in USD,
EUR or GBP 99.5%
LLLL. Floating-Rate Sterling Pound-denominated
negotiable debt obligations issued by the Bank
of England on behalf of the Treasury of the
United Kingdom ("GILTS") of all maturities * * * *
MMMM. Fixed-Rate Gilts 0 1 99.3%
Q-1C-2
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
NNNN. Fixed-Rate Gilts 1 2 97.8%
OOOO. Fixed-Rate Gilts 2 3 97.8%
PPPP. Fixed-Rate Gilts 3 5 96.6%
QQQQ. Fixed-Rate Gilts 5 7 95.7%
RRRR. Fixed-Rate Gilts 7 10 94.0%
SSSS. Fixed-Rate Gilts 10 15 92.8%
TTTT. Fixed-Rate Gilts 15 30 * *
UUUU. Floating-Rate Euro-denominated negotiable debt
obligations rated Aa3 and above by Xxxxx'x
issued or guaranteed by the government of
France ("OATS") of all maturities n/a n/a * *
VVVV. Fixed-Rate Oats 0 1 98.8%
WWWW. Fixed-Rate Oats 1 2
XXXX. Fixed-Rate Oats 2 3 98.2%
YYYY. Fixed-Rate Oats 3 5 98.2%
ZZZZ. Fixed-Rate Oats 5 7 97.0%
AAAAA. Fixed-Rate Oats 7 10 96.0%
BBBBB. Fixed-Rate Oats 10 15 94.7%
CCCCC. Fixed-Rate Oats 15 30 * *
DDDDD. Floating-Rate Euro-denominated negotiable debt
obligations rated Aa3 and above by Xxxxx'x
issued or guaranteed by the government of
Germany ("Bunds") of all maturities n/a n/a * *
EEEEE. Fixed-Rate Bunds 0 1 99.3%
FFFFF. Fixed-Rate Bunds 1 2 98.1%
GGGGG. Fixed-Rate Bunds 2 3 98.1%
HHHHH. Fixed-Rate Bunds 3 5 96.9%
IIIII. Fixed-Rate Bunds 5 7 96.2%
JJJJJ. Fixed-Rate Bunds 7 10 95.1%
KKKKK. Fixed-Rate Bunds 10 15 94.2%
LLLLL. Fixed-Rate Bunds 15 30 * *
MMMMM. Floating-Rate Euro-denominated negotiable debt
obligations rated Aa3 and above by Moody's
issued or guaranteed by the government of
Belgium ("Olos") of all maturities n/a n/a
NNNNN. Fixed-Rate Olos 0 1 99.3%
OOOOO. Fixed-Rate Olos 1 2 98.1%
PPPPP. Fixed-Rate Olos 2 3 98.1%
QQQQQ. Fixed-Rate Olos 3 5 96.9%
RRRRR. Fixed-Rate Olos 5 7 96.2%
SSSSS. Fixed-Rate Olos 7 10 95.1%
Q-1C-3
ELIGIBLE COLLATERAL & VALUATION PERCENTAGES (FITCH)
TTTTT. Fixed-Rate Olos 10 15 94.2%
UUUUU. Fixed-Rate Olos 15 30 * *
VVVVV. Other Items of Credit Support approved by the
Rating Agency to the extent any Certificates
are rated * *
* Zero, or such other valuation percentages as supplied or published by
Fitch, in respect of which Fitch has delivered a ratings confirmation.
In addition to (and if not set forth in) the foregoing table, the following
items will constitute Eligible Collateral, at the valuation percentages
indicated (weekly valuation basis) or to be supplied or as published by Fitch
(daily valuation basis) (assuming the notes to be denominated in the currency
indicated):
VALUATION PERCENTAGES FOR GOVERNMENT BONDS (FITCH)
(Assuming Weekly Posting of Collateral)
REMAINING YEARS
TO MATURITY
---------------- NOTES' RATING (%)
MORE NOT MORE ---------------------------
REGION CURRENCY THAN: THAN: 'AAA' 'AA' 'A' 'BBB'
------ -------- ----- -------- ----- ---- ---- -----
Europe EUR 0 1 99.6 99.7 99.8 99.8
Europe EUR 1 3 98.7 99.1 99.3 99.4
Europe EUR 3 5 98.0 98.6 98.9 99.1
Europe EUR 5 7 97.5 98.2 98.6 98.9
Europe EUR 7 10 96.8 97.7 98.2 98.6
Europe EUR 10 15 95.9 97.1 97.7 98.2
U.K. GBP 0 1 99.6 99.7 99.8 99.8
U.K. GBP 1 3 98.5 99.1 99.3 99.4
U.K. GBP 3 5 97.9 98.6 98.9 99.1
U.K. GBP 5 7 97.2 98.2 98.6 98.9
U.K. GBP 7 10 96.7 97.7 98.2 98.5
U.K. GBP 10 15 95.7 97.0 97.6 98.1
Q-1C-4
U.S. USD 0 1 99.5 99.6 99.7 99.8
U.S. USD 1 3 98.2 98.7 99.0 99.2
U.S. USD 3 5 96.6 97.9 98.4 98.7
U.S. USD 5 7 95.3 97.3 97.9 98.3
U.S. USD 7 10 93.9 96.4 97.2 97.7
U.S. USD 10 15 92.7 95.5 96.5 97.1
Q-1C-5
SCHEDULE 2
XXXXX'X INDEPENDENT AMOUNT PERCENTAGES
Valuation Date (and Valuation Percentage column): Daily
Denomination of Credit Support Amount: USD
The following percentages shall be used in the calculation of the Moody's
Independent Amount:
* Column A: LIMITED QUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE:
Percentage to be used when Moody's Limited Qualifying Ratings have
been assigned. Applies to any Transaction.
* Column B: DISQUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE (TRANSACTION
SPECIFIC XXXXXX):
Percentage to be used when Moody's Disqualifying Ratings have been
assigned. Applies to any Transaction that is an interest rate cap,
interest rate floor or interest rate swaption, or that is an interest
rate swap the notional amount of which is "balance guaranteed" or, for
any Calculation Period, otherwise is not a specific dollar amount that
is fixed at the inception of the Transaction (a "TRANSACTION-SPECIFIC
HEDGE").
* Column C: DISQUALIFYING RATINGS INDEPENDENT AMOUNT PERCENTAGE
(NON-TRANSACTION SPECIFIC XXXXXX):
Percentage to be used when Moody's Disqualifying Ratings have been
assigned.
Applies to any Transaction that is not a Transaction-Specific Hedge.
WEIGHTED AVERAGE LIFE OF MOODY'S INDEPENDENT
TRANSACTION IN YEARS AMOUNT PERCENTAGES
------------------------- -------------------
MORE THAN NOT MORE THAN A B C
--------- ------------- ---- ----- ----
0 1 0.15% 0.65% 0.50%
1 2 0.30% 1.30% 1.00%
2 3 0.40% 1.90% 1.50%
3 4 0.60% 2.50% 1.90%
4 5 0.70% 3.10% 2.40%
5 6 0.80% 3.60% 2.80%
6 7 1.00% 4.20% 3.20%
7 8 1.10% 4.70% 3.60%
8 9 1.20% 5.20% 4.00%
9 10 1.30% 5.70% 4.40%
10 11 1.40% 6.10% 4.70%
11 12 1.50% 6.50% 5.00%
12 13 1.60% 7.00% 5.40%
13 14 1.70% 7.40% 5.70%
14 15 1.80% 7.80% 6.00%
15 16 1.90% 8.20% 6.30%
16 17 2.00% 8.60% 6.60%
17 18 2.00% 9.00% 6.90%
Q-2-1
18 19 2.00% 9.40% 7.20%
19 20 2.00% 9.70% 7.50%
20 21 2.00% 10.00% 7.80%
21 22 2.00% 10.00% 8.00%
22 30 2.00% 10.00%
Q-2-2
SCHEDULE 3
FITCH VOLATILITY CUSHION
Valuation: Daily
Denomination of Credit Support Amount: USD
The Fitch Volatility Cushion will be determined using the following tables
(provided that percentages assuming daily posting of collateral, based on
assumptions in effect on the date hereof, are to be substituted on publication
or communication by Fitch.):
VOLATILITY CUSHIONS FOR INTEREST RATE SWAPS AND COLLARS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
BASIS ---------------------------------------------------------
CURRENCY NOTES' RATHING SWAP 1 2 3 4 5 6 7 8 9 10
-------- --------------- ----- --- --- --- --- --- --- --- --- --- ---
USD 'AA-' or Better 0.19 0.6 1.6 2.6 3.4 4.2 4.8 5.5 5.9 6.4 7.0
USD 'A+/A' 0.10 0.3 0.8 1.3 1.7 2.1 2.4 2.8 3.0 3.3 3.6
USD 'A-/BBB+' 0.07 0.2 0.6 1.0 1.3 1.6 1.9 2.1 2.3 2.5 2.7
EUR 'AA-' or Better 0.11 0.4 1.0 1.6 2.1 2.5 2.8 3.1 3.4 3.6 3.9
EUR 'A+/A' 0.07 0.2 0.6 1.0 1.3 1.5 1.7 1.9 2.1 2.2 2.4
EUR 'A-/BBB+' 0.05 0.2 0.5 0.7 1.0 1.1 1.3 1.4 1.6 1.7 1.8
GBP 'AA-' or Better 0.12 0.4 1.1 1.6 2.0 2.4 2.7 3.0 3.2 3.5 4.0
GBP 'A+/A' 0.07 0.3 0.6 0.9 1.2 1.4 1.5 1.8 1.9 2.0 2.3
GBP 'A-/BBB+' 0.05 0.2 0.5 0.7 0.9 1.1 1.2 1.4 1.5 1.6 1.8
VOLATILITY CUSHIONS FOR INTEREST RATE CAPS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
---------------------------------------------------------
CURRENCY NOTES' RATING 1 2 3 4 5 6 7 8 9 10
-------- --------------- --- --- --- --- --- --- --- --- --- ---
USD 'AA-' or Better 0.4 1.3 2.1 2.8 3.3 4.0 4.0 4.3 4.5 5.0
USD 'A+/A' 0.3 0.8 1.3 1.7 1.8 2.4 2.4 2.4 2.5 2.5
Q-3-2
USD 'A-/BBB+' 0.2 0.6 0.9 1.2 1.2 1.6 1.6 1.8 1.8 1.9
EUR 'AA-' or Better 0.3 0.8 1.3 1.5 1.9 1.9 2.1 2.2 2.4 2.4
EUR A+/A 0.2 0.6 0.9 1.2 1.3 1.4 1.6 1.6 1.7 1.7
EUR 'A-/BBB+' 0.2 0.5 0.7 0.9 1.1 1.2 1.2 1.3 1.3 1.3
GBP 'AA-' or Better 0.4 1.0 1.3 1.7 1.7 1.7 2.0 2.2 2.2 2.2
GBP 'A+/A' 0.2 0.6 0.8 1.0 1.1 1.1 1.3 1.5 1.5 1.5
GBP 'A-/BBB+' 0.2 0.4 0.6 0.8 0.9 0.9 1.0 1.2 1.2 1.2
VOLATILITY CUSHIONS FOR CROSS-CURRENCY SWAPS
(%, Assuming Weekly Posting of Collateral)
WEIGHTED AVERAGE LIFE (YEARS)
BASIS ---------------------------------------------------------
CURRENCY NOTES' RATING SWAP 1 2 3 4 5 6 7 8 9 10
-------- --------------- ----- --- --- --- --- --- --- --- --- --- ---
EUR/GBP 'AA-' or Better 4.6 4.7 4.8 4.9 5.1 5.3 5.4 5.6 5.7 5.8 6.0
EUR/GBP 'A+/A' 3.7 3.8 3.8 4.0 4.1 4.2 4.4 4.5 4.6 4.7 4.9
EUR/GBP 'A-/BBB+' 3.0 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9
EUR/USD 'AA-' or Better 8.0 8.1 8.3 8.6 8.8 9.0 9.1 9.3 9.4 9.5 9.7
EUR/USD 'A+/A' 5.1 5.2 5.3 5.5 5.6 5.8 5.9 6.0 6.0 6.1 6.2
EUR/USD 'A-/BBB+' 4.3 4.4 4.5 4.7 4.8 4.9 5.0 5.1 5.1 5.2 5.3
GBP/USD 'AA-' or Better 6.4 6.4 6.5 6.6 6.7 6.8 6.9 7.1 7.2 7.3 7.5
GBP/USD 'A+/A' 4.2 4.2 4.3 4.3 4.4 4.5 4.5 4.6 4.7 4.8 4.9
GBP/USD 'A-/BBB+' 3.4 3.4 3.5 3.5 3.6 3.6 3.7 3.8 3.8 3.9 4.0
Q-3-2
EXHIBIT R
FORM OF ASSESSMENT OF COMPLIANCE
1. [Name of Servicing Entity] ("XYZ") is responsible for assessing compliance
with the servicing criteria applicable to it under paragraph (d) of Item
1122 of Regulation AB, as of and for the 12-month period ending [December
31, _____] (the "Reporting Period"), as set forth in Appendix ____ hereto.
The transactions covered by this report are attached hereto as Appendix B
and include asset-backed securities transactions for which the undersigned
servicing entity has acted as a servicer involving residential mortgage
loans (the "Platform").The transactions covered by this report include
asset-backed securities transactions [for which XYZ acted as [master
servicer, servicer, trustee, securities administrator, custodian] (the
"Platform");
2. XYZ has engaged certain vendors (the "Vendors") to perform specific,
limited or scripted activities, and XYZ elects to take responsibility for
assessing compliance with the servicing criteria or portion of the
servicing criteria applicable to such Vendors' activities as set forth in
Appendix ___ hereto;
3. Except as set forth in paragraph 4 below, XYZ used the criteria set forth
in paragraph (d) of Item 1122 of Regulation AB to assess the compliance
with the applicable servicing criteria;
4. The criteria referred to as "inapplicable servicing criteria" on Appendix
___ hereto are inapplicable to XYZ based on the activities it performs,
directly or through its Vendors, with respect to the Platform;
5. XYZ has complied, in all material respects, with the applicable servicing
criteria as of [December 31, _____] and for the Reporting Period with
respect to the Platform taken as a whole[, except as described on Appendix
B hereto];
6. XYZ has not identified and is not aware of any material instance of
noncompliance by the Vendors with the applicable servicing criteria as of
[December 31, _____] and for the Reporting Period with respect to the
Platform taken as a whole [, except as described on Appendix ____ hereto];
7. XYZ has not identified any material deficiency in its policies and
procedures to monitor the compliance by the Vendors with the applicable
servicing criteria as of [December 31, ______] and for the Reporting Period
with respect to the Platform taken as a whole [, except as described on
Appendix B hereto]; and
8. [_____________], a registered public accounting firm, has issued an
attestation report on XYZ's assessment of compliance with the applicable
servicing criteria for the Reporting Period.
[Date of Certification] [Name of Servicing Entity]
By:
------------------------------------
Name:
Title:
R-1
EXHIBIT S
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS UNLESS OTHERWISE NOTED)
DEFINITIONS KEY:
PRIMARY SERVICER - transaction party having borrower contact X - obligation
TRUSTEE - fiduciary of the transaction and safe keeper of certain pool assets
CUSTODIAN - safe keeper of certain pool assets
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are X X Servicer and
instituted to monitor any Trustee each
performance or other triggers and responsible only to
events of default in accordance the extent that
with the transaction agreements. each party, as
applicable, has
actual knowledge or
written notice with
respect to parties
other than itself.
1122(d)(1)(ii) If any material servicing IF APPLICABLE IF
activities are outsourced to third FOR A APPLICABLE
parties, policies and procedures TRANSACTION FOR A
are instituted to monitor the PARTICIPANT TRANSACTION
third party's performance and PARTICIPANT
compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the N/A N/A
transaction agreements to maintain
a back-up servicer for the Pool
Assets are maintained.
1122(d)(1)(iv) A fidelity bond and errors and X
omissions policy is in effect on
the party participating in the
servicing function throughout the
reporting period in the amount of
coverage required by and otherwise
in accordance with the terms of
the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are X X Servicer and
deposited into the appropriate Trustee each
custodial bank accounts and responsible only
related bank clearing accounts no for deposits into
more than two business the accounts held
by it.
S-1
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
days following receipt, or such
other number of days specified in
the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire X X Servicer disburses
transfer on behalf of an obligor funds to trustee.
or to an investor are made only by Trustee disburses
authorized personnel. funds to
certificateholders.
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 Servicer needs to
transaction, such as cash reserve provide only if it
accounts or accounts established is deemed that the
as a form of over related collection
collateralization, are separately account is subject
maintained (e.g., with respect to to this criteria.
commingling of cash) as set forth
in the transaction agreements.
1122(d)(2)(v) Each custodial account is X X
maintained at a federally insured
depository institution as set
forth in the transaction
agreements. For purposes of this
criterion, "federally insured
depository institution" with
respect to a foreign financial
institution means a foreign
financial institution that meets
the requirements of Rule
13k-1(b)(1) of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so X X
as to 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
S-2
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
1122(d)(3)(i) Reports to investors, including (A), (B) & X
those to be filed with the (D) ONLY
Commission, are maintained in
accordance with the transaction
agreements and applicable
Commission requirements.
Specifically, such reports (A) are
prepared in accordance with
timeframes and other terms set
forth in the transaction
agreements; (B) provide
information calculated in
accordance with the terms
specified in the transaction
agreements; (C) are filed with the
Commission as required by its
rules and regulations; and (D)
agree with investors' or the
trustee's records as to the total
unpaid principal balance and
number of Pool Assets serviced by
the Servicer.
1122(d)(3)(ii) Amounts due to investors are X X Servicer remits
allocated and remitted in cash and loan level
accordance with timeframes, data to Trustee
distribution priority and other based on timelines
terms set forth in the transaction established in the
agreements. Pooling and
Servicing
Agreement. The
Trustee is
responsible for the
allocation of funds
to
Certificateholders
using the
appropriate
distribution
priority as
established by the
Pooling and
Servicing Agreement.
1122(d)(3)(iii) Disbursements made to an investor X X Trustee disburses
are posted within two business funds to
days to the Servicer's investor Certificateholders.
records, or such other number of
days specified in the transaction
agreements.
1122(d)(3)(iv) Amounts remitted to investors per X X Servicer remits
the investor reports agree with funds and provides
cancelled checks, or other form of certain investor
payment, or custodial bank reports to Trustee
statements. within guidelines
and timeframes
established in
Pooling and
Servicing
Agreement.
Trustee disburses
funds to
certificateholders.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool X X Servicer shall not
assets is maintained as required attest to
by the transaction agreements or performance of
related pool obligations of the
S-3
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
asset documents. Custodian under the
transaction
agreements.
1122(d)(4)(ii) Pool assets and related documents X X Custodian
are safeguarded as required by the responsibility with
transaction agreements. respect to the
Mortgage Files
1122(d)(4)(iii) Any additions, removals or X X Trustee shall only
substitutions to the asset pool review, not
are made, reviewed and approved in approve, such
accordance with any conditions or additions, removals
requirements in the transaction or substitutions in
agreements. accordance with the
transaction
agreements.
1122(d)(4)(iv) Payments on pool assets, including X
any payoffs, made in accordance
with the related pool asset
documents are posted to the
Servicer's obligor records
maintained no more than two
business days after receipt, or
such other number of days
specified in the transaction
agreements, and allocated to
principal, interest or other items
(e.g., escrow) in accordance with
the related pool asset documents.
1122(d)(4)(v) The Servicer's records regarding X
the 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 X
or status of an obligor's pool
assets (e.g., loan modifications
or re-agings) are made, reviewed
and approved by authorized
personnel in accordance with the
transaction agreements and related
pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery X
actions (e.g., forbearance plans,
modifications and deeds in lieu of
foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded
in accordance with the timeframes
or other requirements established
by the transaction agreements.
1122(d)(4)(viii) Records documenting collection X
efforts are maintained during the
period a pool asset is delinquent
in accordance with the transaction
S-4
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
agreements. Such records are
maintained on at least a monthly
basis, or such other period
specified in the transaction
agreements, and describe the
entity's activities in monitoring
delinquent pool assets including,
for example, phone calls, letters
and payment rescheduling plans in
cases where delinquency is deemed
temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates or X
rates 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 X
for an obligor (such as escrow
accounts): (A) such funds are
analyzed, in accordance with the
obligor's pool asset documents, on
at least an annual basis, or such
other period specified in the
transaction agreements; (B)
interest on such funds is paid, or
credited, to obligors in
accordance with applicable pool
asset documents and state laws;
and (C) such funds are returned to
the obligor within 30 calendar
days of full repayment of the
related pool assets, or such other
number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an X Servicing function
obligor (such as tax or insurance participant
payments) are made on or before responsibility
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 X Servicing function
connection with any payment to be participant
made on behalf of an obligor are responsibility
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
S-5
HOME LOAN
SERVICES, LASALLE
REGULATION AB INC. BANK ADDITIONAL
REFERENCE SERVICING CRITERIA (SERVICER) (TRUSTEE) INFORMATION
---------------- ---------------------------------- ------------- ----------- ---------------------
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.
S-6
EXHIBIT T
FORM OF XXXXXXXX-XXXXX CERTIFICATIONS
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Home Loan Services, Inc.
000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust, Series 2007-5,
Mortgage Loan Asset-Backed Certificates
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, subservicer, co-servicer, depositor or trustee].]
T-1
Date:
--------------------------
--------------------------------
[Signature]
[Title]
T-2
EXHIBIT U
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[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 - Xxxxxxx Xxxxx First
Franklin Mortgage Loan Trust, Series 2007-5
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of September 1,
2007, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Home Loan
Services, Inc., as servicer, and LaSalle Bank National Association, as
trustee, relating to Xxxxxxx Xxxxx First Xxxxxxxx Mortgage Loan Trust,
Series 2007-5, Mortgage Loan Asset-Backed Certificates
I, [identify name of certifying individual], [title of certifying individual] of
Home Loan Services, Inc. (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:
Home Loan Services, Inc.,
as Servicer
By:
Name:
Title:
U-1
EXHIBIT V
FORM OF DELINQUENCY REPORT
STANDARD FILE LAYOUT - DELINQUENCY REPORTING
(1) COLUMN/HEADER NAME (2) DESCRIPTION (3) DECIMAL (4) FORMAT COMMENT
---------------------- ---------------------------------------------------------- ----------- ----------------------
(5) SERVICER_LOAN_NBR (6) A unique number assigned to a loan by the (7) (8)
Servicer. This may be different than the
LOAN_NBR
(9) LOAN_NBR (10) A unique identifier assigned to each loan by the (11) (12)
originator.
(13) CLIENT_NBR (14) Servicer Client Number (15) (16)
(17) SERV_INVESTOR_NBR (18) Contains a unique number as assigned by an external (19) (20)
servicer to identify a group of loans in
their system.
(21) BORROWER_FIRST_NAME (22) First Name of the Borrower. (23) (24)
(25) BORROWER_LAST_NAME (26) Last name of the borrower. (27) (28)
(29) PROP_ADDRESS (30) Street Name and Number of Property (31) (32)
(33) PROP_STATE (34) The state where the property located. (35) (36)
(37) PROP_ZIP (38) Zip code where the property is located. (39) (40)
(41) BORR_NEXT_PAY_DUE_DATE (42) The date that the borrower's next payment is due to (43) (44) MM/DD/YYYY
the servicer at the end of processing
cycle, as reported by Servicer.
(45) LOAN_TYPE (46) Loan Type (i.e. FHA, VA, Conv) (47) (48)
(49) BANKRUPTCY_FILED_DATE (50) The date a particular bankruptcy claim was filed. (51) (52) MM/DD/YYYY
(53) BANKRUPTCY_CHAPTER_CODE (54) The chapter under which the bankruptcy was filed. (55) (56)
(57) BANKRUPTCY_CASE_NBR (58) The case number assigned by the court to the (59) (60)
bankruptcy filing.
V-1
(61) POST_PETITION_DUE_DATE (62) The payment due date once the bankruptcy has been (63) (64) MM/DD/YYYY
approved by the courts
(65) BANKRUPTCY_DCHRG_DISM_DATE (66) The Date The Loan Is Removed From Bankruptcy. (67) (68) MM/DD/YYYY
Either by Dismissal, Discharged and/or a
Motion For Relief Was Granted.
(69) LOSS_MIT_APPR_DATE (70) The Date The Loss Mitigation Was Approved By The (71) (72) MM/DD/YYYY
Servicer
(73) LOSS_MIT_TYPE (74) The Type Of Loss Mitigation Approved For A Loan (75) (76)
Such As;
(77) LOSS_MIT_EST_COMP_DATE (78) The Date The Loss Mitigation /Plan Is Scheduled To (79) (80) MM/DD/YYYY
End/Close
(81) LOSS_MIT_ACT_COMP_DATE (82) The Date The Loss Mitigation Is Actually Completed (83) (84) MM/DD/YYYY
(85) FRCLSR_APPROVED_DATE (86) The date DA Admin sends a letter to the servicer (87) (88) MM/DD/YYYY
with instructions to begin foreclosure
proceedings.
(89) ATTORNEY_REFERRAL_DATE (90) Date File Was Referred To Attorney to Pursue (91) (92) MM/DD/YYYY
Foreclosure
(93) FIRST_LEGAL_DATE (94) Notice of 1st legal filed by an Attorney in a (95) (96) MM/DD/YYYY
Foreclosure Action
(97) FRCLSR_SALE_EXPECTED_DATE (98) The date by which a foreclosure sale is expected to (99) (100) MM/DD/YYYY
occur.
(101) FRCLSR_SALE_DATE (102) The actual date of the foreclosure sale. (103) (104) MM/DD/YYYY
(105) EVICTION_START_DATE (106) The date the servicer initiates eviction of the (107) (108) MM/DD/YYYY
borrower.
(109) EVICTION_COMPLETED_DATE (110) The date the court revokes legal possession of the (111) (112) MM/DD/YYYY
property from the borrower.
(113) LIST_PRICE (114) The price at which an REO property is marketed. (115)2 (116) No commas(,) or
dollar signs ($)
V-2
(117) LIST_DATE (118) The date an REO property is listed at a particular (119) (120) MM/DD/YYYY
price.
(121) OFFER_AMT (122) The dollar value of an offer for an REO property. (123)2 (124) No commas(,) or
dollar signs ($)
(125) OFFER_DATE_TIME (126) The date an offer is received by DA Admin or by the (127) (128) MM/DD/YYYY
Servicer.
(129) REO_CLOSING_DATE (130) The date the REO sale of the property is scheduled (131) (132) MM/DD/YYYY
to close.
(133) REO_ACTUAL_CLOSING_DATE (134) Actual Date Of REO Sale (135) (136) MM/DD/YYYY
(137) OCCUPANT_CODE (138) Classification of how the property is occupied. (139) (140)
(141) PROP_CONDITION_CODE (142) A code that indicates the condition of the property. (143) (144)
(145) PROP_INSPECTION_DATE (146) The date a property inspection is performed. (147) (148) MM/DD/YYYY
(149) APPRAISAL_DATE (150) The date the appraisal was done. (151) (152) MM/DD/YYYY
(153) CURR_PROP_VAL (154) The current "as is" value of the property based on (155)2 (156)
brokers price opinion or appraisal.
(157) IF APPLICABLE: (158) (159) (160)
(161) DELINQ_STATUS_CODE (162) FNMA Code Describing Status of Loan (163) (164)
(165) DELINQ_REASON_CODE (166) The circumstances which caused a borrower to stop (167) (168)
paying on a loan. Code indicates the
reason why the loan is in default for this
cycle.
(169) MI_CLAIM_FILED_DATE (170) Date Mortgage Insurance Claim Was Filed With (171) (172) MM/DD/YYYY
Mortgage Insurance Company.
(173) MI_CLAIM_AMT (174) Amount of Mortgage Insurance Claim Filed (175) (176) No commas(,) or
dollar signs ($)
V-3
(177) MI_CLAIM_PAID_DATE (178) Date Mortgage Insurance Company Disbursed Claim (179) (180) MM/DD/YYYY
Payment
(181) MI_CLAIM_AMT_PAID (182) Amount Mortgage Insurance Company Paid On Claim (183)2 (184) No commas(,) or
dollar signs ($)
(185) POOL_CLAIM_FILED_DATE (186) Date Claim Was Filed With Pool Insurance Company (187) (188) MM/DD/YYYY
(189) POOL_CLAIM_AMT (190) Amount of Claim Filed With Pool Insurance Company (191)2 (192) No commas(,) or
dollar signs ($)
(193) POOL_CLAIM_PAID_DATE (194) Date Claim Was Settled and The Check Was Issued By (195) (196) MM/DD/YYYY
The Pool Insurer
(197) POOL_CLAIM_AMT_PAID (198) Amount Paid On Claim By Pool Insurance Company (199)2 (200) No commas(,) or
dollar signs ($)
(201) FHA_PART_A_CLAIM_FILED_DATE (202) Date FHA Part A Claim Was Filed With HUD (203) (204) MM/DD/YYYY
(205) FHA_PART_A_CLAIM_AMT (206) Amount of FHA Part A Claim Filed (207)2 (208) No commas(,) or
dollar signs ($)
(209) FHA_PART_A_CLAIM_PAID_DATE (210) Date HUD Disbursed Part A Claim Payment (211) (212) MM/DD/YYYY
(213) FHA_PART_A_CLAIM_PAID_AMT (214) Amount HUD Paid on Part A Claim (215)2 (216) No commas(,) or
dollar signs ($)
(217) FHA_PART_B_CLAIM_FILED_DATE (218) Date FHA Part B Claim Was Filed With HUD (219) (220) MM/DD/YYYY
(221) FHA_PART_B_CLAIM_AMT (222) Amount of FHA Part B Claim Filed (223)2 (224) No commas(,) or
dollar signs ($)
(225) FHA_PART_B_CLAIM_PAID_DATE (226) Date HUD Disbursed Part B Claim Payment (227) (228) MM/DD/YYYY
(229) FHA_PART_B_CLAIM_PAID_AMT (230) Amount HUD Paid on Part B Claim (231)2 (232) No commas(,) or
dollar signs ($)
V-4
(233) VA_CLAIM_FILED_DATE (234) Date VA Claim Was Filed With the Veterans Admin (235) (236) MM/DD/YYYY
(237) VA_CLAIM_PAID_DATE (238) Date Veterans Admin. Disbursed VA Claim Payment (239) (240) MM/DD/YYYY
(241) VA_CLAIM_PAID_AMT (242) Amount Veterans Admin. Paid on VA Claim (243)2 (244) No commas(,) or
dollar signs ($)
V-5
STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
ASUM - Approved Assumption
BAP - Borrower Assistance Program
CO - Charge Off
DIL - Deed-in-Lieu
FFA - Formal Forbearance Agreement
MOD - Loan Modification
PRE - Pre-Sale
SS - Short Sale
MISC - Anything else approved by the PMI or Pool Insurer
NOTE: LaSalle Bank National Association will accept alternative Loss Mitigation
Types to those above, provided that they are consistent with industry standards.
If Loss Mitigation Types other than those above are used, the Servicer must
supply LaSalle Bank National Association with a description of each of the Loss
Mitigation Types prior to sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
Mortgagor
Tenant
Unknown
Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
Damaged
Excellent
Fair
Gone
Good
Poor
Special Hazard
Unknown
V-6
EXHIBIT W
XXXXX'X MORTGAGE LOAN DATA FILE
Field Name Start Width Format
---------- ----- ----- ----------------
LOAN NUM 1 10 00
ALT NUM 11 11 00
NEXT DUE 22 8 yyyymmdd
PMT 30 12 00.00
RTE 42 10 eg .075
BEG BAL 52 12 00.00
SCHED PRIN 64 12 00.00
CURTAIL 76 12 00.00
LIQUID 88 12 00.00
END BAL 100 12 00.00
SCHED INT 112 12 00.00
NET INT 124 12 00.00
NEG AM 136 12 00.00
NEXT RATE 160 10 eg .075
PREPAY DAT 170 8 yyyymmdd
STATUS 178 4 1=Fc 2=Bk, 3=REO
DEALID 000 00
XXXX 000 00 00.00
MOD 204 1 Y (Modification)
W-1
SCHEDULE X
Item on Form 8-K Party Responsible
---------------------------------------------------------- -----------------
*Item 1.01- Entry into a Material Definitive Agreement All parties
*Item 1.02- Termination of a Material Definitive Agreement All parties
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 Trustee
Holders
Item 5.03- Amendments of Articles of Incorporation or Depositor
Bylaws; Change of Fiscal Year
Item 6.01- ABS Informational and Computational Material Depositor
*Item 6.02- Change of Servicer or Trustee Servicer/Trustee
*Item 6.03- Change in Credit Enhancement or External Depositor/Trustee
Support
*Item 6.04- Failure to Make a Required Distribution Trustee
Item 6.05- Securities Act Updating Disclosure Depositor
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
X-1
SCHEDULE Y
Item on Form 10-D Party Responsible
----------------------------------------------------- ---------------------------------------------------
Item 1: Distribution and Pool Performance Information Trustee and Servicer (with respect to underlying
Plus any information required by 1121 which is NOT Mortgage Loan data)
included on the monthly statement to
Certificateholders Servicer and Trustee (to the extent required by
Regulation AB)
Item 2: Legal Proceedings per Item 1117 of All parties to the Pooling and Servicing Agreement
Regulation AB (as to themselves), the Depositor/Trustee/Servicer
(to the extent known) as to the Issuing entity, the
Sponsor, 1106(b) originator, any 1100(d)(1) party
Item 3: Sale of Securities and Use of Proceeds Depositor
Item 4: Defaults Upon Senior Securities Trustee
Item 5: Submission of Matters to a Vote of Security Trustee
Holders
Item 6: Significant Obligors of Pool Assets Depositor/Sponsor/Mortgage Loan Seller/ Servicer
Item 7: Significant Enhancement Provider Information Depositor/Sponsor
Item 8: Other Information All parties to the Pooling and Servicing Agreement
(as to themselves) responsible for disclosure items
on Form 8-K
Item 9: Exhibits Trustee
Y-1
SCHEDULE Z
Item on Form 10-K Party Responsible
--------------------------------------------------------- ------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Trustee and any other party responsible for disclosure
items on Form 8-K
*Item 15: Exhibits, Financial Statement Schedules Trustee/Servicer/subservicers/Depositor
*Additional Item: All parties to the Pooling and Servicing Agreement (as
to themselves), the Depositor/Trustee/Servicer (to the
Disclosure per Item 1117 of Regulation AB extent known) as to the Issuing Entity, the Sponsor,
1106(b) originator, any 1100(d)(1) party
*Additional Item: All parties to the Pooling and Servicing Agreement,
Disclosure per Item 1119 of Regulation AB the Sponsor, originator, significant obligor,
enhancement or support provider
Additional Item: Depositor/Sponsor/Mortgage Loan Seller/Servicer
Disclosure per Item 1112(b) of Regulation AB
Additional Item: Depositor/Sponsor
Disclosure per Items 1114(b) and 1115(b) of Regulation AB
Z-1
