EXHIBIT 4
XXXXXX XXXXXXX CAPITAL I INC.,
Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Servicer,
NC CAPITAL CORPORATION,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
-----------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2006
-----------------------------------------------------------
XXXXXX XXXXXXX CAPITAL I INC. TRUST 2006-NC2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-NC2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the
Mortgage Loans..............................................
Section 2.03 Representations and Warranties;
Remedies for Breaches of
Representations and Warranties with
Respect to the Mortgage Loans...............................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the
Depositor...................................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the
Servicer and Subservicers...................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between
Subservicers and the Trustee................................
Section 3.06 Assumption or Termination of
Subservicing Agreements by Trustee..........................
Section 3.07 Collection of Certain Mortgage Loan
Payments....................................................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and
Similar Items; Escrow Accounts..............................
Section 3.10 Collection Account...........................................
Section 3.11 Withdrawals from the Collection Account......................
Section 3.12 Investment of Funds in the Collection
Account and the Distribution Account........................
Section 3.13 Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity
Coverage....................................................
Section 3.14 Enforcement of "Due-on-Sale" Clauses;
Assumption Agreements.......................................
Section 3.15 Realization upon Defaulted Mortgage
Loans.......................................................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of
REO Property................................................
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and
Information Regarding the Mortgage
Loans.......................................................
Section 3.20 Documents, Records and Funds in
Possession of the Servicer to Be Held
for the Trustee.............................................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Reports on Assessment of
Compliance with Servicing Criteria;
Annual Independent Public Accountants'
Attestation Report..........................................
Section 3.24 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
Section 3.27 Transfer of Servicing for Certain
Mortgage Loans..............................................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the
Determination of LIBOR......................................
Section 4.05 Allocation of Applied Realized Loss
Amounts.....................................................
Section 4.06 Swap Account.................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of
Transfer and Exchange of Certificates.......................
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates................................................
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders'
Names and Addresses.........................................
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor
and the Servicer............................................
Section 6.02 Merger or Consolidation of the
Depositor or the Servicer...................................
Section 6.03 Limitation on Liability of the
Depositor, the Servicer and Others..........................
Section 6.04 Limitation on Resignation of the
Servicer....................................................
Section 6.05 Additional Indemnification by the
Servicer; Third-Party Claims................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Certificates or
Mortgage Loans..............................................
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate
Trustee.....................................................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Treatment of Upper-Tier
CarryForward Amounts, Basis Risk
CarryForward Amounts and Class IO
Shortfalls; Tax Classification of the
Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap
Agreement...................................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or
Purchase of the Mortgage Loans..............................
Section 9.02 Final Distribution on the Certificates.......................
Section 9.03 Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................
Section 10.02 Recordation of Agreement; Counterparts.......................
Section 10.03 Governing Law................................................
Section 10.04 Intention of Parties.........................................
Section 10.05 Notices......................................................
Section 10.06 Severability of Provisions...................................
Section 10.07 Assignment; Sales............................................
Section 10.08 Limitation on Rights of
Certificateholders..........................................
Section 10.09 Inspection and Audit Rights..................................
Section 10.10 Certificates Nonassessable and Fully
Paid........................................................
Section 10.11 Rule of Construction.........................................
Section 10.12 Waiver of Jury Trial.........................................
Section 10.13 Rights of the Swap Provider..................................
Section 10.14 Regulation AB Compliance; Intent of the
Parties; Reasonableness.....................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Xxxxx Fargo Bank, National
Association, as Servicer
Schedule III Representations and Warranties of the Responsible Party as
to the Mortgage Loans
Schedule IV Representations and Warranties of the Responsible Party as to
the Responsible Party
Schedule V Representations and Warranties of Xxxxxx Xxxxxxx Capital I
Inc. as to the Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to be
provided to Depositor
Exhibit N Form of Certification of the Servicer to be provided by the
Servicer to Depositor
Exhibit O Form of Servicer Power of Attorney
Exhibit P Servicing Criteria
Exhibit Q Additional Form 10-D Disclosure
Exhibit R Additional Form 10-K Disclosure
Exhibit S Form 8-K Disclosure Information
Exhibit T Interest Rate Swap Agreement
Exhibit U Purchase Agreement
Exhibit V Form of Additional Disclosure Notification
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1, 2006,
among XXXXXX XXXXXXX CAPITAL I INC., a Delaware corporation, as depositor (the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as servicer ("the Servicer"), NC CAPITAL CORPORATION, a California
corporation, as responsible party (the "Responsible Party"), and DEUTSCHE BANK
NATIONAL TRUST COMPANY, a national banking association, as trustee (the
"Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that four segregated asset pools within the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the LIBOR
Certificates to receive Upper-Tier CarryForward Amounts including, but without
duplication, Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls) be treated for federal income tax purposes as comprising four REMICs
(each, a "Trust REMIC" or, in the alternative, Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC,
respectively). The Class X Interest, Class IO Interest and each Class of LIBOR
Certificates (other than the right of each Class of LIBOR Certificates to
receive Upper-Tier CarryForward Amounts including, but without duplication,
Basis Risk CarryForward Amounts and the obligation to pay Class IO Shortfalls)
represents ownership of a regular interest in a REMIC for purposes of the REMIC
Provisions. The Class R Certificates represent ownership of the sole class of
residual interest in each Trust REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each regular interest is the latest date referenced
in Section 2.05. The Upper-Tier REMIC shall hold as assets the several classes
of uncertificated Lower-Tier Regular Interests, set out below. The Lower-Tier
REMIC shall hold as assets the several classes of uncertificated Pooling-Tier
REMIC-2 Regular Interests. Pooling-Tier REMIC-2 shall hold as assets the several
classes of uncertificated Pooling-Tier REMIC-1 Regular Interests. Pooling-Tier
REMIC-1 shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets, (iii) the Excess Reserve Fund
Account, and (iv) the right of the LIBOR Certificates to receive Upper-Tier
CarryForward Amounts including, but without duplication, Basis Risk CarryForward
Amounts and the obligation to pay Class IO Shortfalls).
For federal income tax purposes, each Class of LIBOR Certificates
represents a beneficial ownership of a regular interest in the Upper-Tier REMIC,
the right to receive Upper-Tier CarryForward Amounts (including, but without
duplication, Basis Risk CarryForward Amounts), and the obligation to pay Class
IO Shortfalls, the Class X Certificates represent beneficial ownership of the
Class X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Swap Account, the Excess Reserve Fund Account and the right to receive Class IO
Shortfalls, and the Class P Certificates represent beneficial ownership of the
Prepayment Premiums, which portions of the Trust Fund shall be treated as a
grantor trust.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Initial
Pooling-Tier
Pooling-Tier REMIC-1 Pooling-Tier REMIC-1 REMIC-1 Principal
Interest Interest Rate Amount
--------------------------------------------------------------------------------
Class PT1-I-1 (1) $ 22,763,942.61
Class PT1-I-2A (2) $ 10,466,593.54
Class PT1-I-2B (3) $ 10,466,593.54
Class PT1-I-3A (2) $ 9,463,216.37
Class PT1-I-3B (3) $ 9,463,216.37
Class PT1-I-4A (2) $ 9,152,094.76
Class PT1-I-4B (3) $ 9,152,094.76
Class PT1-I-5A (2) $ 8,856,511.80
Class PT1-I-5B (3) $ 8,856,511.80
Class PT1-I-6A (2) $ 8,575,250.96
Class PT1-I-6B (3) $ 8,575,250.96
Class PT1-I-7A (2) $ 8,307,136.34
Class PT1-I-7B (3) $ 8,307,136.34
Class PT1-I-8A (2) $ 8,051,034.56
Class PT1-I-8B (3) $ 8,051,034.56
Class PT1-I-9A (2) $ 7,805,857.07
Class PT1-I-9B (3) $ 7,805,857.07
Class PT1-I-10A (2) $ 7,570,319.70
Class PT1-I-10B (3) $ 7,570,319.70
Class PT1-I-11A (2) $ 7,343,693.79
Class PT1-I-11B (3) $ 7,343,693.79
Class PT1-I-12A (2) $ 7,125,039.22
Class PT1-I-12B (3) $ 7,125,039.22
Class PT1-I-13A (2) $ 6,913,247.07
Class PT1-I-13B (3) $ 6,913,247.07
Class PT1-I-14A (2) $ 6,675,003.01
Class PT1-I-14B (3) $ 6,675,003.01
Class PT1-I-15A (2) $ 6,388,892.39
Class PT1-I-15B (3) $ 6,388,892.39
Class PT1-I-16A (2) $ 6,115,122.14
Class PT1-I-16B (3) $ 6,115,122.14
Class PT1-I-17A (2) $ 5,853,157.12
Class PT1-I-17B (3) $ 5,853,157.12
Class PT1-I-18A (2) $ 5,602,485.87
Class PT1-I-18B (3) $ 5,602,485.87
Class PT1-I-19A (2) $ 5,362,618.35
Class PT1-I-19B (3) $ 5,362,618.35
Class PT1-I-20A (2) $ 5,133,080.81
Class PT1-I-20B (3) $ 5,133,080.81
Class PT1-I-21A (2) $ 6,039,714.25
Class PT1-I-21B (3) $ 6,039,714.25
Class PT1-I-22A (2) $ 78,697,589.45
Class PT1-I-22B (3) $ 78,697,589.45
Class PT1-I-23A (2) $ 1,203,896.53
Class PT1-I-23B (3) $ 1,203,896.53
Class PT1-I-24A (2) $ 1,081,362.64
Class PT1-I-24B (3) $ 1,081,362.64
Class PT1-I-25A (2) $ 1,041,990.37
Class PT1-I-25B (3) $ 1,041,990.37
Class PT1-I-26A (2) $ 1,004,056.90
Class PT1-I-26B (3) $ 1,004,056.90
Class PT1-I-27A (2) $ 967,507.74
Class PT1-I-27B (3) $ 967,507.74
Class PT1-I-28A (2) $ 932,297.10
Class PT1-I-28B (3) $ 932,297.10
Class PT1-I-29A (2) $ 898,636.92
Class PT1-I-29B (3) $ 898,636.92
Class PT1-I-30A (2) $ 865,923.23
Class PT1-I-30B (3) $ 865,923.23
Class PT1-I-31A (2) $ 834,403.89
Class PT1-I-31B (3) $ 834,403.89
Class PT1-I-32A (2) $ 833,060.03
Class PT1-I-32B (3) $ 833,060.03
Class PT1-I-33A (2) $ 906,258.32
Class PT1-I-33B (3) $ 906,258.32
Class PT1-I-34A (2) $ 4,286,080.73
Class PT1-I-34B (3) $ 4,286,080.73
Class PT1-I-35A (2) $ 554,008.53
Class PT1-I-35B (3) $ 554,008.53
Class PT1-I-36A (2) $ 535,221.61
Class PT1-I-36B (3) $ 535,221.61
Class PT1-I-37A (2) $ 517,059.64
Class PT1-I-37B (3) $ 517,059.64
Class PT1-I-38A (2) $ 499,502.44
Class PT1-I-38B (3) $ 499,502.44
Class PT1-I-39A (2) $ 482,530.25
Class PT1-I-39B (3) $ 482,530.25
Class PT1-I-40A (2) $ 466,124.51
Class PT1-I-40B (3) $ 466,124.51
Class PT1-I-41A (2) $ 450,273.46
Class PT1-I-41B (3) $ 450,273.46
Class PT1-I-42A (2) $ 434,943.98
Class PT1-I-42B (3) $ 434,943.98
Class PT1-I-43A (2) $ 420,127.02
Class PT1-I-43B (3) $ 420,127.02
Class PT1-I-44A (2) $ 405,805.79
Class PT1-I-44B (3) $ 405,805.79
Class PT1-I-45A (2) $ 391,964.14
Class PT1-I-45B (3) $ 391,964.14
Class PT1-I-46A (2) $ 378,586.48
Class PT1-I-46B (3) $ 378,586.48
Class PT1-I-47A (2) $ 365,658.39
Class PT1-I-47B (3) $ 365,658.39
Class PT1-I-48A (2) $ 353,163.03
Class PT1-I-48B (3) $ 353,163.03
Class PT1-I-49A (2) $ 341,087.39
Class PT1-I-49B (3) $ 341,087.39
Class PT1-I-50A (2) $ 329,417.60
Class PT1-I-50B (3) $ 329,417.60
Class PT1-I-51A (2) $ 318,140.36
Class PT1-I-51B (3) $ 318,140.36
Class PT1-I-52A (2) $ 307,242.72
Class PT1-I-52B (3) $ 307,242.72
Class PT1-I-53A (2) $ 296,712.09
Class PT1-I-53B (3) $ 296,712.09
Class PT1-I-54A (2) $ 286,536.47
Class PT1-I-54B (3) $ 286,536.47
Class PT1-I-55A (2) $ 276,704.15
Class PT1-I-55B (3) $ 276,704.15
Class PT1-I-56A (2) $ 7,665,174.15
Class PT1-I-56B (3) $ 7,665,174.15
Class PT1-II-1 (4) $ 37,587,369.69
Class PT1-II-2A (5) $ 17,282,231.26
Class PT1-II-2B (6) $ 17,282,231.26
Class PT1-II-3A (5) $ 15,625,474.83
Class PT1-II-3B (6) $ 15,625,474.83
Class PT1-II-4A (5) $ 15,111,756.99
Class PT1-II-4B (6) $ 15,111,756.99
Class PT1-II-5A (5) $ 14,623,696.30
Class PT1-II-5B (6) $ 14,623,696.30
Class PT1-II-6A (5) $ 14,159,283.99
Class PT1-II-6B (6) $ 14,159,283.99
Class PT1-II-7A (5) $ 13,716,578.46
Class PT1-II-7B (6) $ 13,716,578.46
Class PT1-II-8A (5) $ 13,293,708.29
Class PT1-II-8B (6) $ 13,293,708.29
Class PT1-II-9A (5) $ 12,888,876.08
Class PT1-II-9B (6) $ 12,888,876.08
Class PT1-II-10A (5) $ 12,499,961.45
Class PT1-II-10B (6) $ 12,499,961.45
Class PT1-II-11A (5) $ 12,125,761.26
Class PT1-II-11B (6) $ 12,125,761.26
Class PT1-II-12A (5) $ 11,764,723.18
Class PT1-II-12B (6) $ 11,764,723.18
Class PT1-II-13A (5) $ 11,415,016.18
Class PT1-II-13B (6) $ 11,415,016.18
Class PT1-II-14A (5) $ 11,021,632.34
Class PT1-II-14B (6) $ 11,021,632.34
Class PT1-II-15A (5) $ 10,549,212.16
Class PT1-II-15B (6) $ 10,549,212.16
Class PT1-II-16A (5) $ 10,097,168.16
Class PT1-II-16B (6) $ 10,097,168.16
Class PT1-II-17A (5) $ 9,664,616.73
Class PT1-II-17B (6) $ 9,664,616.73
Class PT1-II-18A (5) $ 9,250,713.33
Class PT1-II-18B (6) $ 9,250,713.33
Class PT1-II-19A (5) $ 8,854,648.85
Class PT1-II-19B (6) $ 8,854,648.85
Class PT1-II-20A (5) $ 8,475,641.04
Class PT1-II-20B (6) $ 8,475,641.04
Class PT1-II-21A (5) $ 9,972,656.15
Class PT1-II-21B (6) $ 9,972,656.15
Class PT1-II-22A (5) $ 129,943,895.85
Class PT1-II-22B (6) $ 129,943,895.85
Class PT1-II-23A (5) $ 1,987,850.02
Class PT1-II-23B (6) $ 1,987,850.02
Class PT1-II-24A (5) $ 1,785,524.51
Class PT1-II-24B (6) $ 1,785,524.51
Class PT1-II-25A (5) $ 1,720,513.78
Class PT1-II-25B (6) $ 1,720,513.78
Class PT1-II-26A (5) $ 1,657,878.80
Class PT1-II-26B (6) $ 1,657,878.80
Class PT1-II-27A (5) $ 1,597,529.56
Class PT1-II-27B (6) $ 1,597,529.56
Class PT1-II-28A (5) $ 1,539,390.45
Class PT1-II-28B (6) $ 1,539,390.45
Class PT1-II-29A (5) $ 1,483,811.43
Class PT1-II-29B (6) $ 1,483,811.43
Class PT1-II-30A (5) $ 1,429,795.22
Class PT1-II-30B (6) $ 1,429,795.22
Class PT1-II-31A (5) $ 1,377,751.11
Class PT1-II-31B (6) $ 1,377,751.11
Class PT1-II-32A (5) $ 1,375,532.17
Class PT1-II-32B (6) $ 1,375,532.17
Class PT1-II-33A (5) $ 1,496,395.73
Class PT1-II-33B (6) $ 1,496,395.73
Class PT1-II-34A (5) $ 7,077,091.32
Class PT1-II-34B (6) $ 7,077,091.32
Class PT1-II-35A (5) $ 914,767.87
Class PT1-II-35B (6) $ 914,767.87
Class PT1-II-36A (5) $ 883,747.29
Class PT1-II-36B (6) $ 883,747.29
Class PT1-II-37A (5) $ 853,758.61
Class PT1-II-37B (6) $ 853,758.61
Class PT1-II-38A (5) $ 824,768.51
Class PT1-II-38B (6) $ 824,768.51
Class PT1-II-39A (5) $ 796,744.35
Class PT1-II-39B (6) $ 796,744.35
Class PT1-II-40A (5) $ 769,655.54
Class PT1-II-40B (6) $ 769,655.54
Class PT1-II-41A (5) $ 743,482.59
Class PT1-II-41B (6) $ 743,482.59
Class PT1-II-42A (5) $ 718,170.87
Class PT1-II-42B (6) $ 718,170.87
Class PT1-II-43A (5) $ 693,705.38
Class PT1-II-43B (6) $ 693,705.38
Class PT1-II-44A (5) $ 670,058.46
Class PT1-II-44B (6) $ 670,058.46
Class PT1-II-45A (5) $ 647,203.41
Class PT1-II-45B (6) $ 647,203.41
Class PT1-II-46A (5) $ 625,114.47
Class PT1-II-46B (6) $ 625,114.47
Class PT1-II-47A (5) $ 603,767.86
Class PT1-II-47B (6) $ 603,767.86
Class PT1-II-48A (5) $ 583,135.77
Class PT1-II-48B (6) $ 583,135.77
Class PT1-II-49A (5) $ 563,196.71
Class PT1-II-49B (6) $ 563,196.71
Class PT1-II-50A (5) $ 543,927.80
Class PT1-II-50B (6) $ 543,927.80
Class PT1-II-51A (5) $ 525,307.04
Class PT1-II-51B (6) $ 525,307.04
Class PT1-II-52A (5) $ 507,313.08
Class PT1-II-52B (6) $ 507,313.08
Class PT1-II-53A (5) $ 489,925.11
Class PT1-II-53B (6) $ 489,925.11
Class PT1-II-54A (5) $ 473,123.33
Class PT1-II-54B (6) $ 473,123.33
Class PT1-II-55A (5) $ 456,888.40
Class PT1-II-55B (6) $ 456,888.40
Class PT1-II-56A (5) $ 7,665,174.15
Class PT1-II-56B (6) $ 7,665,174.15
Class PT1-R (7) (7)
--------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to
a maximum rate of 10.00%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group I WAC Rate over (B) 10.00%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate, subject to
a maximum rate of 10.00%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group II WAC Rate over (B) 10.00%.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the Trustee shall first pay from the
Trust Fund and charge as an expense of Pooling-Tier REMIC-1 all expenses of the
Trust for such Distribution Date. Such expense, other than Servicing Fees and
Trustee Fees, shall be allocated in the same manner as Realized Losses.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be deemed to be distributed to the Pooling-Tier REMIC-1 Regular Interests at the
rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans shall be
allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to
the Group I Mortgage Loans with the lowest numerical denomination until the
Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to zero,
provided that, with respect to Pooling-Tier REMIC-1 Regular Interests relating
to Loan Group I with the same numerical denomination, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans shall be
allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to
the Group II Mortgage Loans with the lowest numerical denomination until the
Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to zero,
provided that, with respect to Pooling-Tier REMIC-1 Regular Interests relating
to Loan Group II with the same numerical denomination, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
Corresponding
Pooling-Tier Pooling-Tier Corresponding Pooling-Tier Corresponding
Pooling-Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling-Tier REMIC-2 REMIC-1 Regular Scheduled Crossover
Interest Interest Rate Principal Amount IO Interest Interest Distribution Date
-------------------- ------------- ---------------- -------------------- --------------- --------------------
Class PT2-I-1 (1) $22,763,942.61 N/A N/A N/A
Class PT2-I-2A (2) $10,466,593.54 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $10,466,593.54 N/A N/A N/A
Class PT2-I-3A (2) $9,463,216.37 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $9,463,216.37 N/A N/A N/A
Class PT2-I-4A (2) $9,152,094.76 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $9,152,094.76 N/A N/A N/A
Class PT2-I-5A (2) $8,856,511.80 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $8,856,511.80 N/A N/A N/A
Class PT2-I-6A (2) $8,575,250.96 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $8,575,250.96 N/A N/A N/A
Class PT2-I-7A (2) $8,307,136.34 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $8,307,136.34 N/A N/A N/A
Class PT2-I-8A (2) $8,051,034.56 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $8,051,034.56 N/A N/A N/A
Class PT2-I-9A (2) $7,805,857.07 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $7,805,857.07 N/A N/A N/A
Class PT2-I-10A (2) $7,570,319.70 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $7,570,319.70 N/A N/A N/A
Class PT2-I-11A (2) $7,343,693.79 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $7,343,693.79 N/A N/A N/A
Class PT2-I-12A (2) $7,125,039.22 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $7,125,039.22 N/A N/A N/A
Class PT2-I-13A (2) $6,913,247.07 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $6,913,247.07 N/A N/A N/A
Class PT2-I-14A (2) $6,675,003.01 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $6,675,003.01 N/A N/A N/A
Class PT2-I-15A (2) $6,388,892.39 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $6,388,892.39 N/A N/A N/A
Class PT2-I-16A (2) $6,115,122.14 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $6,115,122.14 N/A N/A N/A
Class PT2-I-17A (2) $5,853,157.12 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $5,853,157.12 N/A N/A N/A
Class PT2-I-18A (2) $5,602,485.87 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $5,602,485.87 N/A N/A N/A
Class PT2-I-19A (2) $5,362,618.35 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $5,362,618.35 N/A N/A N/A
Class PT2-I-20A (2) $5,133,080.81 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $5,133,080.81 N/A N/A N/A
Class PT2-I-21A (2) $6,039,714.25 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $6,039,714.25 N/A N/A N/A
Class PT2-I-22A (2) $78,697,589.45 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $78,697,589.45 N/A N/A N/A
Class PT2-I-23A (2) $1,203,896.53 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $1,203,896.53 N/A N/A N/A
Class PT2-I-24A (2) $1,081,362.64 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $1,081,362.64 N/A N/A N/A
Class PT2-I-25A (2) $1,041,990.37 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $1,041,990.37 N/A N/A N/A
Class PT2-I-26A (2) $1,004,056.90 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $1,004,056.90 N/A N/A N/A
Class PT2-I-27A (2) $967,507.74 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $967,507.74 N/A N/A N/A
Class PT2-I-28A (2) $932,297.10 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $932,297.10 N/A N/A N/A
Class PT2-I-29A (2) $898,636.92 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $898,636.92 N/A N/A N/A
Class PT2-I-30A (2) $865,923.23 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $865,923.23 N/A N/A N/A
Class PT2-I-31A (2) $834,403.89 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $834,403.89 N/A N/A N/A
Class PT2-I-32A (2) $833,060.03 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $833,060.03 N/A N/A N/A
Class PT2-I-33A (2) $906,258.32 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $906,258.32 N/A N/A N/A
Class PT2-I-34A (2) $4,286,080.73 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $4,286,080.73 N/A N/A N/A
Class PT2-I-35A (2) $554,008.53 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $554,008.53 N/A N/A N/A
Class PT2-I-36A (2) $535,221.61 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $535,221.61 N/A N/A N/A
Class PT2-I-37A (2) $517,059.64 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $517,059.64 N/A N/A N/A
Class PT2-I-38A (2) $499,502.44 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $499,502.44 N/A N/A N/A
Class PT2-I-39A (2) $482,530.25 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $482,530.25 N/A N/A N/A
Class PT2-I-40A (2) $466,124.51 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $466,124.51 N/A N/A N/A
Class PT2-I-41A (2) $450,273.46 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $450,273.46 N/A N/A N/A
Class PT2-I-42A (2) $434,943.98 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $434,943.98 N/A N/A N/A
Class PT2-I-43A (2) $420,127.02 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $420,127.02 N/A N/A N/A
Class PT2-I-44A (2) $405,805.79 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $405,805.79 N/A N/A N/A
Class PT2-I-45A (2) $391,964.14 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $391,964.14 N/A N/A N/A
Class PT2-I-46A (2) $378,586.48 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $378,586.48 N/A N/A N/A
Class PT2-I-47A (2) $365,658.39 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $365,658.39 N/A N/A N/A
Class PT2-I-48A (2) $353,163.03 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $353,163.03 N/A N/A N/A
Class PT2-I-49A (2) $341,087.39 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $341,087.39 N/A N/A N/A
Class PT2-I-50A (2) $329,417.60 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $329,417.60 N/A N/A N/A
Class PT2-I-51A (2) $318,140.36 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $318,140.36 N/A N/A N/A
Class PT2-I-52A (2) $307,242.72 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $307,242.72 N/A N/A N/A
Class PT2-I-53A (2) $296,712.09 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $296,712.09 N/A N/A N/A
Class PT2-I-54A (2) $286,536.47 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $286,536.47 N/A N/A N/A
Class PT2-I-55A (2) $276,704.15 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $276,704.15 N/A N/A N/A
Class PT2-I-56A (2) $7,665,174.15 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56-B (3) $7,665,174.15 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A April 2006
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A May 2006
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A June 2006
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A July 2006
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A August 2006
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A September 2006
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A October 2006
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A November 2006
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A December 2006
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A January 2007
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A February 2007
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A March 2007
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A April 2007
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A May 2007
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A June 2007
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A July 2007
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A August 2007
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A September 2007
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A October 2007
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A November 2007
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A December 2007
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A January 2008
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A February 2008
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A March 2008
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A April 2008
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A May 2008
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A June 2008
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A July 2008
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A August 2008
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A September 2008
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A October 2008
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A November 2008
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A December 2008
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A January 2009
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A February 2009
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A March 2009
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A April 2009
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A May 2009
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A June 2009
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A July 2009
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A August 2009
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A September 2009
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A October 2009
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A November 2009
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A December 2009
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A January 2010
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A February 2010
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A March 2010
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A April 2010
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A May 2010
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A June 2010
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A July 2010
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A August 2010
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A September 2010
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A October 2010
Class PT2-II-1 (5) $37,587,369.69 N/A N/A N/A
Class PT2-II-2A (6) $17,282,231.26 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $17,282,231.26 N/A N/A N/A
Class PT2-II-3A (6) $15,625,474.83 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $15,625,474.83 N/A N/A N/A
Class PT2-II-4A (6) $15,111,756.99 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $15,111,756.99 N/A N/A N/A
Class PT2-II-5A (6) $14,623,696.30 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $14,623,696.30 N/A N/A N/A
Class PT2-II-6A (6) $14,159,283.99 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $14,159,283.99 N/A N/A N/A
Class PT2-II-7A (6) $13,716,578.46 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $13,716,578.46 N/A N/A N/A
Class PT2-II-8A (6) $13,293,708.29 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $13,293,708.29 N/A N/A N/A
Class PT2-II-9A (6) $12,888,876.08 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $12,888,876.08 N/A N/A N/A
Class PT2-II-10A (6) $12,499,961.45 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $12,499,961.45 N/A N/A N/A
Class PT2-II-11A (6) $12,125,761.26 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $12,125,761.26 N/A N/A N/A
Class PT2-II-12A (6) $11,764,723.18 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $11,764,723.18 N/A N/A N/A
Class PT2-II-13A (6) $11,415,016.18 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $11,415,016.18 N/A N/A N/A
Class PT2-II-14A (6) $11,021,632.34 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $11,021,632.34 N/A N/A N/A
Class PT2-II-15A (6) $10,549,212.16 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $10,549,212.16 N/A N/A N/A
Class PT2-II-16A (6) $10,097,168.16 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $10,097,168.16 N/A N/A N/A
Class PT2-II-17A (6) $9,664,616.73 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $9,664,616.73 N/A N/A N/A
Class PT2-II-18A (6) $9,250,713.33 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $9,250,713.33 N/A N/A N/A
Class PT2-II-19A (6) $8,854,648.85 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $8,854,648.85 N/A N/A N/A
Class PT2-II-20A (6) $8,475,641.04 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $8,475,641.04 N/A N/A N/A
Class PT2-II-21A (6) $9,972,656.15 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $9,972,656.15 N/A N/A N/A
Class PT2-II-22A (6) $129,943,895.85 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $129,943,895.85 N/A N/A N/A
Class PT2-II-23A (6) $1,987,850.02 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $1,987,850.02 N/A N/A N/A
Class PT2-II-24A (6) $1,785,524.51 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $1,785,524.51 N/A N/A N/A
Class PT2-II-25A (6) $1,720,513.78 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $1,720,513.78 N/A N/A N/A
Class PT2-II-26A (6) $1,657,878.80 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $1,657,878.80 N/A N/A N/A
Class PT2-II-27A (6) $1,597,529.56 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $1,597,529.56 N/A N/A N/A
Class PT2-II-28A (6) $1,539,390.45 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $1,539,390.45 N/A N/A N/A
Class PT2-II-29A (6) $1,483,811.43 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $1,483,811.43 N/A N/A N/A
Class PT2-II-30A (6) $1,429,795.22 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $1,429,795.22 N/A N/A N/A
Class PT2-II-31A (6) $1,377,751.11 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $1,377,751.11 N/A N/A N/A
Class PT2-II-32A (6) $1,375,532.17 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $1,375,532.17 N/A N/A N/A
Class PT2-II-33A (6) $1,496,395.73 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $1,496,395.73 N/A N/A N/A
Class PT2-II-34A (6) $7,077,091.32 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $7,077,091.32 N/A N/A N/A
Class PT2-II-35A (6) $914,767.87 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $914,767.87 N/A N/A N/A
Class PT2-II-36A (6) $883,747.29 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $883,747.29 N/A N/A N/A
Class PT2-II-37A (6) $853,758.61 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $853,758.61 N/A N/A N/A
Class PT2-II-38A (6) $824,768.51 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $824,768.51 N/A N/A N/A
Class PT2-II-39A (6) $796,744.35 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $796,744.35 N/A N/A N/A
Class PT2-II-40A (6) $769,655.54 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $769,655.54 N/A N/A N/A
Class PT2-II-41A (6) $743,482.59 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $743,482.59 N/A N/A N/A
Class PT2-II-42A (6) $718,170.87 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $718,170.87 N/A N/A N/A
Class PT2-II-43A (6) $693,705.38 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $693,705.38 N/A N/A N/A
Class PT2-II-44A (6) $670,058.46 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $670,058.46 N/A N/A N/A
Class PT2-II-45A (6) $647,203.41 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $647,203.41 N/A N/A N/A
Class PT2-II-46A (6) $625,114.47 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $625,114.47 N/A N/A N/A
Class PT2-II-47A (6) $603,767.86 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $603,767.86 N/A N/A N/A
Class PT2-II-48A (6) $583,135.77 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $583,135.77 N/A N/A N/A
Class PT2-II-49A (6) $563,196.71 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $563,196.71 N/A N/A N/A
Class PT2-II-50A (6) $543,927.80 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $543,927.80 N/A N/A N/A
Class PT2-II-51A (6) $525,307.04 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $525,307.04 N/A N/A N/A
Class PT2-II-52A (6) $507,313.08 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $507,313.08 N/A N/A N/A
Class PT2-II-53A (6) $489,925.11 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $489,925.11 N/A N/A N/A
Class PT2-II-54A (6) $473,123.33 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $473,123.33 N/A N/A N/A
Class PT2-II-55A (6) $456,888.40 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $456,888.40 N/A N/A N/A
Class PT2-II-56A (6) $12,656,583.25 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $12,656,583.25 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A April 2006
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A May 2006
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A June 2006
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A July 2006
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A August 2006
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A September 2006
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A October 2006
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A November 2006
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A December 2006
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A January 2007
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A February 2007
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A March 2007
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A April 2007
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A May 2007
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A June 2007
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A July 2007
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A August 2007
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A September 2007
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A October 2007
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A November 2007
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A December 2007
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A January 2008
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A February 2008
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A March 2008
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A April 2008
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A May 2008
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A June 2008
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A July 2008
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A August 2008
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A September 2008
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A October 2008
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A November 2008
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A December 2008
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A January 2009
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A February 2009
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A March 2009
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A April 2009
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A May 2009
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A June 2009
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A July 2009
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A August 2009
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A September 2009
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A October 2009
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A November 2009
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A December 2009
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A January 2010
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A February 2010
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A March 2010
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A April 2010
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A May 2010
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A June 2010
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A July 2010
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A August 2010
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A September 2010
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A October 2010
Class PT2-R (8) (8) N/A N/A N/A
------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest
at a per annum rate equal to Swap LIBOR subject to a maximum rate equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I and having
an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in
their class designation.
(4) Each Pooling-Tier REMIC-2 IO is an interest-only interest and does not
have a principal balance but has a notional balance ("Pooling-Tier REMIC-2
IO Notional Balance") equal to the Pooling-Tier REMIC-2 Principal Amount
of the Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing Date through and including the Corresponding Actual Crossover
Distribution Date, each Pooling-Tier REMIC-2 IO Interest shall be entitled
to receive interest that accrues on the Corresponding Pooling-Tier REMIC-1
Regular Interest at a rate equal to the excess, if any, of (i) the
Pooling-Tier REMIC-1 Interest Rate for the Corresponding Pooling-Tier
REMIC-1 Regular Interest over (ii) Swap LIBOR. After the Corresponding
Actual Crossover Distribution Date, the Pooling-Tier REMIC-2 IO Interest
shall not accrue interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling-Tier REMIC-2 IO Interest, this Pooling-Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the
Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier REMIC-1 Regular
Interests relating to Loan Group II and having an "A" in their class
designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be distributed to the Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier
REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans shall be
allocated to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the Pooling-Tier REMIC-2 IO Interests) relating to the Group I Mortgage
Loans with the lowest numerical denomination until the Pooling-Tier REMIC-2
Principal Amount of such interest is reduced to zero, provided that, for
Pooling-Tier REMIC-2 Regular Interests relating to the Group I Mortgage Loans
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-2 Regular Interests, until the Pooling-Tier REMIC-2 Principal
Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans shall be
allocated to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the Pooling-Tier REMIC-2 IO Interests) relating to Loan Group II with the
lowest numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of
such interest is reduced to zero, provided that, for Pooling-Tier REMIC-2
Regular Interests relating to the Group II Mortgage Loans with the same
numerical denomination, such Realized Losses and payments of principal shall be
allocated pro rata between such Pooling-Tier REMIC-2 Regular Interests, until
the Pooling-Tier REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and each
such interest, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier
Lower-Tier REMIC Lower-Tier Initial Lower-Tier Principal REMIC Regular
Interest Interest Rate Amount Interest
------------------ ------------- ---------------------------- -------------
Class LT-A-1 (1) 1/2 initial Class Certificate A-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate A-2a
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate A-2b
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate A-2c
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2d (1) 1/2 initial Class Certificate A-2d
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate M-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate M-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate M-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate M-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate M-5
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-6 (1) 1/2 initial Class Certificate M-6
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate B-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate B-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate B-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal N/A
Balance plus 1/2 Subordinated
Amount, less the aggregate
initial Lower-Tier Principal
Amount of Class LT-Group I
and Class LT Group II
Class LT-Group I (2) 0.001% aggregate Stated N/A
Principal Balance of Group I
Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated N/A
Principal Balance of
Group II Mortgage Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
-----------------------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the weighted average of
the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class
LT-B-3 Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
shall be accrued and added to the Lower-Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans and all Subsequent Recoveries allocable to principal shall be
allocated (i) 50% to the Class LT-Accrual Interest, the Class LT-Group I
Interest and Class LT-Group II Interest (and further allocated among these
Lower-Tier Regular Interests in the manner described below) and (ii) 50% to the
LT-Accretion Directed Classes (such principal payments and Subsequent Recoveries
shall be allocated among such LT-Accretion Directed Classes in an amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Subordinated Amount shall be allocated to the Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so that after
all distributions have been made on each Distribution Date (i) the Lower-Tier
Principal Amount of each of the LT-Accretion Directed Classes is equal to 50% of
the Class Certificate Balance of their Corresponding Class, and (ii) the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) is equal to 50% of the aggregate Stated Principal
Balance of the Mortgage Loans plus 50% of the Subordinated Amount. Any increase
in the Class Certificate Balance of a Class of Offered Certificates as a result
of a Subsequent Recovery shall increase the Lower-Tier Principal Amount of the
Corresponding Lower-Tier Regular Interest by 50% of such increase, and the
remaining 50% of such increase shall increase the Lower-Tier Principal Amount of
the Class LT-Accrual Interest, the Class LT-Group I Interest and the Class
LT-Group II Interest (such increase shall be further allocated among such
Lower-Tier Regular Interests in the manner described below). As among the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, all Subsequent Recoveries and all Realized
Losses, allocable to such Lower-Tier Regular Interests and all increases in the
Lower-Tier Principal Amount of such Lower-Tier Regular Interests as a result of
Subsequent Recoveries shall be allocated (i) to the Class LT-Group I Interest
and the Class LT-Group II Interest, each from the related Loan Group so that
their respective Lower-Tier Principal Amounts (computed to at least eight
decimal places) are equal to 0.001% of the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group and (ii) the remainder to the Class
LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and each
such interest, other than the Class UT-R Interest, is hereby designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier REMIC Upper-Tier Initial Principal Class of
Interest Interest Rate Upper-Tier Amount Certificates
-------------------- --------------- ------------------- ----------------
Class A-1 (1) $430,640,000 Class A-1
Class A-2a (2) $352,800,000 Class A-2a
Class A-2b (2) $102,230,000 Class A-2b
Class A-2c (2) $156,030,000 Class A-2c
Class A-2d (2) $100,004,000 Class A-2d
Class M-1 (3) $53,961,000 Class M-1
Class M-2 (3) $41,181,000 Class M-2
Class M-3 (3) $24,851,000 Class M-3
Class M-4 (3) $22,010,000 Class M-4
Class M-5 (3) $22,010,000 Class M-5
Class M-6 (3) $19,880,000 Class M-6
Class B-1 (3) $19,880,000 Class B-1
Class B-2 (3) $15,620,000 Class B-2
Class B-3 (3) $14,200,000 Class B-3
Class IO (4) (2) N/A
Class X (5) (3) Class X
Class UT-R (6) (6) Class R
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO
Interest. This interest shall be beneficially owned by the holders of the
Class X Certificates and shall be held as an asset of the Swap Account.
(5) The Class X Interest has an initial principal balance of $44,733,872 but
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period. With respect to any Interest Accrual Period, the
Class X Interest shall bear interest at a rate equal to the excess, if
any, of the Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii)
the weighted average of the Lower-Tier Interest Rates of the Lower-Tier
REMIC Interests (other than the Class LT-IO Interest), where the
Lower-Tier Interest Rate on each of the Class LT-Accrual Interest, Class
LT-Group I Interest and Class LT-Group II Interest is subject to a cap
equal to zero and each LT-Accretion Directed Class is subject to a cap
equal to the Upper-Tier Interest Rate on its Corresponding Class of
Upper-Tier Regular Interest. With respect to any Distribution Date,
interest that so accrues on the notional principal balance of the Class X
Interest shall be deferred in an amount equal to any increase in the
Subordinated Amount on such Distribution Date. Such deferred interest
shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of the
Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class IO Interest shall be entitled to receive interest before
any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
The Certificates
Class Class Certificate
Class Designation Pass-Through Rate Balance
-----------------------------------------------------------
Class A-1 (1) $430,640,000
Class A-2a (2) $352,800,000
Class A-2b (3) $102,230,000
Class A-2c (4) $156,030,000
Class A-2d (5) $100,004,000
Class M-1 (6) $ 53,961,000
Class M-2 (6) $ 41,181,000
Class M-3 (6) $ 24,851,000
Class M-4 (6) $ 22,010,000
Class M-5 (6) $ 22,010,000
Class M-6 (6) $ 19,880,000
Class B-1 (6) $ 19,880,000
Class B-2 (6) $ 15,620,000
Class B-3 (6) $ 14,200,000
Class X (7) $ 0(7)
Class R (8) $ 0(8)
------------
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap.
(2) The Class A-2a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(3) The Class A-2b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(4) The Class A-2c Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(5) The Class A-2d Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(6) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Interests will bear interest during
each Interest Accrual Period at a per annum rate equal to (a) on or prior
to the Optional Termination Date, the lesser of (i) LIBOR plus the
applicable Pass-Through Margin, and (ii) the WAC Cap or (b) after the
Optional Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin, and (ii) the WAC Cap.
(7) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
right to Class IO Shortfalls and amounts in the Excess Reserve Fund
Account and the Swap Account, subject to the obligation to make payments
from the Excess Reserve Fund Account in respect of Basis Risk CarryForward
Amounts and amounts in the Swap Account subject to the obligation to make
Net Swap Payments, Swap Termination Payments, Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts. For
federal income tax purposes, the Trustee will treat a Class X
Certificateholder's obligation to make payments from the Excess Reserve
Fund Account or the Swap Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders in favor of
each Class of LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR Certificateholders shall be treated as held
in a portion of the Trust Fund that is treated as a grantor trust under
subpart E, Part I of subchapter J of the Code.
(8) The Class UT-R Interest does not have an interest rate or a principal
balance.
(9) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts. Each of these Certificates
will also be subject to the obligation to pay Class IO Shortfalls as
described in Section 8.13. For federal income tax purposes, any amount
distributed on the LIBOR Certificates on any such Distribution Date in
excess of the amount distributable on their Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date shall be treated as
having been paid from the Excess Reserve Fund Account or the Swap Account,
as applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the LIBOR Certificates on such Distribution Date
shall be treated as having been paid to the Swap Account, all pursuant to,
and as further provided in, Section 8.13. For federal income tax purposes,
the Trustee will treat a Certificateholder's right to receive payments
from the Excess Reserve Fund Account or the Swap Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof. The minimum denomination for the Class P and
the Class X Certificates will each be a 1% Percentage Interest in such Class.
The Class R Certificate will represent a 100% Percentage Interest in such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class A-1, Class A-2a, Class A-2b, Class A-2c
and Class A-2d.
Delay Certificates........... None.
ERISA-Restricted ............ Certificates Class R Certificates, Class P
Certificates and Class X Certificates; any
certificate with a rating below the lowest
applicable permitted rating under the
Underwriters' Exemption.
Non-Delay Certificates....... Class A, Class X and Subordinated Certificates.
Offered Certificates......... All Classes of Certificates other than the
Private Certificates.
Physical Certificates........ Class P, Class X and Class R Certificates.
Private Certificates......... Class P, Class X and Class R Certificates.
Rating Agencies.............. Xxxxx'x, Fitch and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the
Class P and Class R Certificates.
Residual Certificates........ Class R Certificates.
Subordinated Certificates.... Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 Certificates.
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: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Excess Reserve Fund Account or the Swap Account. Each
Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the Depositor.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Offered Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicer on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicer
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicer during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased by the Responsible
Party with respect to such Distribution Date; (vi) the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
9.01; and (vii) the Closing Date Deposit Amount; reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer, the Depositor or the Trustee are
entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Offered Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of LIBOR Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for amounts paid from the Excess Reserve Fund Account to pay any Basis
Risk CarryForward Amount or any Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York, Iowa, or California, (b) a State in which the Servicer's servicing
operations are located, or (c) the State in which the Trustee's operations are
located, are authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the 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.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or
the Group II Class A Certificates, as applicable.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 60.80% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $7,100,154.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class A-2d Certificates: All Certificates bearing the class
designation of "Class A-2d".
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 89.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,100,154.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date) and (i) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 91.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,100,154.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (i) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 93.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,100,154.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the Swap
Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Swap Termination Payments) on such
Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The residual interest in the Lower-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and any principal payments on those Classes of Certificates from the Swap
Account on that Distribution Date, by (y) the aggregate Stated Principal Balance
of the Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 68.40%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $7,100,154.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 74.20% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$7,100,154.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 77.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,100,154.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date) and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 80.80% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,100,154.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 83.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,100,154.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 86.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,100,154.
Class P Certificates: All Certificates bearing the class
designation of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier REMIC-1
as described in the Preliminary Statement and the related footnote thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier REMIC-2
as described in the Preliminary Statement and the related footnote thereto.
Class R Certificates: All Certificates bearing the class
designation of "Class R".
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the class
designation of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without duplication
(ii) as a distribution in respect of principal, any portion of the principal
balance of the Class X Interest which is distributable as a Subordination
Reduction Amount, minus (iii) any amounts paid from the Excess Reserve Fund
Account to pay any Basis Risk CarryForward Amount or any Swap Termination
Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: March 30, 2006.
Closing Date Deposit Amount: $1,643.98 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $1,129.82 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $514.16 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value as determined pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount by which such Prepayment Interest Shortfall exceeds all Prepayment
Interest Excesses for such Distribution Date on the Mortgage Loans and (b) the
amount of the aggregate Servicing Fee paid to or retained by the Servicer for
such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attn: Trust Administration- MS06C2, facsimile no. (714)
247-6329, and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier) of the Interest Rate Swap Agreement applicable for
such Distribution Date, in which case the Corresponding Actual Crossover
Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be the first
Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier REMIC
or Upper-Tier REMIC that corresponds to the class of interests in the other such
REMIC or to a Class of Certificates in the manner set out below:
Corresponding
Corresponding Lower-Tier Class Upper-Tier Regular Corresponding Class of
Designation Interest Certificates
------------------------------ ---------------------- ----------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-A-2d Class A-2d Class A-2d
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date through the last day of
the related Prepayment Period and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period, divided by
(y) the Cut-off Date Pool Principal Balance, exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------ --------------------------
April 2008 through March 2009 1.300% for the first month, plus
an additional 1/12th of 1.600%
for each month thereafter (e.g.,
2.100% in October 2008)
April 2009 through March 2010 2.900% for the first month, plus
an additional 1/12th of 1.300%
for each month thereafter (e.g.,
3.700% in October 2009)
April 2010 through March 2011 4.500% for the first month, plus
an additional 1/12th of 1.300%
for each month thereafter (e.g.,
5.150% in October 2010)
April 2011 through March 2012 5.800% for the first month, plus
an additional 1/12th of 0.600%
for each month thereafter (e.g.,
6.100% in October 2011)
April 2012 and thereafter 6.400%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a)-(h) as listed on Exhibit K
hereto.
Cut-off Date: March 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the Responsible
Party as of the Cut-off Date to the Depositor or the Sponsor setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner-occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (13) a code indicating the documentation
style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) with respect to each First Lien Mortgage
Loan, the LTV at origination and with respect to each Second Lien Mortgage Loan,
the CLTV at origination; and (23) if such Mortgage Loan is covered by a primary
mortgage insurance policy or a lender-paid primary mortgage insurance policy,
the primary mortgage insurance rate. With respect to the Mortgage Loans in the
aggregate, the Data Tape Information shall set forth the following information,
as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
defaulting party or a Termination Event (as defined in the Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with respect to
which the Swap Provider is the sole Affected Party (as defined in the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date, a
Delinquency Trigger Event exists if the quotient (expressed as a percentage) of
(x) the rolling three month average of the aggregate Stated Principal Balance of
60+ Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date equals or exceeds 40.80% of the prior period's Senior Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of the Class A
Certificates have been reduced to zero, the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date equals or exceeds 50.60% of the
prior period's Class M Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx Capital I Inc., a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard & Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of Xxxxxx Xxxxxxx Capital I Inc.
Trust 2006-NC2 Mortgage Pass-Through Certificates, Series 2006-NC2". Funds in
the Distribution Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in April
2006.
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered Holders
of Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2, Mortgage Pass-Through
Certificates, Series 2006-NC2". Funds in the Excess Reserve Fund Account shall
be held in trust for the Regular Certificateholders for the uses and purposes
set forth in this Agreement. Amounts on deposit in the Excess Reserve Fund
Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate and any lender-paid
primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Trustee Fee and any lender-paid primary mortgage insurance fee, if
applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx
Xxx Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Responsible Party, as contemplated by this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
February 2036.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx Capital I Inc. Trust 2006-NC2, or such other address as Fitch may
hereafter furnish to the Depositor, the Trustee and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates, the Class A-2c Certificates and the Class A-2d,
collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between Xxxxxx Xxxxxxx Capital Services Inc. and
the Trustee, a copy of which is attached hereto as Exhibit T.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, that portion of Available Funds attributable to interest
relating to Mortgage Loans.
Investment Account: As defined in Section 3.12(a).
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the Offered
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Servicer has certified to the Trustee that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property, or (b) is a
Second Lien Mortgage Loan (1) that is delinquent 180 days or longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan, and (3) as to
which the Servicer has certified to the Trustee that it does not believe there
is a reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Interest Rate: As described in the Preliminary
Statement.
Lower Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2, Class LT-B-3, Class LT-IO, Class LT-Group I, Class LT-Group II and
Class LT-Accrual Interests as described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc, and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee and the Servicer.
Xxxxxx Xxxxxxx: Xxxxxx Xxxxxxx, a Delaware corporation.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and referred to on Schedule I, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the date such Mortgage Loan was sold by the Responsible Party to the
Sponsor; (17) whether such Mortgage Loan provides for a Prepayment Charge as
well as the term and amount of such Prepayment Charge, if any; (18) with respect
to each First Lien Mortgage Loan, the LTV at origination and with respect to
each Second Lien Mortgage Loan, the CLTV at origination; and (19) the date on
which servicing of the Mortgage Loan was transferred to the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date, the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer or a Subservicer with responsibility for the servicing of the Mortgage
Loans required to be serviced by the Servicer or a Subservicer and listed on a
list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or a Subservicer, reasonably acceptable to the
Trustee (and/or such other Persons as may be set forth herein), provided, that
any Opinion of Counsel relating to (a) qualification of any Trust REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates except as set forth in the following sentence, the following
percentages: Class A-1 Certificates, 0.1800%; Class A-2a Certificates, 0.0700%;
Class A-2b Certificates, 0.1200%; Class A-2c Certificates, 0.1800%; Class A-2d
Certificates, 0.2900%; Class M-1 Certificates, 0.3600%; Class M-2 Certificates,
0.3800%; Class M-3 Certificates, 0.3900%; Class M-4 Certificates, 0.5100%; Class
M-5 Certificates, 0.5300%; Class M-6 Certificates, 0.6000%; Class B-1
Certificates, 1.1500%; Class B-2 Certificates, 1.4000%; and Class B-3
Certificates, 2.2500%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.3600%; Class A-2a Certificates, 0.1400%; Class A-2b
Certificates, 0.2400%; Class A-2c Certificates, 0.3600%; Class A-2d
Certificates, 0.5800%; Class M-1 Certificates, 0.5400%; Class M-2 Certificates,
0.5700%; Class M-3 Certificates, 0.5850%; Class M-4 Certificates, 0.7650%; Class
M-5 Certificates, 0.7950%; Class M-6 Certificates, 0.9000%; Class B-1
Certificates, 1.7250%; Class B-2 Certificates, 2.1000%; and Class B-3
Certificates, 3.3750%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest and each Upper-Tier Regular Interest,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution and rated "P-1" by Moody's, "F1+" by
Fitch, and "A-1+" by Standard & Poor's (to the extent they are Rating
Agencies hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository Institution
(acting as principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any State thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or
on a specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Trustee or an Affiliate thereof, that have
been rated "Aaa" by Moody's, "AAAm" by Standard & Poor's and at least "AA"
by Fitch (to the extent they are Rating Agencies hereunder and such funds
are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies as a
permitted investment of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person, a U.S. Person that is a partnership for U.S. federal income tax
purposes, any partner in which, directly or indirectly (other than through a
U.S. corporation) is not a U.S. Person, (vi) an "electing large partnership"
within the meaning of Section 775 of the Code and (vii) any other Person so
designated by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person may cause any
Trust REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
Xxxxxxx Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Loan Group WAC Rate: With respect to the Group
I Mortgage Loans as of any Distribution Date, a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates for each such Mortgage Loan
then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans, adjusted in each case to accrue on the basis of a 360 day year
and the actual number of days in the related Interest Accrual Period.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
(a) the weighted average of the Adjusted Net Mortgage Rates for each such
Mortgage Loan then in effect on the beginning of the related Due Period on the
Group II Mortgage Loans, adjusted in each case to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by the Servicer as to which a Principal Prepayment in
Full occurs from the 1st day of the month through the 15th day of the month in
which such Distribution Date occurs and that represents interest that accrues
from the 1st day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the Servicer to reduce the outstanding principal balance of such Mortgage Loan
on a date preceding such Due Date an amount equal to the product of (a) the
Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the
amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the
number of days commencing on the date on which such Principal Prepayment was
applied and ending on the last day of the calendar month in which the related
Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date either (i)
with respect to any voluntary Principal Prepayments in Full, the period from and
including the 16th day of the month preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, from
and including the Cut-off Date) to and including the 15th day of the month in
which such Distribution Date occurs, or (ii) with respect to any other Principal
Prepayments, the calendar month preceding the month in which such Distribution
Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, and all Principal Prepayments received during the
related Prepayment Period; (ii) all Liquidation Proceeds, Condemnation Proceeds
and Insurance Proceeds on the Mortgage Loans allocable to principal actually
collected by the Servicer during the related Prepayment Period; (iii) the
portion of the Repurchase Price allocable to principal with respect to each
Mortgage Loan, repurchased with respect to such Distribution Date; (iv) all
Substitution Adjustment Amounts allocable to principal received in connection
with the substitutions of Mortgage Loans with respect to such Distribution Date;
(v) with respect to the Distribution Date in April 2006 only, the portion of the
Closing Date Deposit Amount allocable to principal; and (vi) the allocable
portion of the proceeds received with respect to the termination of the Trust
Fund pursuant to clause (a) of Section 9.01 (to the extent such proceeds relate
to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated March 27,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreement: The Third Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005, between
Xxxxxx Xxxxxxx Capital Inc. and NC Capital Corporation.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor, the Trustee and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that, for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement following an Additional Termination Event described in Part
1(h)(ii) of the Interest Rate Swap Agreement.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan repurchased by
the Depositor or the Responsible Party, an amount equal to the sum of (i) the
unpaid principal balance of such Mortgage Loan as of the date of repurchase,
(ii) interest on such unpaid principal balance of such Mortgage Loan at the
Mortgage Rate from the last date through which interest has been paid and
distributed to the Trustee to the date of repurchase, (iii) all unreimbursed
Servicing Advances and (iv) all costs and expenses incurred by the Trustee
arising out of or based upon such breach, including without limitation, costs
and expenses relating to the Trustee's enforcement of the Responsible Party's
repurchase obligation hereunder.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any associate, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers who at such time shall be
officers 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 and who shall have direct responsibility for the administration of this
Agreement.
Responsible Party: NC Capital Corporation, a California
corporation, and its successors in interest.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Defaulted Swap Termination Payment: As of any date, the
lesser of (x) any Replacement Swap Provider Payment and (y) any Swap Termination
Payment owed to the Swap Provider.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 39.20%.
Servicer: From and after the Servicing Transfer Date (except with
respect to the obligation to make P&I Advances which obligations shall be
applicable from and after the Closing Date), Xxxxx Fargo Bank, National
Association, and if a successor servicer is appointed hereunder, such successor.
Prior to the Servicing Transfer Date, "Servicer" shall mean New Century with
respect to all of the Mortgage Loans.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Sections
3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also include any
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage in connection
with any foreclosure in respect of any Mortgage Loan to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement. The Servicer shall
not be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit P
hereto.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as of the first day of such calendar
month. The Servicing Fee is payable solely from the interest portion (including
recoveries with respect to interest from Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds and proceeds received with respect to REO
Properties, to the extent permitted by Section 3.11) of such Scheduled Payment
collected by the Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
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 list may from time to time be amended.
Servicing Transfer Date: With respect to any Mortgage Loan, the date
on which servicing of such Mortgage Loan was transferred to the Servicer (as set
forth on the Mortgage Loan Schedule).
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more past due (without giving effect to any
grace period), including, without limitation, such Mortgage Loans that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 3.15% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 6.30% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then current aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution Date on which a Trigger Event no longer
exists. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage
Loans under the Purchase Agreement.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx Capital I Inc. Trust
2006-NC2, or such other address as Standard & Poor's may hereafter furnish to
the Depositor, the Trustee and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal including advances in respect of scheduled payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of principal
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date and any unscheduled
principal payments and other unscheduled principal collections received during
the related Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in April 2009 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balances of the Mortgage Loans for the applicable
Distribution Date but prior to any allocation of the Principal Distribution
Amount and principal payments from the Swap Account to the Certificates on such
Distribution Date) is greater than or equal to the Senior Specified Enhancement
Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by the Servicer, a Subservicer or the Trustee, as
applicable, that is not responsible for the overall servicing (as "servicing" is
commonly understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the Offered Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan that satisfies the criteria set
forth in the definition of "Qualified Substitute Mortgage Loan" in the Purchase
Agreement, which, must, on the date of such substitution, as confirmed in a
Request for Release, substantially in the form of Exhibit J, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not more than
10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio
or a Combined Loan-to-Value Ratio, as applicable, no higher than that of the
Deleted Mortgage Loan; (iv) have a remaining term to maturity no greater than
(and not more than one year less than that of) the Deleted Mortgage Loan; and
(v) comply with each representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate Swap
Agreement, the Class IO Interest and the right to receive Class IO Shortfalls,
subject to the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the Offered Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment owed to
the Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC in the manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicer on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date and (B) any Net Swap Payments to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment that is not
a Senior Defaulted Swap Termination Payment) to the Swap Provider.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution 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 Closing Date
Deposit Amount; (v) the Interest Rate Swap Agreement, (vi) the Swap Assets; and
(vii) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC or the Upper-Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Trustee Fee Rate and (b) (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Interest Accrual Period and (ii) with respect to the Distribution Date
in April 2006 only, the portion of the Closing Date Deposit Amount allocable to
principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0032% per
annum.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg.
54487 (2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the Purchase Agreement.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Certificates on such Distribution
Date taking into account the Upper-Tier REMIC Loan Group I Rate or Upper-Tier
REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate
and (B) the Upper-Tier CarryForward Amount for such Class of Certificates for
all previous Distribution Dates not previously paid, together with interest
thereon at a rate equal to the applicable Upper-Tier Interest Rate for such
Class of Certificates for such Distribution Date, without giving effect to the
Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II Rate, as
and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period, weighted on the basis of the Lower-Tier Principal
Amounts of such Lower-Tier Regular Interests as of the first day of the related
Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) 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 U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then in effect on
the beginning of the related Due Period on the Mortgage Loans minus the Swap
Payment Rate, adjusted in each case to accrue on the basis of a 360-day year and
the actual number of days in the related Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee, endorsed "Pay to the order of _____________, without
recourse" and signed (which may be by facsimile signature) in the name of
the last endorsee by an authorized officer. To the extent that there is no
room on the face of a Mortgage Note for endorsements, the endorsement may
be contained on an allonge, unless the Trustee is advised in writing by
the Responsible Party, that state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or
a certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Responsible Party, shall deliver or cause to be
delivered to the Trustee a photocopy of such Mortgage, together with (A)
in the case of a delay caused by the public recording office, an officer's
certificate of the Responsible Party or evidence of certification on the
face of such photocopy of such Mortgage or a certificate from an escrow
company, a title company or closing attorney stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Trustee upon receipt thereof by the Responsible Party; or (B) in
the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon or a certified
true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank;
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon or a
certified true copy of such intervening assignments of Mortgage submitted
for recording, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of Mortgage,
the Responsible Party, shall deliver or cause to be delivered a photocopy
of such intervening assignment, together with (A) in the case of a delay
caused by the public recording office, an officer's certificate of the
Responsible Party or evidence of certification on the face of such
photocopy of such intervening assignment or a certificate from an escrow
company, a title company or a closing attorney stating that such
intervening assignment of Mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of Mortgage or a copy of such intervening
assignment of Mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of Mortgage will be promptly delivered to the Trustee upon
receipt thereof by the Responsible Party; or (B) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company; and
(viii) the original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage (if
provided).
The Responsible Party shall cause to be delivered to the Trustee the
applicable recorded document promptly upon receipt from the respective recording
office but in no event later than 120 days from the Closing Date.
From time to time, the Depositor or the Servicer, as applicable,
shall forward to the Trustee, additional original documents, additional
documents evidencing an assumption, modification, consolidation or extension of
a Mortgage Loan, in accordance with the terms of this Agreement upon receipt of
such documents. All such mortgage documents held by the Trustee as to each
Mortgage Loan shall constitute the "Custodial File".
On or prior to the Closing Date, the Responsible Party shall deliver
to the Trustee, Assignments of Mortgage, in blank, for each Mortgage Loan. The
Responsible Party shall cause the Assignments of Mortgage and complete recording
information to be provided to the Servicer in a reasonably acceptable manner. No
later than thirty (30) Business Days following the later of the Closing Date and
the date of receipt by the Servicer of the complete recording information for a
Mortgage, the Servicer shall promptly submit or cause to be submitted for
recording, at the expense of the Responsible Party and at no expense to the
Trust Fund, the Trustee, the Servicer, or the Depositor, in the appropriate
public office for real property records, each Assignment of Mortgage referred to
in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (i) if the Trustee and
each Rating Agency have received an Opinion of Counsel, satisfactory in form and
substance to the Trustee and each Rating Agency to the effect that the
recordation of such Assignments of Mortgage in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note or (ii)
the Rating Agencies have each notified the Depositor in writing that not
recording any such Assignments of Mortgage would not cause the initial ratings
on any Offered Certificates to be downgraded or withdrawn; provided, however,
that the Servicer shall not be held responsible or liable for any loss that
occurs because an Assignment of Mortgage was not recorded, but only to the
extent the Servicer does not have prior knowledge of the act or omission that
causes such loss. However, with respect to the Assignments of Mortgage referred
to in clauses (i) and (ii) above, if foreclosure proceedings occur against a
Mortgaged Property, the Depositor shall notify the Servicer and the Servicer
shall record such Assignment of Mortgage at the expense of the Responsible Party
(at no expense to the Servicer) as required pursuant to the Purchase Agreement.
If the Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to "Deutsche Bank National Trust Company, as trustee under the Pooling and
Servicing Agreement dated as of March 1, 2006, Xxxxxx Xxxxxxx Capital I Inc.
Trust 2006-NC2". In the event that any such Assignment of Mortgage is lost or
returned unrecorded because of a defect therein, the Responsible Party shall
promptly cause to be delivered a substitute Assignment of Mortgage to cure such
defect and thereafter cause each such assignment to be duly recorded.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within 90 days following the Closing Date, and in the event that
the Responsible Party does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the related
Mortgage Loan shall, upon the request of the Depositor, be repurchased by the
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the
Responsible Party cannot deliver such original or copy of any document submitted
for recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that the Responsible Party shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of an officer of the Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the Trustee, prior to the Closing Date of a copy of
such Mortgage or assignment, as the case may be, certified (such certification
to be an original thereof) by the public recording office to be a true and
complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX CAPITAL I
INC. TRUST 2006-NC2" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representation and warranty set
forth in paragraph (46) of Schedule III. The Trust's fiscal year is the calendar
year.
(d) The Trust shall have the capacity, power and authority, and
the Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
The Trustee on behalf of the Trust is hereby directed to enter into the Interest
Rate Swap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee shall acknowledge, on the Closing Date, receipt by the Trustee, of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee shall maintain possession of the related Mortgage Notes in the State of
California unless otherwise permitted by the Rating Agencies.
In connection with the Closing Date, the Trustee shall be required
to deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Servicer an Initial Certification prior to the Closing Date,
or, as the Depositor agrees to, on the Closing Date, certifying receipt of a
Mortgage Note and Assignment of Mortgage for each Mortgage Loan. The Trustee
shall not be responsible to verify the validity, sufficiency or genuineness of
any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for the
benefit of the Holders of the Certificates, ascertain that all documents
identified in the Document Certification and Exception Report in the form
attached hereto as Exhibit F are in its possession, and shall deliver to the
Depositor and the Servicer a Document Certification and Exception Report, in the
form annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents identified
in the Document Certification and Exception Report and required to be reviewed
by it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, the information set
forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Responsible Party shall deliver to the Servicer copies of all
trailing documents required to be included in the Custodial File at the same
time the original or certified copies thereof are delivered to the Trustee,
including but not limited to such documents as the title insurance policy and
any other Mortgage Loan Documents upon return from the public recording office.
Such documents shall be delivered by the Responsible Party at the Responsible
Party's expense to the Servicer.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a) The
Servicer hereby makes the representations and warranties set forth in Schedule
II hereto to the Depositor and the Trustee, as of the dates set forth in such
Schedule.
(b) The Responsible Party hereby makes the representations and
warranties, set forth in Schedule III and Schedule IV hereto, to the Depositor,
the Servicer and the Trustee as of the dates set forth in such Schedules.
(c) The Depositor hereby makes the representations and warranties
set forth in Schedules V hereto to the Trustee as of the dates set forth in such
Schedule.
(d) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the Responsible Party, the Depositor,
the Trustee or the Servicer of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others.
(e) Within 30 days of the earlier of either discovery by or notice
to the Responsible Party that any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial File
or within 60 days of the earlier of either discovery by or notice to the
Responsible Party of any breach of a representation or warranty, set forth in
Section 2.03(b), that materially and adversely affects the value of any Mortgage
Loan or the interest of the Trustee or the Certificateholders therein, the
Responsible Party shall use its best efforts to cause to be remedied a material
defect in a document constituting part of a Mortgage File or promptly to cure
such breach in all material respects and, if such defect or breach cannot be
remedied, the Responsible Party shall, at the Depositor's option as specified in
writing and provided to the Responsible Party and the Trustee, (i) if such 30 or
60 day period, as applicable, expires prior to the second anniversary of the
Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in this Section 2.03; or (ii) repurchase
such Mortgage Loan at the Repurchase Price; provided, however, that any such
substitution pursuant to clause (i) above shall not be effected prior to the
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit J, and the delivery of the Mortgage File to the Trustee for any such
Substitute Mortgage Loan. Notwithstanding the foregoing, a breach (i) which
causes a Mortgage Loan not to constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code or (ii) by the Responsible Party of
any of the representations and warranties set forth in clause (46), (47), (49),
(53), (55), (56), (57), (58), (59), (60), (61), (62) or (63) of Schedule III, in
each case, will be deemed automatically to materially and adversely affect the
value of such Mortgage Loan and the interests of the Trustee and
Certificateholders in such Mortgage Loan. In the event that the Trustee receives
notice of a breach by the Responsible Party of any of the representations and
warranties set forth in clause (46), (47), (49), (53), (55), (56), (57), (58),
(59), (60), (61), (62) or (63) of Schedule III, the Trustee shall give notice of
such breach to the Responsible Party and request the Responsible Party to
repurchase the Mortgage Loan at the Repurchase Price within sixty (60) days of
the Responsible Party receipt of such notice. The Responsible Party shall
repurchase each such Mortgage Loan within 60 days of the earlier of discovery or
receipt of notice with respect to each such Mortgage Loan, and in any case such
repurchase shall occur or shall be deemed to occur on the last day of the
applicable Prepayment Period preceding the Distribution Date on which the
Repurchase Price is to be distributed.
(f) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of the representation or warranty set forth on
Schedule V hereto, the Depositor shall use its best efforts to promptly cure
such breach and, if such defect or breach cannot be remedied, the Depositor
shall purchase such Mortgage Loan at the Repurchase Price or substitute a
Substitute Mortgage Loan for such Mortgage Loan.
(g) With respect to any Substitute Mortgage Loan or Loans
substituted by the Depositor or the Responsible Party, the Depositor or the
Responsible Party, as applicable, shall deliver to the Trustee for the benefit
of the Certificateholders the Mortgage Note, the Mortgage, the related
Assignment of Mortgage, and such other documents and agreements as are required
by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. No substitution under this Agreement is permitted to
be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Substitute Mortgage Loans in the Due
Period of substitution shall not be part of the Trust Fund and will be retained
by the Depositor or the Responsible Party, as applicable, on the next succeeding
Distribution Date. For the Due Period of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the Depositor or the
Responsible Party, as applicable, shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
(h) The Servicer, based upon information provided by the Depositor
or the Responsible Party, as applicable, shall amend the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects and the Responsible Party shall
be deemed to have made with respect to such Substitute Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties made pursuant
to Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and certification by the Servicer to the Trustee that the deposit
to the Collection Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph, the
Trustee shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the Depositor or
the Responsible Party, as applicable, and shall execute and deliver at the
direction of the Responsible Party or the Depositor, as applicable, such
instruments of transfer or assignment prepared by the Depositor or the
Responsible Party, as applicable, in each case without recourse, representation
or warranty, as shall be necessary to vest title in the Depositor or the
Responsible Party, as applicable, of the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
(i) For any month in which the Depositor or the Responsible Party
substitutes one or more Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the Servicer will determine the amount (if any) by which the
aggregate unpaid principal balance of all such Substitute Mortgage Loans as of
the date of substitution is less than the aggregate unpaid principal balance of
all such Deleted Mortgage Loans. The amount of such shortage plus an amount
equal to the sum of (i) any accrued and unpaid interest on the Deleted Mortgage
Loans and (ii) all unreimbursed Servicing Advances with respect to such Deleted
Mortgage Loans (collectively, the "Substitution Adjustment Amount") shall be
remitted by the Responsible Party to the Servicer for deposit into the
Collection Account on or before the Distribution Account Deposit Date for the
Distribution Date following the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
(j) In addition to such repurchase or substitution obligation, the
Responsible Party shall indemnify the Depositor and its Affiliates, the
Servicer, the Sponsor, the Trustee and the Trust and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach by the Responsible Party of any of its
representations and warranties or obligations contained in this Agreement.
(k) In the event that the Depositor or the Responsible Party shall
have repurchased a Mortgage Loan pursuant to this Agreement, the Repurchase
Price therefor shall be deposited by the Servicer in the Collection Account of
the Servicer pursuant to Section 3.10 on or before the Distribution Account
Deposit Date for the Distribution Date following the Prepayment Period during
which the Depositor or the Responsible Party, as applicable, repurchased such
Mortgage Loan and upon such deposit of the Repurchase Price and receipt of a
Request for Release in the form of Exhibit J hereto, the Trustee shall release
the related Custodial File held for the benefit of the Certificateholders to
such Person as directed by the Servicer, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary to
transfer title from the Trustee.
(l) Any Mortgage Loan repurchased pursuant to this Section 2.03
will be removed from the Trust Fund. The Servicer shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of any
Mortgage Loan repurchased, and the Servicer shall deliver the amended Mortgage
Loan Schedule to the Trustee.
It is understood and agreed by the parties hereto that the
obligation of the Depositor or the Responsible Party under this Agreement to
cure, repurchase or substitute any Mortgage Loan as to which a breach of a
representation and warranty has occurred and is continuing, together with any
related indemnification obligations of the Responsible Party set forth in
Section 2.03(h), shall constitute the sole remedies against such Person
respecting such breach available to Certificateholders, the Depositor (if
applicable), the Servicer or the Trustee.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized Denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular interest
in each Trust REMIC is the Distribution Date occurring in February 2036, which
is the Distribution Date in the month following the month in which the latest
maturity date of any Mortgage Loan occurs. Amounts distributable to the Class X
Certificates (prior to any reduction for any Basis Risk Payment or Swap
Termination Payment), exclusive of any amounts received from the Swap Provider,
shall be deemed paid from the Upper-Tier REMIC in respect of the Class X
Interest to the Holders of the Class X Certificates prior to distribution of any
Basis Risk Payments to the Offered Certificates. For federal income tax
purposes, any amount distributed on the Offered Certificates on any Distribution
Date in excess of the amount distributable on their Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date shall be treated as having
been paid from the Excess Reserve Fund Account or the Swap Account, as
applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the amount
distributable on the Corresponding Class of Offered Certificates on such
Distribution Date shall be treated as having been paid to the Excess Reserve
Fund Account or the Swap Account, all pursuant to and as further provided in
Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicer that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans (provided, however that, prior to the Servicing Transfer Date the
Mortgage Loans shall be serviced by New Century and subject to an Interim
Servicing Agreement; and provided, further, that from and after the Servicing
Transfer Date Xxxxx Fargo shall service such Mortgage Loans pursuant to this
Agreement), to the extent consistent with such terms, in the same manner in
which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed in lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
covenants that its computer and other systems used in servicing the Mortgage
Loans operate in a manner such that the Servicer can service the Mortgage Loans
in accordance with the terms of this Pooling and Servicing Agreement. The
Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents provided to the Trustee as are necessary or appropriate to enable
the Servicer or any Subservicer to carry out its servicing and administrative
duties hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such duties,
including a power of attorney in the form of Exhibit O hereto to take title to
Mortgaged Properties after foreclosure in the name of and on behalf of the
Trustee. The Trustee shall execute a separate power of attorney in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicers under such powers of
attorney. Notwithstanding anything contained herein to the contrary, neither the
Servicer nor any Subservicer shall without the Trustee's consent: (i) initiate
any action, suit or proceeding solely under the Trustee's name without
indicating the Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards
of the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (except for a reduction of interest payments resulting from the
application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause any Trust REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the Servicer shall be entitled to waive any such provisions on behalf of the
Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements") The Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, the Servicer has not
entered into a Subservicing Agreement is in effect as of the Closing Date with
respect to any Mortgage Loans required to be serviced by it hereunder. The
Servicer shall give notice to the Depositor and the Trustee of any such
Subservicer and Subservicing Agreement, which notice shall contain all
information (including without limitation a copy of the Subservicing Agreement
and any amendments or modifications thereof) reasonably necessary to enable the
Trustee, pursuant to Section 8.12(g), to accurately and timely report the event
under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under
the Exchange Act are required to be filed under the Exchange Act) No
Subservicing Agreement shall be effective until 30 days after such written
notice is received by both the Depositor and the Trustee. The Trustee shall not
be required to review or consent to such Subservicing Agreements and shall have
no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) The Servicer shall cause any Subservicer engaged by the
Servicer (or by any Subservicer) for the benefit of the Depositor and the
Trustee to comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were the Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12(f) of this Agreement. The
Servicer shall be responsible for obtaining from each such Subservicer and
delivering to applicable Persons any servicer compliance statement required to
be delivered by such Subservicer under Section 3.22 and any assessment of
compliance report and related accountant's attestation required to be delivered
by such Subservicer under Section 3.23, in each case as and when required to be
delivered.
(e) Subject to the conditions set forth in this Section 3.02(e),
the Servicer and any Subservicer engaged by the Servicer is permitted to utilize
one or more Subcontractors to perform certain of its obligations hereunder. The
Servicer shall promptly upon request provide to the Depositor a written
description (in form and substance satisfactory to the Depositor) of the role
and function of each Subcontractor utilized by the Servicer or any such
Subservicer, specifying, no later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(d), (i) the
identity of each such Subcontractor, if any, that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph. As a condition to the utilization by the Servicer or any such
Subservicer of any Subcontractor determined to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, the
Servicer shall cause any such Subcontractor used by the Servicer (or by any such
Subservicer) for the benefit of the Depositor and the Trustee to comply with the
provisions of Section 3.23 of this Agreement to the same extent as if such
Subcontractor were the Servicer. The Servicer shall be responsible for obtaining
from each such Subcontractor and delivering to the applicable Persons any
assessment of compliance report and related accountant's attestation required to
be delivered by such Subcontractor under Section 3.23, in each case as and when
required to be delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If the Servicer determines,
pursuant to the preceding sentence, that the Subcontractor is a "servicer"
within the meaning of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the engagement of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.02(a) and the Servicer shall comply with Section 3.02(d)
with respect thereto.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement to which the Servicer is a party and the
rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement; provided, however, that the termination, resignation or removal of a
Subservicer shall be not be effective until 30 days after written notice is
received by both the Depositor and the Trustee that contains all information
reasonably necessary to enable the Trustee, pursuant to Section 8.12(g), to
accurately and timely report the event under Item 6.02 of Form 8-K pursuant to
the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act) In the event of termination of any Subservicer,
all servicing obligations of such Subservicer shall be assumed simultaneously by
the Servicer without any act or deed on the part of such Subservicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default)
Section 3.04 Liability of the Servicer. Notwithstanding 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 primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 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. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor to the Servicer) shall not be
deemed a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee, or the successor servicer if
the successor is not the Trustee, prior to the Trustee, or the successor
servicer if the successor is not the Trustee, assuming such rights and
obligations, unless the Trustee elects to terminate any Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any such Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to the Servicer shall
be deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee, its
designee or the successor servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by or on behalf
of it, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the Due Dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided 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. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may waive, or permit a Subservicer
to waive, in whole or in part, a Prepayment Charge only under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan, (ii) such Prepayment Charge is not permitted to be
collected by applicable federal, state or local law or regulation or (iii) the
collection of such Prepayment Charge would be considered "predatory" pursuant to
written guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters. If a Prepayment Charge is waived other than as permitted by
the prior sentence, then the Servicer is required to pay the amount of such
waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account together
with and at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited into the Collection Account; provided, however, that
the Servicer shall not have an obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect at
such time.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to receive
any Basis Risk Payment and to secure their limited recourse obligation to pay to
the Offered Certificateholders Basis Risk CarryForward Amounts (prior to using
any Net Swap Receipts) For the avoidance of doubt, any Basis Risk CarryForward
Amounts shall be paid to the Offered Certificates first from the Excess Reserve
Fund Account and then from the Swap Account.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment for such date into the Excess Reserve
Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk CarryForward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in clause (iii) in the
definition thereof) (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk CarryForward
Amounts for such Distribution Date and (2) withdraw from the Excess Reserve Fund
Account amounts necessary to pay to such Class or Classes of Certificates the
Basis Risk CarryForward Amount. Such payments, along with payments from the Swap
Account, shall be allocated to those Classes on a pro rata basis based upon the
amount of Basis Risk CarryForward Amount owed to each such Class and shall be
paid in the priority set forth in Section 4.02(a)(iii)(T).
(ii) The Trustee shall account for the Excess Reserve Fund
Account as an asset of a grantor trust under subpart E, Part I of the
subchapter J of the Code and not an asset of any Trust REMIC. The
beneficial owners of the Excess Reserve Fund Account are the Class X
Certificateholders. For all federal tax purposes, amounts transferred by
the Upper Tier REMIC to the Excess Reserve Fund Account shall be treated
as distributions by the Trustee to the Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to
the Offered Certificateholders shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificates and then to
the respective Class or Classes of Offered Certificates. In addition, the
Trustee shall account for the Offered Certificateholders' rights to
receive payments of Basis Risk CarryForward Amounts (along with payments
of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts from the Swap Account) as rights in a limited
recourse interest rate cap contract written by the Class X
Certificateholders in favor of the Offered Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement,
the Trustee shall not be required to make any payments from the Excess
Reserve Fund Account except as expressly set forth in this Section 3.07(c)
and Sections 4.02(a)(iii)(T) and (V).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall cause to be
deposited into the Distribution Account on the Closing Date the Closing Date
Deposit Amount. The Trustee shall, promptly upon receipt, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution 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 4.02.
(e) The Trustee may invest the funds in the Distribution Account,
in one or more Permitted Investments, in accordance with Section 3.12. The
Servicer shall direct the Trustee to withdraw from the Distribution Account and
to remit to the Servicer no less than monthly, all income and gain realized from
the investment of the portion of funds deposited in the Distribution Account by
the Servicer (except during the Trustee Float Period) The Trustee may withdraw
from the Distribution Account any income or gain earned from the investment of
funds deposited therein during the Trustee Float Period for its own benefit.
(f) The Servicer shall give notice to the Trustee, and the Trustee
shall give notice to each Rating Agency and the Depositor of any proposed change
of the location of the Collection Account within a reasonable period of time
prior to any change thereof.
(g) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, the Trustee is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Trustee. Accordingly, each of the parties agrees
to provide to the Trustee upon its request from time to time such party's
complete name, address, tax identification number and such other identifying
information together with copies of such party's constituting documentation,
securities disclosure documentation and such other identifying documentation as
may be available for such party.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account") The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") Each Tax Service
Contract shall be assigned to the Trustee, or a successor servicer at the
Servicer's expense in the event that the Servicer is terminated as Servicer of
the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) above, the Servicer undertakes to perform such functions. To
the extent the related Mortgage provides for Escrow Payments, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse the Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; (vii) recover amounts deposited in error. As part of its
servicing duties, the Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine whether any such payments are made by the Mortgagor
in a manner and at a time that avoids the loss of the Mortgaged Property due to
a tax sale or the foreclosure of a tax lien. The Servicer assumes full
responsibility for the payment of all such bills within such time and shall
effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (such account or accounts,
the "Collection Account"), held in trust for the benefit of the Trustee. On
behalf of the Trustee, the Servicer shall deposit or cause to be deposited in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent such Insurance Proceeds and Condemnation Proceeds are not to be
applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with the express requirements of
law or in accordance with Accepted Servicing Practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to
Section 3.07(a)) by the Servicer.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. 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 in
accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee
(A) the Trustee Fee with respect to such Distribution Date and (B) all
Available Funds (without reduction for amounts owed to the Depositor or
the Trustee as provided for in the definition of "Available Funds") in
respect of the related Distribution Date together with all amounts
representing Prepayment Charges from the Mortgage Loans received during
the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (the Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay the Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by the Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by the
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (the Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on each Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each
Mortgage Loan that has previously been repurchased or replaced pursuant to
this Agreement, all amounts received thereon subsequent to the date of
purchase or substitution, as further described herein;
(vi) to reimburse the Servicer for (A) any P&I Advance or
Servicing Advance previously made which the Servicer has determined to be
a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (the Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(vii) to pay, or to reimburse the Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
serviced by the Servicer pursuant to Section 3.15 (the Servicer's right
for recovery or reimbursement has priority over the Trust);
(viii) to reimburse the Servicer or the Depositor for expenses
incurred by or reimbursable to the Servicer or the Depositor, as the case
may be, pursuant to Section 6.03 (the Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(ix) to reimburse the Servicer or the Trustee, as the case may
be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the repurchase obligation of the Responsible Party under
this Agreement that were included in the Repurchase Price of the Mortgage
Loan, including any expenses arising out of the enforcement of the
repurchase obligation, to the extent not otherwise paid pursuant to the
terms hereof (the Servicer's right for recovery or reimbursement has
priority over the Trust as stated in the definition of "Available Funds");
(x) to withdraw any amounts deposited in the Collection Account
in error;
(xi) to withdraw any amounts held in the Collection Account and
not required to be remitted to the Trustee on the Remittance Date
occurring in the month in which such amounts are deposited into the
Collection Account, to reimburse the Servicer for xxxxxxxxxxxx X&X
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the Collection Account upon
termination of this Agreement.
(c) 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, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification (as set forth in Section
4.01(d)) to the Trustee, on or prior to the next succeeding Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(a)(vi) above.
(d) The Servicer shall be responsible for reviewing and
reconciling the Collection Account in accordance with Accepted Servicing
Practices. The Servicer shall act promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account. (a) The Servicer may invest the funds in the Collection
Account and the related Escrow Account (to the extent permitted by law and the
related Mortgage Loan documents) and the Trustee may (but is not obligated to)
invest funds in the Distribution Account during the Trustee Float Period, and,
with respect to the portion of funds in the Distribution Account deposited by
the Servicer, shall (except during the Trustee Float Period) invest such funds
in the Distribution Account at the direction of the Servicer (for purposes of
this Section 3.12, such Accounts are referred to as an "Investment Account"), in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement; provided, however, that the Trustee shall
have no obligation to invest funds deposited into the Distribution Account by
the Servicer on the Remittance Date later than 10:00 a.m. (Pacific Standard
Time) If no investment instruction is given in a timely manner, the Trustee
shall hold the funds in the Distribution Account uninvested. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account (other than investments made during the
Trustee Float Period) shall be made in the name of the Trustee in Permitted
Investments selected by the Servicer. The Servicer shall be entitled to sole
possession (except with respect to investment direction of funds and any income
and gain realized on any investment in the Distribution Account during the
Trustee Float Period, which shall be for the sole benefit of the Trustee) over
each such related investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Servicer, or with respect
to investments during the Trustee Float Period, the Trustee or its agent (with a
copy to the Trustee or its agent if related to investment of funds in the
Distribution Account not during the Trustee Float Period), together with any
document of transfer necessary to transfer title to such investment to the
Servicer, or with respect to investments during the Trustee Float Period, the
Trustee or its agent. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
Servicer, or with respect to investments during the Trustee Float Period, the
Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account or Escrow Account held by or on behalf of
the Servicer, shall be for the benefit of the Servicer and shall be subject to
its withdrawal in the manner set forth in Section 3.11. The Servicer shall
deposit in the Collection Account or Escrow Account, as applicable, the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such loss.
(c) All income and gain realized from the investment of the
portion of funds deposited in the Distribution Account by the Servicer and held
by the Trustee, shall be for the benefit of the Servicer (except for any income
or gain realized from the investment of funds on deposit in the Distribution
Account during the Trustee Float Period, which shall be for the benefit of the
Trustee) and shall be subject to the Trustee's withdrawal in the manner set
forth in Section 3.07(e) The Servicer shall deposit in the Distribution Account
(except with respect to losses incurred during the Trustee Float Period) the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss immediately upon realization of such loss)
if made in accordance with this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
outstanding principal balance of such Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss to the improvements that are a part
of such property on a replacement cost basis and (iii) the maximum insurable
value of the improvements which are a part of such Mortgaged Property, in each
case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such REO Property on a
replacement cost basis. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy in respect thereof. Such flood insurance shall be in an
amount equal to the lesser of (i) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to Xxxxxx Xxx or Xxxxxxx Mac or
(ii) having a General Policy Rating of A:X or better from Best's (or such other
rating that is comparable to such rating) 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 two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
Collection Account from its own funds the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of itself and the Trustee claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee upon request with
copies of any such insurance policies and fidelity bond. The Servicer shall 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. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
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 the Mortgagor and becomes liable under the Mortgage
Note; provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and such substitution is in
the best interest of the Certificateholders as determined by the Servicer. In
connection with any assumption, modification or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed and shall forward to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
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 by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) 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 pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Trustee, taking into account, among other
things, the timing of foreclosure proceedings; provided, however, with respect
to any Second Lien Mortgage Loan for which the related first lien mortgage loan
is not included in the Trust Fund, if, after such Mortgage Loan becomes 180 days
or more delinquent, the Servicer determines that a significant net recovery is
not possible through foreclosure, such Mortgage Loan may be charged off and the
Mortgage Loan will be treated as a Liquidated Mortgage Loan giving rise to a
Realized Loss. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds from the
related Mortgaged Property, as contemplated in Section 3.11. 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 related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicer or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to reimburse the Servicer for any related
xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; third, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a liquidation or REO Disposition; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate) The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices how to proceed with
respect to the Mortgaged Property. In the event (a) the environmental inspection
report indicates that the Mortgaged Property is contaminated by hazardous or
toxic substances or wastes and (b) the Servicer determines, consistent with
Accepted Servicing Practices, to proceed with foreclosure or acceptance of a
deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable
costs associated with such foreclosure or acceptance of a deed in lieu of
foreclosure and any related environmental clean-up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to
be reimbursed from amounts in the Collection Account pursuant to Section 3.11.
In the event the Servicer determines not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
from general collections for all Servicing Advances made with respect to the
related Mortgaged Property from the Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the Servicer
pursuant to this paragraph or otherwise.
In the event the Servicer elects to charge off a Second Lien
Mortgage Loan 180 days or more delinquent pursuant to this Section 3.15, no
Second Lien Mortgage Loan shall be characterized as a Liquidated Mortgage Loan,
unless the Depositor consents in writing to such characterization after the
Servicer has provided the Depositor with a combined equity analysis of such
Second Lien Mortgage Loan and the related first lien mortgage loan; provided,
that if the Depositor has failed to notify the Servicer within 3 Business Days
of receipt of such combined equity analysis, then the Depositor shall be deemed
to have consented to such characterization. In the event the Servicer elects to
charge off a Second Lien Mortgage Loan 180 days or more delinquent pursuant to
this Section 3.15, the Servicer shall notify the Trustee of such election, which
notice may be provided in a Servicer Remittance Report delivered pursuant to
Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, on or before the last day of the month in which such payment in
full occurs, notify the Trustee by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Custodial File by
submitting a Request for Release (in writing or an electronic format acceptable
to the Trustee) to the Trustee. Upon receipt of such certification and Request
for Release, the Trustee shall promptly release the related Custodial File to
the Servicer within five (5) Business Days. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release in
written or electronic form, release the related Custodial File to the Servicer,
and the Trustee shall, at the direction of the Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings and the
Servicer shall retain the Mortgage File in trust for the benefit of the Trustee.
Such Request for Release shall obligate the Servicer to return each and every
document previously requested from the Custodial File to the Trustee when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan has
been charged-off or liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was charged-off or liquidated
and that all amounts received or to be received in connection with such
liquidation that are required to be deposited into the Collection Account have
been so deposited, or that such Mortgage Loan has become an REO Property, a copy
of the Request for Release shall be released by the Trustee to the Servicer or
its designee upon request therefor. Upon receipt of a Request for Release under
this Section 3.16, the Trustee shall deliver the related Custodial File to the
Servicer (at such Servicer's expense); provided, however, that in the event the
Servicer has not previously received copies of the relevant Mortgage Loan
Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the Responsible Party shall reimburse the Trustee
for any overnight courier charges incurred for the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
Servicer shall cause the deed or certificate of sale to be issued in the name of
the Trustee, on behalf of the Certificateholders. Upon written request by the
Servicer, the Trustee shall provide the Servicer with a power of attorney
prepared by the Servicer with respect to such REO Property.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee. The Trustee shall
have no obligations with respect to any REO Dispositions.
(c) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(d) The Servicer shall deposit net of reimbursement to the
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following the Servicer's receipt thereof in the Collection
Account all revenues received with respect to the related REO Property and shall
withdraw therefrom funds necessary for the proper operation, management and
maintenance of the REO Property.
(e) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess
of the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(g) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property as soon as possible, but in no event later than the conclusion
of the third calendar year beginning after the year of its acquisition by
Pooling-Tier REMIC-1 unless (i) the Servicer applies for an extension of such
period from the Internal Revenue Service pursuant to the REMIC Provisions and
Code Section 856(e)(3), in which event such REO Property shall be sold within
the applicable extension period, or (ii) the Servicer obtains for the Trustee an
Opinion of Counsel, addressed to the Depositor, the Trustee and the Servicer, to
the effect that the holding by the Pooling-Tier REMIC-1 of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause any
Trust REMIC to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of relevant state laws at any time. The Servicer shall
manage, conserve, protect and operate each REO Property for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by the Pooling-Tier
REMIC-1 of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. 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 Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the Adjustment Date and shall adjust the Scheduled Payment on the related
mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. In
the event that an Index becomes unavailable or otherwise unpublished, the
Servicer shall select a comparable alternative index over which it has no direct
control and which is readily verifiable. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer or the receipt of notice from
the Trustee that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC and
the examiners and supervisory agents thereof, access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon five (5) Business Days' prior written request and during normal business
hours at the offices of the Servicer or any Subservicer. Nothing in this Section
shall derogate from the obligation of any such party to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors and the
failure of any such party to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds collected
or held by, or under the control of, the 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 Trustee,
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, the Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert by
legal action or otherwise any claim or right of setoff against any Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the 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 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and REO Proceeds related to
such Mortgage Loan, the Servicing Fee with respect to each Mortgage Loan (less
any portion of such amounts retained by any Subservicer) In addition, the
Servicer shall be entitled to recover unpaid Servicing Fees out of related late
collections to the extent permitted in Section 3.11. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Servicer's responsibilities and obligations
under this Agreement; provided, however, that the Servicer may pay from the
Servicing Fee any amounts due to a Subservicer pursuant to a Subservicing
Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, and pursuant to Section 3.07(e), to direct
the Trustee to withdraw from the Distribution Account and remit to the Servicer
(except for monies invested during the Trustee Float Period), as additional
servicing compensation, interest or other income earned on the related portions
of deposits therein. The Servicer shall also be entitled as additional servicing
compensation, to interest or other income earned on deposits in the related
Escrow Account (to the extent permitted by law and the related Mortgage Loan
documents) in accordance with Section 3.12. The Servicer shall also be entitled
to retain net Prepayment Interest Excesses (to the extent not required to offset
Prepayment Interest Shortfalls), but only to the extent such amounts are
received by the Servicer.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer shall
deliver and shall cause each Subservicer engaged by the Servicer to deliver or
cause to be delivered to the Trustee (and the Trustee shall make available to
the Depositor and the Rating Agencies) on or before March 5th of each calendar
year, commencing in 2007, an Officer's Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Servicer or Subservicer, as
applicable, during the preceding calendar year and of its performance under this
Agreement or the applicable Subservicing Agreement, as the case may be, has been
made under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer or Subservicer, as applicable, has
fulfilled all of its obligations under this Agreement or the applicable
Subservicing Agreement, as the case may be, in all material respects, throughout
such year, or, if there has been a default in the fulfillment of any such
obligation in any material respect, specifying each such default known to such
officers and the nature and status thereof. Promptly after receipt of each such
Officer's Certificate, the Depositor shall review each such Officer's
Certificate and, if applicable, consult with the Servicer or Subservicer as to
the nature of any defaults by the Servicer or any related Subservicer in the
fulfillment of any of the Servicer's or any related Subservicer's obligations.
The obligations of the Servicer and any Subservicer under this Section apply to
the Servicer and any Subservicer that serviced a Mortgage Loan, as applicable,
during the applicable period, whether or not the Servicer or such Subservicer is
acting as the Servicer or a Subservicer at the time such Officer's Certificate
is required to be delivered. None of the Servicer or any Subservicer shall be
required to cause the delivery of any Officer's Certificate required by this
Section until March 10th in any given year so long as it has received written
confirmation from the Depositor that a Form 10-K is not required to be filed in
respect of the Trust for the preceding calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 5th of each calendar year commencing in 2007, the
Servicer and the Trustee shall deliver, and the Servicer shall cause each
Subservicer engaged by the Servicer and the Servicer and the Trustee shall cause
each Subcontractor utilized by the Servicer (or by any Subservicer) or the
Trustee, as applicable, and determined by the Servicer or the Trustee, as
applicable, pursuant to Section 3.02(e) to be "participating in a servicing
function" within the meaning of Item 1122 of Regulation AB (in each case, a
"Servicing Function Participant"), to deliver, each at its own expense, to the
Trustee (and the Trustee shall make available to the Depositor), a report on an
assessment of compliance with the Servicing Criteria applicable to it that
contains (A) a statement by such party of its responsibility for assessing
compliance with the Servicing Criteria applicable to it, (B) a statement that
such party used the Servicing Criteria to assess compliance with the applicable
Servicing Criteria, (C) such party's assessment of compliance with the
applicable Servicing Criteria as of and for the period ending the end of the
fiscal year covered by the Form 10-K required to be filed pursuant to Section
8.12, including, if there has been any material instance of noncompliance with
the applicable Servicing Criteria, a discussion of each such failure and the
nature and status thereof, and (D) a statement that a registered public
accounting firm has issued an attestation report on such Person's assessment of
compliance with the applicable Servicing Criteria as of and for such period.
Each such assessment of compliance report shall be addressed to the Depositor
and signed by an authorized officer of the applicable company, and shall address
each of the applicable Servicing Criteria set forth on Exhibit P hereto, or as
set forth in the notification furnished to the Depositor and the Trustee
pursuant to Section 3.23(c) The Servicer and the Trustee hereby acknowledge and
agree that their respective assessments of compliance will cover the items
identified on Exhibit P hereto as being covered by such party. The parties to
this Agreement acknowledge that where a particular Servicing Criteria has
multiple components, each party's assessment of compliance (and related
attestation of compliance) will relate only to those components that are
applicable to such party. Promptly after receipt of each such report on
assessment of compliance, the Depositor shall review each such report and, if
applicable, consult with the Servicer or the Trustee, as applicable, as to the
nature of any material instance of noncompliance with the Servicing Criteria
applicable to it (and each Subservicer or Servicing Function Participant engaged
or utilized by the Servicer, such Subservicer or the Trustee, as applicable), as
the case may be. None of the Servicer, the Trustee or any Subservicer or
Servicing Function Participant shall be required to cause the delivery of any
such assessments until March 10th in any given year so long as it has received
written confirmation from the Depositor that a Form 10-K is not required to be
filed in respect of the Trust for the preceding calendar year.
(b) Not later than March 5th of each calendar year commencing in
2007, the Trustee and the Servicer shall cause, and the Subservicer engaged by
the Servicer, and the Servicer and the Trustee shall cause each Servicing
Function Participant utilized by the Trustee or the Servicer, as applicable (or
by any Subservicer engaged by the Servicer), to cause, each at its own expense,
a registered public accounting firm (which may also render other services to
such party) and that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Trustee (and the Trustee shall make
available to the Depositor) to the effect that (i) it has obtained a
representation regarding certain matters from the management of such Person,
which includes an assertion that such Person has complied with the Servicing
Criteria applicable to it pursuant to Section 3.23(a) and (ii) on the basis of
an examination conducted by such firm in accordance with standards for
attestation engagements issued or adopted by the PCAOB, that attests to and
reports on such Person's assessment of compliance with the Servicing Criteria
applicable to it. In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it was unable
to express such an opinion. Each such related accountant's attestation report
shall be made in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act. Such report must be available for
general use and not contain restricted use language. Promptly after receipt of
each such accountants' attestation report, the Depositor shall review the report
and, if applicable, consult with the Servicer or the Trustee, as applicable, as
to the nature of any defaults by the Servicer or the Trustee (and each
Subservicer or Servicing Function Participant engaged or utilized by the
Servicer or the Trustee, as applicable, or by any Subservicer engaged by the
Servicer), as the case may be, in the fulfillment of any of the Servicer's, the
Trustee's or the applicable Subservicer's or Servicing Function Participant's
obligations hereunder or under any applicable sub-servicing agreement. None of
the Servicer or the Trustee or any Servicing Function Participant shall be
required to cause the delivery of any such attestation required by this
paragraph until March 10th in any given year so long as it has received written
confirmation from the Depositor that a Form 10-K is not required to be filed in
respect of the Trust for the preceding calendar year.
(c) Promptly upon written request from Depositor, the Servicer
shall notify the Trustee and the Depositor as to the name of each Subservicer
engaged by it and each Servicing Function Participant utilized by it, but only
to the extent there has been a change in the information in such notification
from notices previously delivered and the Trustee shall notify the Depositor as
to the name of each Servicing Function Participant utilized by it and each such
notice will specify what specific Servicing Criteria will be addressed in the
report on assessment of compliance prepared by such Servicing Function
Participant in each case, to the extent of any change from the prior year's
notice, if any. When the Servicer or the Trustee submits its assessment pursuant
to Section 3.23(a), the Servicer and the Trustee, as applicable, will also at
such time include the assessment (and related attestation pursuant to Section
3.23(b)) of each Servicing Function Participant utilized by it and by each
Subservicer engaged by it.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
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 successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such predecessor servicer pursuant to Section 3.10 or any
acts or omissions of the predecessor servicers hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of the predecessor servicer pursuant to Section 2.03 or
(iv) deemed to have made any representations and warranties of the Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer
shall contain a provision giving the successor servicer the option to terminate
such agreement in the event a successor servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as successor
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.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) to which it is party and the
Mortgage Loans then being serviced thereunder and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of such Subservicing Agreement to the assuming
party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date for deposit in the Distribution Account an
amount from its own funds equal to the Compensating Interest payable by the
Servicer for the related Distribution Date; provided, however, the Servicer is
not required to pay Compensating Interest on any Mortgage Loan subject to an
Interim Servicing Agreement for the period prior to the Servicing Transfer Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, 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 TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.27 Transfer of Servicing for Certain Mortgage Loans. Prior
to the Servicing Transfer Date, the Depositor shall use reasonable efforts to
cause New Century to comply with each of the servicing transfer requirements set
forth in the Interim Servicing Agreement and in accordance with customary
industry procedures.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date (provided, however, that with respect to any Balloon
Loan that is delinquent on its maturity date, the Servicer will not be required
to advance the principal portion of the related balloon payment but will be
required to continue to make P&I Advances in accordance with this Section
4.01(a) with respect to such Balloon Loan in an amount equal to the assumed
scheduled interest that would otherwise be due based on the original
amortization schedule for such Balloon Loan (with interest at the Adjusted Net
Mortgage Rate)), plus (ii) with respect to each REO Property, which REO Property
was acquired during or prior to the related Prepayment Period and as to which
such REO Property an REO Disposition did not occur during the related Prepayment
Period, an amount equal to the excess, if any, of the Scheduled Payments (with
each interest portion thereof net of the related Servicing Fee) that would have
been due on the related Due Date in respect of the related Mortgage Loans, over
the net income from such REO Property transferred to the Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of the Collection Account that Amounts Held for Future Distribution
have been, as permitted by this Section 4.01, used by the Servicer in discharge
of any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the Servicer with
respect to such Mortgage Loans and REO Properties. Any Amounts Held for Future
Distribution and so used shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Collection Account on or
before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall allocate from amounts then on deposit in the
Distribution Account in the following order of priority and to the extent of the
Available Funds remaining and, on such Distribution Date, shall make
distributions on the Certificates in accordance with such allocation:
(i) to the holders of each Class of Offered Certificates and to
the Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments
and (y) any Swap Termination Payment owed to the Swap Provider,
including, without limitation, any Senior Defaulted Swap Termination
Payment but not including any other Defaulted Swap Termination
Payment;
(B) to the Class A-1, Class A-2a, Class A-2b, Class A-2c and
Class A-2d Certificates, the related Accrued Certificate Interest
Distribution Amounts and any related Unpaid Interest Amounts for
such Distribution Date, allocated pro rata based on their respective
entitlements to those amounts;
(C) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date
or (2) with respect to which a Trigger Event is in effect, to the holders
of the related Class or Classes of Offered Certificates then entitled to
distributions of principal as set forth below, from amounts remaining on
deposit in the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Distribution Amount in
the following order of priority:
(1) to the Class A Certificates, allocated as described
in Section 4.02(b), until the respective Class Certificate
Balances thereof are reduced to zero; and
(2) sequentially to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 Certificates, in that order, until the respective
Class Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of Offered Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section
4.02(b), until the respective Class Certificate Balances
thereof are reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class M-4 Certificates in clause
(ii)(B)(e) above and (y) the Class M-5 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(7) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above and to the Class M-5 Certificates in clause
(ii)(B)(f) above and (y) the Class M-6 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(8) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above and to the Class M-6 Certificates in clause
(ii)(B)(g) above and (y) the Class B-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(9) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above and to the Class B-1 Certificates in clause
(ii)(B)(h) above and (y) the Class B-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(10) to the Class B-3 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amount distributed to the Class A Certificateholders in
clause (ii)(B)(a) above, to the Class M-1 Certificates in
clause (ii)(B)(b) above, to the Class M-2 Certificates in
clause (ii)(B)(c) above, to the Class M-3 Certificates in
clause (ii)(B)(d) above, to the Class M-4 Certificates in
clause (ii)(B)(e) above, to the Class M-5 Certificates in
clause (ii)(B)(f) above, to the Class M-6 Certificates in
clause (ii)(B)(g) above, to the Class B-1 Certificates in
clause (ii)(B)(h) above and to the Class B-2 Certificates in
clause (ii)(B)(i) above and (y) the Class B-3 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest Amount
for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest Amount
for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest Amount
for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest Amount
for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized Loss
Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest Amount
for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized Loss
Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest Amount
for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized Loss
Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest Amount
for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment (without regard to Net Swap Receipts) for such
Distribution Date;
(T) from funds on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
remaining Basis Risk CarryForward Amount with respect to the Offered
Certificates for such Distribution Date, allocated to the Offered
Certificates in the same order and priority in which the Accrued
Certificate Interest Distribution Amount is allocated among such
Classes of Certificates, with the allocation to the Class A
Certificates being (a) first, among the Class A Certificates, pro
rata, based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro rata,
based on any Basis Risk CarryForward Amounts remaining unpaid, in
order to reimburse such unpaid amounts;
(U) to the Swap Account, the amount of any remaining Defaulted
Swap Termination Payment (other than a Senior Defaulted Swap
Termination Payment) owed to the Swap Provider;
(V) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(U); and
(W) to the Class R Certificates, any remaining amount in the
Trust REMICs.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b, Class
A-2c, and Class A-2d Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(B) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively, to the
extent not otherwise previously paid from the Interest Remittance
Amount attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b, Class
A-2c and Class A-2d Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(B) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates, to the extent not otherwise
previously paid from the Interest Remittance Amount attributable to
Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
Any principal distributions allocated to the Group II Class A
Certificates shall be allocated sequentially, first to the Class A-2a
Certificates, until their Class Certificate Balance has been reduced to zero,
then to the Class A-2b Certificates, until their Class Certificate Balance has
been reduced to zero, then to the Class A-2c Certificates, until their Class
Certificate Balance has been reduced to zero and then to the Class A-2d
Certificates, until their Class Certificate Balance has been reduced to zero.
Notwithstanding the foregoing, on and after the Distribution Date on which the
aggregate Class Certificate Balances of the Subordinated Certificates and the
principal balance of the Class X Certificates have been reduced to zero, any
principal distributions allocated to the Group II Class A Certificates shall be
allocated pro rata among the Classes of Group II the Class A Certificates shall
be allocated, pro rata among the Class A Certificates, based on their respective
Class Certificate Balances, until their respective Class Certificate Balances
have been reduced to zero.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee as a reduction in the following order:
(1) First, to the amount of interest payable to the Class X
Certificates; and
(2) Second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and
Class B Certificates, based on the amount of interest to which
such Classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date and
the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (separately identifying the
components thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class
included in such distribution and any remaining Unpaid Interest Amounts
after giving effect to such distribution, any Basis Risk CarryForward
Amount for each Class and the amount of such Basis Risk CarryForward
Amount covered by withdrawals from the Excess Reserve Fund Account on such
Distribution Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation of the shortfall as between principal
and interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the related
Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicer and the Trustee (stated separately and in the aggregate) with
respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(xi) the amount of Advances included in the distribution on such
Distribution Date reported by the Servicer (and the Trustee as successor
servicer and any other successor servicer, if applicable) as of the close
of business on the Determination Date immediately preceding such
Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days, 91 to 120 days, 121 to 150 days, 151 to 180 days,
181 to 210 days, 211 to 240 days and 240+ days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last day of the related Due
Period;
(xiii) for each of the preceding 12 calendar months, or all
calendar months since the related Cut-off Date, whichever is less, the
aggregate dollar amount of the Scheduled Payments (A) due on all
outstanding Mortgage Loans on each of the Due Dates in each such month and
(B) delinquent 60 days or more on each of the Due Dates in each such
month;
(xiv) with respect to any Mortgage Loans that became REO
Properties during the preceding calendar month, the aggregate number of
such Mortgage Loans and the aggregate outstanding principal balance of
such Mortgage Loans as of the close of business on the last day of the
related Due Period;
(xv) the total number and outstanding principal balance of any
REO Properties (and market value, if available) as of the close of
business on the last Business Day of the related Due Period;
(xvi) whether a Trigger Event has occurred and is continuing
(separately identifying the components of the calculation resulting in the
existence of the Trigger Event and the aggregate outstanding balance of
all 60+ Day Delinquent Mortgage Loans);
(xvii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xviii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xix) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders with
respect to Unpaid Interest Amounts, Applied Realized Loss Amounts, and
Basis Risk CarryForward Amounts;
(xx) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xxi) the calculations of LIBOR and Swap LIBOR;
(xxii) the Subordinated Amount and Specified Subordinated Amount;
(xxiii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer;
(xxiv) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxv) the amount distributed on the Class X Certificates;
(xxvi) the amount of any Subsequent Recoveries for such
Distribution Date; and
(xxvii) the number of Mortgage Loans at the beginning and end of
the applicable reporting period, the pool factor (being the Stated
Principal Balance of the Mortgage Loans for the related Distribution Date
divided by the Cut-off Date Principal Balance), and the weighted average
interest rate, and weighted average remaining term.
In addition, each Form 10-D prepared and filed by the Trustee
pursuant to Section 8.12 shall include the following information with respect to
the related distribution:
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Trustee has actual knowledge
or has received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Trustee has actual knowledge or has received written notice.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, and the Depositor is limited, if
applicable, to the availability, timeliness and accuracy of the information
derived from the Servicer and the Responsible Parties. The Trustee shall make
available the above statement via the Trustee's internet website. The Trustee's
website will initially be located at xxxxx://xxx.xxx.xx.xxx/xxxx and assistance
in using the website can be obtained by calling the Trustee's investor relations
desk at 0-000-000-0000. 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 investor
relations desk and indicating such. The Trustee may 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. 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.
The Trustee shall make available to each Analytics Company, either
electronically or via the Trustee's internet website, each statement to
Certificateholders prepared pursuant to this Section 4.03(a) The Trustee (and
the Servicer, if such discrepancy results from or arises out of any information
provided by the Servicer pursuant to this Agreement) shall cooperate in good
faith with the Depositor to reconcile any discrepancies in such statements, and
the Trustee shall provide any corrections to such statements to each Analytics
Company as soon as reasonably practicable after the related Distribution Date.
The Trustee will also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement to Certificateholders
and may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
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 from time to time in effect.
(d) Not later than the Determination Date for each Distribution
Date (and not later than three Business Days after the end of the related
Prepayment Period in the case of any supplemental reporting of Principal
Prepayments made during such Prepayment Period), the Servicer shall furnish to
the Trustee, a monthly remittance advice statement (the "Servicer Remittance
Report") (in a format mutually agreed upon by the Servicer and the Trustee)
containing such information as shall be reasonably requested (i) by the
Depositor and the Responsible Party to enable the Depositor to disclose "static
pool information", as required by Item 1105 of Regulation AB, with respect to
the Mortgage Loans, and (ii) by the Trustee to enable the Trustee to provide the
reports required by Section 4.03(a) as to the accompanying remittance and the
period ending on the close of business on the last day of the related Prepayment
Period.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted [in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the
Servicer during the prior distribution period; and
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans.
Concurrently with each delivery of a Servicer Remittance Report to
the Trustee, the Servicer shall provide, in a manner consistent with the
preceding paragraph, a supplemental statement setting forth:
(i)the aggregate expenses reimbursed to the Servicer during the
prior distribution period pursuant to Section 3.11; and
(ii) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days, 91 to 120
days, 121 to 150 days, 151 to 180 days, 181 to 210 days, 211 to 240 days
and 240+ days; (b) as to which foreclosure or bankruptcy proceedings of
the related mortgagor have commenced; and (c) as to which REO Property has
been acquired.
The Trustee shall promptly forward the Servicer Remittance Report and the
related supplemental statement to the Depositor.
(e) For all purposes of this Agreement, with respect to any
Mortgage Loan, delinquencies shall be determined and reported by the Trustee,
from information provided by the Servicer, based on the "OTS" methodology for
determining delinquencies on mortgage loans similar to the Mortgage Loans. By
way of example, a Mortgage Loan would be delinquent with respect to a Scheduled
Payment due on a Due Date if such Scheduled Payment is not made by the close of
business on the Mortgage Loan's next succeeding Due Date, and a Mortgage Loan
would be more than 30-days Delinquent with respect to such Scheduled Payment if
such Scheduled Payment were not made by the close of business on the Mortgage
Loan's second succeeding Due Date. The Servicer hereby represents and warrants
to the Depositor that the Servicer is not subject to any delinquency recognition
policy established by the primary safety and soundness regulator, if any, of the
Servicer, that is more restrictive than the foregoing delinquency recognition
policy.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
"LIBOR". Until all of the Offered Certificates are paid in full, the Trustee
shall at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each LIBOR Determination Date. The Trustee
initially shall designate the Reference Banks (after consultation with the
Depositor) Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Trustee
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor) The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of Offered Certificates for
each Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the Offered Certificates are Outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the Offered Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the Offered Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Trustee to the most
junior Class of Subordinated Certificates then Outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Trustee shall
establish and maintain in its name, a separate non-interest bearing trust
account for the benefit of the holders of the Certificates (the "Swap Account")
as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts for that Distribution
Date will be deposited into the Swap Account. Funds in the Swap Account will be
distributed in the following order of priority:
(i)to the Swap Provider, all Net Swap Payments, if any, owed to
the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment,
including, without limitation, any Senior Defaulted Swap Termination
Payment but not including any other Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent
unpaid from Available Funds;
(v)to the Offered Certificates, to pay principal as described
and, in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount for prior or current Realized Losses not previously
reimbursed, after giving effect to payments and distributions from
Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro
rata, based on their Class Certificate Balances for such Distribution
Date, up to the Swap Payment Allocation for each Class of Class A
Certificates and to the extent unpaid from Available Funds (including
Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment
Allocation for each Class of Class M and Class B Certificates and to the
extent unpaid from Available Funds (including Basis Risk Payments on
deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis
Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward
Amounts, pro rata, based on their respective remaining unpaid Basis Risk
CarryForward Amount after the allocation of payments as set forth in
clauses (vi) and (vii) above;
(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid
from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap
Termination Payment owed to the Swap Provider for that Distribution Date;
and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust receives
a Swap Termination Payment, the Trustee shall use the Swap Termination Payment
to enter into a replacement interest rate swap agreement as directed by the
Depositor with a successor Swap Provider meeting the ratings requirements set
forth in the Interest Rate Swap Agreement being terminated on the same remaining
terms as those in the Interest Rate Swap Agreement being terminated, so long as
the Swap Termination Payment is sufficient to obtain such replacement interest
rate swap agreement. In the event that the Trust receives a Swap Termination
Payment and a successor Swap Provider cannot be obtained, then the Trustee shall
deposit the Swap Termination Payment into the reserve account that is a
sub-account of the Swap Account. On each subsequent Distribution Date (so long
as funds are available in the reserve account), the Trustee shall withdraw from
the reserve account and deposit into the Swap Account an amount equal to the
amount of any Net Swap Receipt due the Trust (calculated in accordance with the
terms of the original Interest Rate Swap Agreement) and treat such amount as a
Net Swap Receipt for purposes of determining the distributions from the Swap
Account. In no event shall the Trustee be responsible for the selection of any
successor or replacement Swap Provider or any shortfalls caused by a failure to
enter into a replacement interest rate swap agreement.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that, upon the Trust entering into a replacement
interest rate swap following the occurrence of an Additional Termination Event
of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the
Trust is entitled to receive a payment from a replacement swap provider, the
Trustee shall direct the replacement swap provider to make such payment to the
Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from
the Swap Account to the Swap Provider immediately upon receipt of such payment,
regardless of whether the date of receipt thereof is a Distribution Date. To the
extent that any Replacement Swap Provider Payment is made to an account other
than the Swap Account, then, notwithstanding anything to the contrary contained
in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid
to the Swap Provider immediately upon receipt of such Replacement Swap Provider
Payment, regardless of whether the date of receipt thereof is a Distribution
Date and without regard to anything to the contrary contained in this Agreement.
For the avoidance of doubt, the parties agree that the Swap Provider shall have
first priority to any Replacement Swap Provider Payment over the payment by the
Trust to Certificateholders, the Servicer, any Responsible Party, the Trustee or
any other Person.
The Trustee shall account for the Swap Account as an asset of a
grantor trust under subpart E, Part I of subchapter J of the Code and not as an
asset of any Trust REMIC created pursuant to this Agreement. The beneficial
owners of the Swap Account are the Class X Certificateholders. For federal
income tax purposes, Net Swap Payments and Swap Termination Payments (other than
Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall
be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by
the Holder of the Class X Certificates (in respect of the Class IO Interest and,
if applicable, the Class X Interest) and second, other than any Defaulted Swap
Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable
Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as
and to the extent provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Trustee to the Offered
Certificateholders shall be accounted for by the Trustee, for federal income tax
purposes, as amounts paid first to the Holders of the Class X Certificates in
respect of the Class X Interest and (to the extent remaining after payments to
the Swap Provider) the Class IO Interest, and then to the respective Class or
Classes of Offered Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of Offered Certificates to receive payments of
Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk
CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward
Amounts payable from the Excess Reserve Fund Account) as rights in a separate
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
With respect to the failure of the Swap Provider to perform any of
its obligations under the Interest Rate Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Trustee shall send any notices and make any demands, on behalf of
the Trust as are required under the Interest Rate Swap Agreement. To the extent
that the Swap Provider fails to make any payment required under terms of the
Interest Rate Swap Agreement, the Trustee shall immediately demand that Xxxxxx
Xxxxxxx, the guarantor of the Swap Provider's obligations under the guarantee of
Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any and all
payments then required to be made by Xxxxxx Xxxxxxx pursuant to such guarantee.
In addition, in the event a "Delivery Amount" (as defined in the Interest Rate
Swap Agreement) was due but was not delivered by the Swap Provider as required
by the Interest Rate Swap Agreement, the Trustee shall deliver a notice of
failure to transfer collateral on the next Business Day following such failure,
in accordance with the terms of the Interest Rate Swap Agreement. The Trustee
shall cause any replacement swap provider to provide a copy of the related
replacement interest rate swap agreement to the Trustee and the Depositor.
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 denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X and
Class P Certificates in the name of the Depositor or its designee. On a date as
to which the Depositor notifies the Trustee, the Trustee shall transfer the
Class X and Class P Certificates in the name of the NIM Trustee, or such other
name or names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to the NIM Trustee or to such other Person or Persons as
the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) 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 Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
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 such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor, or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and 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,
authenticate, and deliver the Certificates which 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 cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private 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 said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X, Class P or Class R Certificates to the Depositor or an
Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, in the event that a transfer of a
Private Certificate which is a Physical Certificate 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 shall certify to the Trustee in writing the facts
surrounding the transfer in substantially the form set forth in Exhibit H (the
"Transferor Certificate") and either (i) there shall be delivered to the Trustee
a letter in substantially the form of Exhibit I (the "Rule 144A Letter") or (ii)
there shall be delivered to the Trustee at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate 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 will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private 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 and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information 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 Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and the Servicer 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.
Except with respect to (i) the transfer of the Class R, Class X or
Class P Certificates to the Depositor or an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
Person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, or (ii) in the case of an
ERISA-Restricted Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee, which Opinion of Counsel shall not be an
expense of the Servicer, the Depositor, the Trustee or the Trust Fund, addressed
to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Depositor, the Trustee or the Servicer
to any obligation in addition to those expressly undertaken in this Agreement or
to any liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate,
other than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 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 by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual 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 Residual
Certificate are expressly subject to the following provisions:
(i)Each Person holding or acquiring any Ownership Interest in a
Residual 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 Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in
a Residual 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 Residual 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 Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section 5.02(c) shall be absolutely null and void and shall vest no rights
in the purported Transferee. If any purported transferee shall become a
Holder of a Residual Certificate in violation of the provisions of this
Section 5.02(c), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Residual Certificate. The Trustee shall
not have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact a Non-Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became a Non-Permitted Transferee, all
payments made on such Residual 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; and
(v)The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code as
a result of a Transfer of an Ownership Interest in a Residual Certificate
to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual 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 Trust Fund or the Trustee, to the
effect that the elimination of such restrictions will not cause any Trust REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates are
Outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, 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 Residual Certificate is not transferred, directly or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by a
Person that is a Non-Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository (and the Trustee consents) of its intent to terminate the book-entry
system through the Depository and, upon receipt of notice of such intent from
the Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of definitive, fully registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicer, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of 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 the Definitive Certificates as Certificateholders hereunder;
provided, that the Trustee shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing.
Each Certificate presented or surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with its customary practice. No service charge shall be made for any
registration of transfer or exchange of Private Certificates, 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 Private
Certificates.
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 (b) there is delivered to the Depositor, the Servicer and the
Trustee such security or indemnity as may be required by them to hold 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) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor and any agent of the Servicer, the Depositor 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 of the Servicer,
the Trustee, the Depositor, nor any agent of the Servicer, the Depositor 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 which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 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 in the United States where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent located at DB Services Tennessee, 000 Xxxxxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Transfer Unit for such purposes. The
Trustee shall give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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. (a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) 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;
provided, however, that the successor or surviving Person to the Servicer shall
be qualified to service mortgage loans on behalf of, Xxxxxx Xxx or Xxxxxxx Mac.
As a condition to the succession to the Servicer under this Agreement by any
Person (i) into which the Servicer may be merged or consolidated, or (ii) which
may be appointed as a successor to the Servicer, the Servicer shall provide to
the Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably necessary
to enable the Trustee, pursuant to Section 8.12(g), to accurately and timely
report the event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if
such reports under the Exchange Act are then required to be filed under the
Exchange Act).
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their respective
directors, officers, employees or agents shall be under any liability to 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 which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and 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 and its
Affiliates, the Sponsor, the Servicer and any director, officer, employee or
agent of the Depositor, the Sponsor or the Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense 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 related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. 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 which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and the Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
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 Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor out of
the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Sections 7.01 and 10.07, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the Servicer, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Depositor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that the Servicer determines that it will no longer
engage in the business of servicing mortgage loans, the Servicer may assign its
rights under this Agreement, provided that, (i) the Depositor in its sole
discretion has consented, which consent shall not be unreasonably withheld, (ii)
the Rating Agencies' ratings of the Certificates in effect immediately prior to
such action will not be qualified, reduced or withdrawn as a result thereof (as
evidenced by a letter to such effect from the Rating Agencies) and (iii) the
Servicer shall be liable for all costs and expenses associated with the transfer
of servicing, provided, further, that the Servicer shall indemnify and hold each
of the Trust Fund, the Trustee, the Depositor, any sub-servicer, the successor
servicer and each Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that such party may sustain in
any way related to such assignment except with respect to a successor servicer's
failure to comply with the terms of this Agreement. No assignment by the
Servicer shall become effective until a successor servicer acceptable to the
Depositor and the Trustee shall have assumed in writing the Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement. Any such assignment shall not relieve the Servicer of responsibility
for any of the obligations specified herein except to the extent that such
responsibilities have been expressly assumed by the successor servicer.
Section 6.05 Additional Indemnification by the Servicer; Third-Party
Claims. (a) The Servicer shall indemnify the Responsible Party, the Depositor,
the Sponsor and the Trustee and any director, officer, employee or agent of the
Depositor, the Sponsor or the Trustee and hold 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 them may sustain in any way related to (i) any breach by the
Servicer of any of its representations and warranties referred to in Section
2.03(a), (ii) any error in any tax or information return prepared by the
Servicer or (iii) the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement (including,
without limitation, the failure to deliver accurate and complete information on
a timely basis pursuant to Section 4.03(d)) The Servicer immediately shall
notify the Depositor and the Trustee if such claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Responsible Party or the Trustee in respect of
such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall indemnify the Depositor, the Sponsor, the Trustee
and any director, officer, employee or agent of the Depositor, the Sponsor or
the Trustee and hold 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 them may
sustain in any way related to any failure by the Servicer or any Subservicer
engaged by the Servicer or any Subcontractor utilized by the Servicer to deliver
any information, report, certification or accountants' letter when and as
required under Sections 3.22, 3.23, 6.02 or 8.12, including without limitation
any failure by the Servicer to identify pursuant to Section 3.02(e) any
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then the Servicer shall contribute to the amount
paid or payable by the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and the
Servicer, on the other, in connection with the Servicer's obligations pursuant
to this Section 6.05. This Section 6.05 shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default" wherever
used herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor or by the Trustee, or to the Servicer, the
Depositor and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten in the case of a failure to observe or perform any of the obligations set
forth in Sections 3.02, 3.22, 3.23, 6.02 or 8.12), after the earlier of (i) the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Depositor or by the Trustee, or to
the Servicer, the Depositor and the Trustee by Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or by the Depositor, or to the Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(g) any withdrawal or downgrade of two or more levels (i.e., from
"Above Average" to "Below Average" or the equivalent) of the servicer rating, as
of the Closing Date, of the Servicer by any Rating Agency which results in a
downgrade, qualification or withdrawal of the rating assigned to any Class of
Certificates by any Rating Agency.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
written direction of a majority of the Voting Rights, the Trustee 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 Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Trustee shall not be
required to give written notice to the Servicer of the occurrence of an Event of
Default described in clauses (b) through (g) of this Section 7.01 unless and
until a Responsible Officer of the Trustee has actual knowledge of the
occurrence of such an event. In the event that a Responsible Officer of the
Trustee has actual knowledge of the occurrence of an Event of Default described
in clause (a) of this Section 7.01, the Trustee shall give written notice to the
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided, that if such failure is the failure to make a P&I Advance,
the Trustee shall send such notice prior to 12:00 noon, New York time, on the
Distribution Date and, if the Event of Default of the Servicer was the failure
to make a P&I Advance, the Trustee, as successor servicer, shall make such P&I
Advance on the Distribution Date that such notice was delivered. On and after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. Subject to Section 7.02, 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
of such predecessor Servicer, or thereafter be received with respect to the
Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.05, be the successor to such 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 P&I Advances or Servicing Advances pursuant
to Section 3.24 or Section 7.01. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Collection Account and the Distribution Account which the Servicer would
be entitled to receive (in addition to income on investments or gain related to
the Distribution Account for the benefit of the Trustee during the Trustee Float
Period) Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act or at the written request of Certificateholders entitled to at
least a majority of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to such servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of such servicer hereunder. Any successor to such servicer shall be
an institution which is a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such terminated servicer (other than liabilities
of such terminated servicer under Section 6.03 incurred prior to termination of
the Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided, 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. Pending appointment of a successor to a servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, 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 the Servicing Fee Rate and amounts paid to the predecessor
Servicer from investments. 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 predecessor servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor servicer
(excluding set-up costs and other administrative expenses of the successor
servicer), and in all other cases the successor servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
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 3.13.
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 and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before 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 their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
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 are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
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 willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations 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 on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates 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.
(d) The Trustee shall be permitted to utilize one or more
Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Trustee complies with Section 3.02(e) as if the
Trustee were a "Servicer" pursuant to that Section. The Trustee shall indemnify
the Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold 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 them may sustain in any way related to the failure of the Trustee to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Trustee to identify pursuant to Section
3.02(e) any Subcontractor that is a Servicing Function Participant. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, 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 and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any 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;
(c) 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;
(d) 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 to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and with respect to the investment of funds in the Distribution Account
during the Trustee Float Period);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an Event of Default, 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; and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Interest Rate Swap Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and authentication of 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
Distribution Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
servicer).
The Trustee executes the Interest Rate Swap Agreement and the
Certificates not in its individual capacity but solely as Trustee of the Trust
Fund created by this Agreement, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Trustee on behalf of the Trust Fund in the
Interest Rate Swap Agreement and the Certificates is made and intended not as a
personal undertaking or agreement by the Trustee but is made and intended for
the purpose of binding only the Trust Fund.
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 were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and
any interest or investment income earned on funds deposited in the Distribution
Account during the Trustee Float Period. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Trust Fund against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any error in any tax or information return prepared by the Servicer or
incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Certificates or the Interest Rate Swap Agreement, or (c) the
performance of any of the Trustee's duties under this Agreement, the
Certificates or the Interest Rate Swap Agreement, other than any loss,
liability, or expense (i) resulting from any breach of the Servicer's
obligations in connection with this Agreement for which the Servicer has
performed its obligation to indemnify the Trustee pursuant to Section 6.05, (ii)
resulting from any breach of any Responsible Party's obligations in connection
with this Agreement for which the related Responsible Party has performed its
obligations to indemnify the Trustee pursuant to Section 2.03(j) or (iii)
incurred because of willful misconduct, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Trustee under this Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misconduct, the Trust Fund shall pay or reimburse the
Trustee, for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
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 this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor or the Servicer and their Affiliates; provided, however, that such
entity cannot be an Affiliate of the Depositor or the Servicer other than the
Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which 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. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, 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 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 8.09 Merger or Consolidation of the 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 the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
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. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, the Trustee shall notify the Depositor
of such succession or appointment and shall furnish to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary for the Trustee to accurately and timely
report, pursuant to Section 8.12(g), the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act).
Section 8.10 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 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 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by the Servicer
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 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, 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 applicable 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;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such 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 separate trustees and co-trustees, when
and 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
Servicer 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 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. 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 Trust REMIC and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
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
Trust REMIC 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 to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC be treated
as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(d) prepare and forward 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, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the Transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-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 matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(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 Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination 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);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other Person as may be required to
sign such returns by the Code or state or local laws, regulations or rules; and
(j) maintain records relating to each Trust REMIC created
hereunder, including the income, expenses, assets, and liabilities thereof on a
calendar year basis and on the accrual method of accounting and the fair market
value and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for each Trust REMIC, within the
meaning of Treasury Regulations Section 1.860F-4(d), and the Trustee is hereby
designated as agent of such Certificateholder for such purpose (or if the
Trustee is not so permitted, such Holder shall be the Tax Matters Person in
accordance with the REMIC Provisions) In such capacity, the Trustee shall, as
and when necessary and appropriate, represent each Trust REMIC created hereunder
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 each Trust REMIC created hereunder, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of each Trust REMIC created hereunder, and
otherwise act on behalf of each Trust REMIC in relation to any tax matter or
controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Charges, the rights of the Class X Certificateholders to receive
amounts in the Excess Reserve Fund Account and the Swap Account (subject to the
obligation to pay Basis Risk CarryForward Amounts and Upper-Tier CarryForward
Amounts) and the rights of the Offered Certificateholders to receive Basis Risk
CarryForward Amounts and Upper-Tier CarryForward Amounts as the beneficial
ownership of interests in a grantor trust, and not as obligations of any Trust
REMIC created hereunder, for federal income tax purposes. The Trustee shall file
or cause to be filed with the Internal Revenue Service Form 1041 or such other
form as may be applicable and shall furnish or cause to be furnished to the
Class P Certificateholders, Class X Certificateholders and the Offered
Certificateholders the respective amounts described above that are received, in
the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten 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 the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Certificates of the right to receive Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts and
Upper-Tier CarryForward Amounts from the Swap Account. Thereafter, the Depositor
shall provide to the Trustee promptly upon written request therefor any
additional information or data that the Trustee may, from time to time,
reasonably request to enable the Trustee to perform its duties under this
Agreement; provided, however, that the Depositor shall not be required to
provide any information regarding the Mortgage Loans that the Servicer is
required to provide to the Trustee pursuant to this Agreement. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide pursuant to
this paragraph accurate information or data to the Trustee on a timely basis.
Neither the Servicer nor the Trustee shall (i) permit the creation
of any interests in any Trust REMIC other than the regular and residual
interests set forth in the Preliminary Statement, (ii) receive any amount
representing a fee or other compensation for services (except as otherwise
permitted by this Agreement or the related Mortgage Loan documents) or (iii)
otherwise knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any Trust REMIC as a REMIC or (ii)
result in the imposition of a tax upon any Trust REMIC or the Trust Fund
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee receives an Opinion of Counsel (at the expense of
the party seeking to take such action or, if such party fails to pay such
expense, at the expense of the Trust Fund, but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
the Trust Fund, any Trust REMIC created hereunder, endanger such status or
result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee if such
tax arises out of or results from negligence of the Trustee in the performance
of any of its obligations under this Agreement, (ii) the Servicer and the
Responsible Party, jointly, in the case of any such minimum tax, and the
Servicer if such tax arises out of or results from a breach by the Servicer of
any of its obligations under this Agreement, (iii) the Responsible Party if such
tax arises out of or results from the Responsible Party's obligation to
repurchase a Mortgage Loan pursuant to Section 2.03, or (iv) in all other cases,
or if the Trustee, the Servicer or the Responsible Party fails to honor its
obligations under the preceding clause (i), (ii), or (iii), any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the reporting
requirements of the Trust under the Exchange Act. The Trustee shall prepare for
execution by the Depositor any Forms 8-K, 10-D and 10-K required by the Exchange
Act and the rules and regulations of the Commission thereunder, in order to
permit the timely filing thereof, pursuant to the terms of this Section 8.12,
and the Trustee shall file (via the Commission's Electronic Data Gathering and
Retrieval System ("XXXXX")) such Forms executed by the Depositor. The Trustee
shall have no duty to verify information received by it from other Persons
(other than Subcontractors utilized by the Trustee) in connection with its
duties under this Section 8.12.
(b) Within 15 calendar days after each Distribution Date (subject
to permitted extensions under the Exchange Act), the Trustee shall prepare and
file on behalf of the Trust any Form 10-D required by the Exchange Act, in form
and substance as required by the Exchange Act. The Trustee shall file each Form
10-D with a copy of the related Monthly Statement attached thereto. Any
disclosure in addition to the Monthly Statement that is required to be included
on Form 10-D ("Additional Form 10-D Disclosure") shall be prepared by the party
responsible for preparing such disclosure as set forth on Exhibit Q hereto and
provided to the Trustee in XXXXX-compatible form at the email address for the
Trustee set forth in Section 10.05, using Exhibit V, and the Trustee shall
compile such disclosure pursuant to the following paragraph. As used in this
Agreement, XXXXX-compatible form means an electronic information storage format
acceptable to the Trustee and the party providing such information. The Trustee
will have no duty or liability for any failure hereunder to determine or prepare
any Additional Form 10-D Disclosure, except as set forth in the next paragraph.
As set forth on Exhibit Q hereto, within 5 calendar days after the
related Distribution Date, certain parties to this Agreement shall be required
to provide to the Trustee and the Depositor, to the extent known by such
applicable parties, any Additional Form 10-D Disclosure, if applicable. The
Trustee shall compile all such information provided to it in a Form 10-D
prepared by it.
After preparing the Form 10-D, the Trustee shall forward
electronically a draft copy of the Form 10-D to the Depositor for review,
verification and execution by the Depositor. No later than 2 Business Days prior
to the 15th calendar day after the related Distribution Date, an officer of the
Depositor shall sign the Form 10-D and return an electronic or fax copy of such
signed Form 10-D (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 10-D cannot be filed on time or if a previously
filed Form 10-D needs to be amended, the Trustee will follow the procedures set
forth in Section 8.12(f)(ii) The signing party at the Depositor can be
contacted at the Depositor's address for notices set forth in Section
10.5(b)(ii)(a), or such other address as to which the Depositor has provided
prior written notice to the Trustee. The Depositor acknowledges that the
performance by the Trustee of its duties under this Section 8.12(b) related to
the timely preparation and filing of Form 10-D is contingent, in part, upon the
Servicer and the Depositor and any other Person obligated to provide Additional
Form 10-D Disclosure as set forth on Exhibit Q hereto observing all applicable
deadlines in the performance of their duties under this Section 8.12(b) The
Trustee shall have no liability for any loss, expense, damage, or claim arising
out of or with respect to any failure to properly prepare and/or timely file
such Form 10-D, where such failure results from the Trustee's inability or
failure to obtain or receive, on a timely basis, any information from any party
hereto (other than the Trustee or any Subcontractor utilized by the Trustee)
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct.
(c) Within 90 days after the end of each fiscal year of the Trust
or such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline"), commencing in March 2007, the Trustee shall prepare and file on
behalf of the Trust a Form 10-K, in form and substance as required by the
Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Trustee within the applicable
time frames set forth in this Agreement, (i) an annual compliance statement for
the Servicer and each Subservicer engaged by the Servicer and the Trustee, as
described under Section 3.22, (ii)(A) the annual reports on assessment of
compliance with servicing criteria for the Trustee, the Servicer, each
Subservicer engaged by the Servicer and each Servicing Function Participant
utilized by the Servicer or the Trustee, as described under Section 3.23, and
(B) if any such report on assessment of compliance with servicing criteria
described under Section 3.23 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or such report on
assessment of compliance with servicing criteria described under Section 3.23 is
not included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, (iii)(A) the
registered public accounting firm attestation report for the Trustee, the
Servicer, each Subservicer engaged by the Servicer and each Servicing Function
Participant utilized by the Servicer or the Trustee, as described under Section
3.23, and (B) if any registered public accounting firm attestation report
described under Section 3.23 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a certification in the form attached
hereto as Exhibit L, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Commission (the "Sarbanes Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization. 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 prepared by the party responsible for preparing such
disclosure as set forth on Exhibit X hereto and provided to the Trustee in
XXXXX-compatible form at the email address for the Trustee set forth in Section
10.05, using Exhibit V, and the Trustee shall compile such disclosure pursuant
to the following paragraph. 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 on Exhibit R hereto, no later than March 1st of each
year (or, in the case of the Servicer, March 5th of each year) that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007, certain
parties to this Agreement shall be required to provide to the Trustee and the
Depositor, to the extent known by such applicable parties, any Additional Form
10-K Disclosure, if applicable. The Trustee shall compile all such information
provided to it in a Form 10-K prepared by it.
After preparing the Form 10-K, the Trustee shall forward
electronically a draft copy of the Form 10-K to the Depositor for review,
verification and execution by the Depositor. No later than 5:00 p.m. EST on the
3rd Business Day prior to the 10-K Filing Deadline, an officer of the Depositor
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. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Trustee will follow the procedures set forth
in Section 8.12(f)(ii) The signing party at the Depositor can be contacted at
the Depositor's address for notices set forth in Section 10.5(b)(ii)(a), or such
other address as to which the Depositor has provided prior written notice to the
Trustee. The Depositor and the Servicer acknowledge that the performance by the
Trustee of its duties under this Section 8.12(c) related to the timely
preparation and filing of Form 10-K is contingent, in part, upon the Servicer
(and any Subservicer or Servicing Function Participant engaged by the Servicer)
and the Depositor and any other Person obligated to provide Additional Form 10-K
Disclosure as set forth on Exhibit R hereto, observing all applicable deadlines
in the performance of their duties under this Section 8.12(c), Section 8.12(d),
Section 3.22 and Section 3.23. The Trustee shall have no liability for any loss,
expense, damage or claim arising out of or with respect to any failure to
properly prepare and/or timely file such Form 10-K, where such failure results
from the Trustee's inability or failure to obtain or receive, on a timely basis,
any information from any party hereto (other than the Trustee or any
Subcontractor utilized by the Trustee) needed to prepare, arrange for execution
or file such Form 10-K, not resulting from its own negligence, bad faith or
willful misconduct.
(d) In connection with the execution of a Sarbanes Certification,
the Trustee shall sign a certification (in the form attached hereto as Exhibit
M, with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission) for the benefit of the Depositor and its
officers, directors and Affiliates, and the Servicer shall sign a certification
solely with respect to the Servicer (in the form attached hereto as Exhibit N,
with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission) for the benefit of the Depositor, the Trustee and
their respective officers, directors and Affiliates. Each such certification
shall be delivered to the Depositor no later than March 10th of each year (or if
such day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Sarbanes Certification no later than the time set
forth for the delivery to the Trustee of the signed Form 10-K pursuant to
Section 8.12(d) for such year. In the event that prior to the filing date of the
Form 10-K in March of each year, the Trustee or the Servicer has actual
knowledge of information material to the Sarbanes Certification, that party
shall promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and the Sponsor and their officers, directors, employees, agents
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Trustee's obligations under this Section 8.12(d) or any material misstatement or
material omission contained in any information, report, certification,
accountants' letter or other material provided in written or electronic form
pursuant to Sections 3.23 and 8.12 of this Agreement and Exhibits Q, R and S to
this Agreement provided by or on behalf of the Trustee or any Subcontractor
utilized by the Trustee (excluding any information, report, certification,
accountants' letter or other materials provided in written or electronic form by
or on behalf of any Person other than the Trustee or any Subcontractor utilized
by the Trustee), negligence, bad faith or willful misconduct in connection
therewith, and (ii) the Servicer shall indemnify and hold harmless the
Depositor, the Sponsor, the Trustee and their respective officers, directors,
employees, agents and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Servicer's obligations under this Section 8.12(d) or any material
misstatement or material omission, negligence, bad faith or willful misconduct
of the Servicer in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless any indemnified party,
then (i) the Trustee agrees in connection with a breach of the Trustee's
obligations under this Section 8.12(d) or any material misstatement or material
omission contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form pursuant to
Sections 3.23 and 8.12 of this Agreement and Exhibits T, U and V to this
Agreement provided by or on behalf of the Trustee or any Subcontractor utilized
by the Trustee (excluding any information, report, certification, accountants'
letter or other materials provided in written or electronic form by or on behalf
of any Person other than the Trustee or any Subcontractor utilized by the
Trustee), negligence, bad faith or willful misconduct in connection therewith
that it shall contribute to the amount paid or payable by the Depositor and the
Sponsor as a result of the losses, claims, damages or liabilities of the
Depositor and the Sponsor in such proportion as is appropriate to reflect the
relative fault of the Depositor and the Sponsor on the one hand and the Trustee
on the other and (ii) the Servicer agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and the Servicer, on the other hand, in connection with a breach of the
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of the
Servicer in connection therewith.
(e) Upon any filing with the Commission, the Trustee shall
promptly deliver to the Depositor a copy of each such executed report, statement
or information.
(f) (i) The obligations set forth in paragraphs (a) through (d) of
this Section shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. Prior to
January 30 of the first year in which the Trustee is able to do so under
applicable law, the Trustee shall file a Form 15 Suspension Notification with
respect to the Trust, with a copy to the Depositor. At any time after the filing
of a Form 15 Suspension Notification, if the number of Holders of the Offered
Certificates of record exceeds the number set forth in Section 15(d) of the
Exchange Act or the regulations promulgated pursuant thereto which would cause
the Trust to again become subject to the reporting requirements of the Exchange
Act, the Trustee shall recommence preparing and filing reports on Form 10-K,
10-D and 8-K as required pursuant to this Section 8.12 and the parties hereto
shall again have the obligations set forth in this Section.
(ii) In the event that the Trustee is unable to timely file with
the Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed pursuant to this Agreement because required
disclosure information was either not delivered to it or delivered to it
after the delivery deadlines set forth in this Agreement, the Trustee will
immediately notify the Depositor and the Servicer. In the case of Form
10-D and 10-K, the Depositor, Servicer and Trustee will thereupon
cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of
Form 8-K, the Trustee will, upon receipt of all disclosure information
required to be included on Form 8-K, include such disclosure information
on the next Form 10-D. In the event that any previously filed Form 8-K,
10-D or 10-K needs to be amended, the party to this Agreement deciding
that an amendment to such Form 8-K, 10-D or 10-K is required will notify
the Depositor, the Trustee and the Servicer and such parties will
cooperate to prepare any necessary Form 8-KA, 10-DA or 10-KA. Any Form 15,
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by
an officer of the Depositor. The Depositor and the Servicer acknowledge
that the performance by the Trustee of its duties under this Section
8.12(f) related to the timely preparation and filing of Form 15, a Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon the
Servicer and the Depositor observing all applicable deadlines (and the
related grace periods thereto) in the performance of their duties under
this Section 8.12 and Sections 3.22 and 3.23. The Trustee shall have no
liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file any such
Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where
such failure results from the Trustee's inability or failure to obtain or
receive, on a timely basis, any information from any party hereto (other
than the Trustee or any Subcontractor utilized by the Trustee) needed to
prepare, arrange for execution or file such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(g) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and
also if requested by the Depositor, the Trustee shall prepare and file on behalf
of the Trust any Form 8-K, as required by the Exchange Act, provided that the
Depositor shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K ("Form 8-K Disclosure
Information") shall be prepared by the party responsible for preparing such
disclosure as set forth on Exhibit S hereto and compiled by the Trustee pursuant
to the following paragraph. The Trustee will have no duty or liability for any
failure hereunder to determine or prepare any Form 8-K Disclosure Information or
any Form 8-K, except as set forth in the next paragraph.
As set forth on Exhibit S hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon (Eastern
Standard Time) on the 2nd Business Day after the occurrence of a Reportable
Event certain parties to this Agreement shall be required to provide to the
Depositor and the Trustee, to the extent known by such applicable parties, any
Form 8-K Disclosure Information, if applicable. The Trustee shall compile all
such information provided to it in a Form 8-K prepared by it.
After preparing the Form 8-K, the Trustee shall forward
electronically a draft copy of the Form 8-K to the Depositor for review,
verification and execution by the Depositor. No later than the end of the 3rd
Business Day after the Reportable Event, an officer of the Depositor shall sign
the Form 8-K and return an electronic or fax copy of such signed Form 8-K (with
an original executed hard copy to follow by overnight mail) to the Trustee. If a
Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be
amended, the Trustee will follow the procedures set forth in Section
8.12(f)(ii) The signing party at the Depositor can be contacted at the
Depositor's address for notices set forth in Section 10.5(b)(ii)(a), or such
other address as to which the Depositor has provided prior written notice to the
Trustee. The Depositor acknowledges that the performance by the Trustee of its
duties under this Section 8.12(g) related to the timely preparation and filing
of Form 8-K is contingent, in part, upon the Servicer and the Depositor and any
other Person obligated to provide Form 8-K Disclosure Information as set forth
on Exhibit S hereto providing such information to the Trustee in
XXXXX-compatible form at the email address for the Trustee set forth in Section
10.05, using Exhibit V, observing all applicable deadlines in the performance of
their duties under this Section 8.12(g) The Trustee shall have no liability for
any loss, expense, damage or claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 8-K, where such failure results
from the Trustee's inability or failure to obtain or receive, on a timely basis,
any information from any party hereto (other than the Trustee or any
Subcontractor utilized by the Trustee) needed to prepare, arrange for execution
or file such Form 8-K, not resulting from its own negligence, bad faith or
willful misconduct.
(h) The Trustee shall have no liability for any loss, expense,
damage or claim arising out of or resulting from (i) the accuracy or inaccuracy
of any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form
8-K Disclosure Information (excluding any information therein provided by the
Trustee or any Subcontractor utilized by the Trustee) provided to the Trustee in
connection with the preparation of Forms 10-D, 10-K and 8-K pursuant to this
Section 8.12, or (ii) the failure of the Depositor to timely execute and return
for filing any Forms 10-D, 10-K and 8-K required to be filed by the Trustee
pursuant to this Section 8.12, in either case, not resulting from the Trustee's
own negligence, bad faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of the
Excess Reserve Fund Account, Swap Account and the Interest Rate Swap Agreement.
For federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account and the Swap Account as beneficially owned by the holders of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust,
within the meaning of subpart E, Part I of subchapter J of the Code. The Trustee
shall treat the rights that each Class of Offered Certificates has to receive
payments of Basis Risk CarryForward Amounts, and to the extent not paid from the
Excess Reserve Fund Account, Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts from the Swap Account (together
with Basis Risk CarryForward Amounts from the Excess Reserve Fund Account) as
rights to receive payments under an interest rate cap contract written by the
Class X Certificateholder in favor of each such Class and beneficially owned by
each such Class through the grantor trust. Accordingly, each Class of
Certificates (excluding the Class X, Class P and Class R Certificates) will be
comprised of two components - an Upper-Tier Regular Interest and an interest in
an interest rate cap contract, and the Class X Certificates will be comprised of
four components - two Upper-Tier Regular Interests (the Class X Interest and the
Class IO Interest), an interest in the Excess Reserve Fund Account, subject to
obligation to pay Basis Risk CarryForward Amounts, and ownership of the Swap
Account and the Interest Rate Swap Agreement, subject to the obligation to pay
Upper-Tier CarryForward Amounts including, but without duplication, Basis Risk
CarryForward Amounts. The Trustee shall allocate the issue price for a Class of
Certificates among the respective components for purposes of determining the
issue price of the Upper-Tier Regular Interest component based on information
received from the Depositor. Unless otherwise advised by the Depositor in
writing, for federal income tax purposes, the Trustee is hereby directed to
assign a value of zero to the right of each Holder of a Offered Certificate to
receive the related Upper-Tier CarryForward Amounts and, without duplication,
the related Basis Risk CarryForward Amounts for purposes of allocating the
purchase price of a Offered Certificate acquired by an initial Holder thereof
between such right and the related Upper-Tier Regular Interest.
Holders of Offered Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest available
for such payments and amounts payable on the Class IO Interest (such excess, a
"Class IO Shortfall"), first from interest and then from principal distributable
on the Offered Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such Offered Certificates based on
the amount of interest otherwise payable to such Class of Offered Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of Offered
Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Offered
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of Offered Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment, such excess shall be deemed first paid to the related
Upper-Tier Regular Interest and then paid to the Class X Certificates in a
manner analogous to Class IO Shortfalls.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer, the Responsible Party and the Trustee created
hereby with respect to the Trust Fund shall terminate upon the earlier of (a)
the purchase, on or after the Optional Termination Date by the Servicer, of all
Mortgage Loans (and REO Properties) at the price equal to the sum of (i) 100% of
the unpaid principal balance of each Mortgage Loan (other than in respect of REO
Property) plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, (ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Servicer at the expense of the Servicer, plus accrued
and unpaid interest on each Mortgage Loan at the applicable Mortgage Rate and
(y) the unpaid principal balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, and (iii) any Swap Termination Payment owed to the
Swap Provider pursuant to the Interest Rate Swap Agreement, 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. In no event shall
the trusts created hereby continue beyond the expiration of 21 years from the
death of the 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.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the Servicer shall have deposited in the Collection Account an
amount to be remitted to the NIM Trustee that, together with such remaining
proceeds, will be sufficient to pay the outstanding principal amount of and
accrued and unpaid interest on the NIM Securities, to the extent the NIM
Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer 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 Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder and the Swap Provider. If
the Servicer elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, the Servicer shall notify, by the 25th day of the month preceding
the month of the final distribution, the Servicer shall notify the Depositor and
the Trustee of the date the Servicer intends to terminate the Trust Fund and of
the applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, 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 not earlier than the 10th day and not later
than the 15th day of the month of such final distribution. Any such Notice of
Final Distribution 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 amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) 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 of Final Distribution to each
Rating Agency at the time such Notice of Final Distribution is given to
Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer, the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicer, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Servicer exercises its purchase option with respect to the Mortgage Loans 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, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on any Trust REMIC as
defined in Section 860F of the Code, or (ii) cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are Outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer, and, by no later than the next Distribution Date after such sale,
shall distribute to the Certificateholders the proceeds of such sale in complete
liquidation of each Trust REMIC; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each Trust REMIC stating that pursuant to Treasury Regulations
Section 1.860F-1, the first day of the 90-day liquidation period for each such
Trust REMIC was the date on which the Trustee sold the assets of the Trust Fund
to the Servicer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer, the Responsible Party and the Trustee,
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or to supplement any
provision herein which may be inconsistent with any other provision herein,
(iii) to add to the duties of the Depositor or the Servicer, (iv) to add any
other provisions with respect to matters or questions arising hereunder or (v)
to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided that any amendment pursuant to clauses
(iv) or (v) above shall not, as evidenced by an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund),
adversely affect in any material respect the interests of any Certificateholder;
and provided, further, that any such amendment pursuant to clause (iv) or (v)
above shall not be deemed to adversely affect in any material respect the
interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency stating that the amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to 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. The Trustee, the Depositor, the Responsible Party and
the Servicer also may at any time and from time to time amend this Agreement,
but without the consent of the Certificateholders to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of each Trust REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on any Trust REMIC pursuant to
the Code that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code; provided,
that the Trustee has been provided an Opinion of Counsel, which opinion shall be
an expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66(2)/3% of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders 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
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66(2)/3% or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the grantor trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the
Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
shall be deemed not to be Outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with (including the
obtaining of any required consents); 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.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 10.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 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.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either 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
conveyances 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 transferred,
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 Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency 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 Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies (which may be provided electronically via the Trustee's
website) of the following:
(i) Each report to Certificateholders described in
Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor or the
Underwriter, Xxxxxx Xxxxxxx Capital I Inc. or Xxxxxx Xxxxxxx & Co. Incorporated,
(1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000; (2) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx - Legal Counsel
(Securities), 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (3) Xxxx
Xxxxxxxx, Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000; (4) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan
Operations, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (5) Xxxxx Xxxxxx, Xxxxxx
Xxxxxxx - RFPG, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (6) in
the case of a direction or demand, notification to the following email
addresses: Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx, Xxxxxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx,
Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of the Servicer, 0 Xxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000, Attention: Xxxx Xxxxx, Facsimile No. (000) 000-0000, or such
other address as may be hereafter furnished to the other parties hereto and the
Swap Provider by the Servicer in writing; (c) in the case of the Trustee, to
Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attention: Trust Administration MS06C2 or such other address
as the Trustee may hereafter furnish to the other parties hereto in writing;
provided, however, all reports, statements, certifications and information
required to be provided to the Trustee pursuant to Section 8.12 for filing shall
be electronically forwarded to XXXxx.Xxxxxxxxxxxxx@xx.xxx; (d) in the case of
the Responsible Party, NC Capital Corporation, 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxx, President, and the Swap
Provider in writing, or such other address as may be hereafter furnished to the
other parties hereto by the Responsible Party in writing; (e) in the case of the
Swap Provider to Xxxxxx Xxxxxxx Capital Services Inc., Transaction Management
Group, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Chief Legal
Officer, Facsimile No. (000) 000-0000, or such other address as the Swap
Provider may hereafter furnish to the Depositor, the Trustee and the Servicer;
in the case of each of the Rating Agencies, the address specified therefor in
the definition corresponding to the name of such Rating Agency. 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. Notwithstanding anything to the
contrary contained herein, except as provided in Section 6.04, this Agreement
may not be assigned by the Servicer without the prior written consent of the
Trustee and the Depositor.
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 created hereby, 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
created hereby, 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 herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
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 5 Business Days prior notice, it will permit any representative of the
Depositor or the Trustee during such Person's normal business hours, to examine
all the books of account, records, reports and other papers of such Person
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 and independent
public accountants (and by this provision the Servicer hereby authorizes said
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 of the Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Rights of the Swap Provider. The Swap Provider shall
be deemed a third-party beneficiary of this Agreement to the same extent as if
it were a party hereto and shall have the right to enforce its rights under this
Agreement.
Section 10.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor in good faith for delivery
of information under these provisions on the basis of evolving interpretations
of Regulation AB. In connection with the Trust, the Servicer and the Trustee
shall cooperate fully with the Depositor to deliver to the Depositor (including
its assignees or designees), any and all statements, reports, certifications,
records and any other information available to such party and reasonably
necessary in the good faith determination of the Depositor to permit the
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Servicer and the Trustee, as applicable, reasonably
believed by the Depositor to be necessary in order to effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
XXXXXX XXXXXXX CAPITAL I INC., as
Depositor
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive Director
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
as Servicer
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Associate
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
NC CAPITAL CORPORATION,
as Responsible Party
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
SCHEDULE I
Mortgage Loan Schedule
(Available Upon Request to Trustee)
SCHEDULE II
Xxxxxx Xxxxxxx Capital Inc.
Mortgage Pass-Through Certificates,
Series 2006-NC2
Representations and Warranties of Xxxxx Fargo, as Servicer
Xxxxx Fargo hereby makes the representations and warranties set
forth in this Schedule II to the Depositor and the Trustee as of the Closing
Date. Capitalized terms used but not otherwise defined in this Schedule II shall
have the meaning ascribed thereto in the Agreement to which this Schedule II is
attached.
(1) Xxxxx Fargo is duly organized as a corporation and is validly
existing and in good standing under the federal laws of the United States
of America and is duly authorized and qualified to transact any and all
business contemplated by this Pooling and Servicing Agreement to be
conducted by Xxxxx Fargo in any state in which a Mortgaged Property
securing a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the extent
necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling
and Servicing Agreement;
(2) Xxxxx Fargo has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
Xxxxx Fargo the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor,
the Responsible Party, the other Servicer and the Trustee, constitutes a
legal, valid and binding obligation of Xxxxx Fargo, enforceable against
Xxxxx Fargo in accordance with its terms; except to the extent that (a)
the enforceability thereof 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 the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Xxxxx Fargo, the servicing of the Mortgage Loans required to
be serviced by Xxxxx Fargo hereunder, the consummation by Xxxxx Fargo of
any other of the transactions herein contemplated, and the fulfillment of
or compliance with the terms hereof are in the ordinary course of business
of Xxxxx Fargo and will not (A) result in a breach of any term or
provision of the organizational documents of Xxxxx Fargo or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to
which Xxxxx Fargo is a party or by which it may be bound, or any law,
statute, rule, order, regulation, judgment or decree applicable to Xxxxx
Fargo or its property of any court, regulatory body, administrative agency
or governmental body having jurisdiction over Xxxxx Fargo; and Xxxxx Fargo
is not a party to, bound by, or in breach or violation of any indenture or
other agreement or instrument, or subject to or in violation of any law,
statute, rule, order, regulation, judgment or decree of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which (w) materially and adversely affects or, to
Xxxxx Fargo's knowledge, would in the future materially and adversely
affect, the ability of Xxxxx Fargo to perform its obligations under this
Pooling and Servicing Agreement, (x) materially and adversely affects or,
to Xxxxx Fargo's knowledge, would in the future materially and adversely
affect, the business, operations, financial condition, properties or
assets of Xxxxx Fargo taken as a whole, (y) impair the ability of the
Trust to realize on the Mortgage Loans, or (z) impair the value of the
Mortgage Loans;
(4) Xxxxx Fargo has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans;
(5) Xxxxx Fargo does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Pooling and Servicing Agreement;
(6) No action, suit, proceeding or investigation is pending or
threatened against Xxxxx Fargo, before any court, administrative agency or
other tribunal asserting the invalidity of this Pooling and Servicing
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which, either in
any one instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of Xxxxx Fargo, or in any material impairment of the right or
ability of Xxxxx Fargo to carry on its business substantially as now
conducted, or in any material liability on the part of Xxxxx Fargo, or
which would draw into question the validity of this Pooling and Servicing
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of Xxxxx Fargo contemplated herein, or
which would be likely to impair materially the ability of Xxxxx Fargo to
perform under the terms of this Pooling and Servicing Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Xxxxx Fargo of, or compliance by Xxxxx Fargo with, this
Pooling and Servicing Agreement or the servicing of the Mortgage Loans as
evidenced by the consummation by Xxxxx Fargo of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(8) With respect to each Mortgage Loan serviced by Xxxxx Fargo
hereunder, to the extent Xxxxx Fargo serviced such Mortgage Loan and to
the extent Xxxxx Fargo provided monthly reports to the three credit
repositories, Xxxxx Fargo has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE III
Xxxxxx Xxxxxxx Capital Inc.
Mortgage Pass-Through Certificates,
Series 2006-NC2
Representations and Warranties of the Responsible Party as to the Mortgage
Loans
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule III as to the Mortgage Loans only to the
Depositor, the Servicer and the Trustee, as of March 30, 2006 (the
"Securitization Closing Date") (unless otherwise expressly indicated)
Capitalized terms used but not otherwise defined in this Schedule III shall have
the meanings ascribed thereto in the Purchase Agreement.
(1) Mortgage Loans as Described. NC Capital Corporation has
delivered to the Sponsor, as of March 1, 2006, the Data Tape Information
and that Data Tape Information and the information set forth on the
Mortgage Loan Schedule (other than item (21) thereof, as to which NC
Capital Corporation makes no representation or warranty) are true and
correct, including, without limitation, the terms of the Prepayment
Charges, if any, as of the Securitization Closing Date;
(2) Payments Current. All payments required to be made up to March
1, 2006 for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor
has any payment under the Mortgage Loan been 30 days or more delinquent at
any time since the origination of the Mortgage Loan. The first Scheduled
Payment was or shall be made with respect to the Mortgage Loan on its Due
Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(3) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments
or ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is
not yet due and payable. Neither NC Capital Corporation nor any Affiliate
has advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage
Loan, except for interest accruing from the date of the Mortgage Note or
date of disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day which precedes by one month the Due Date of the first
installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument which
has been recorded, if necessary to protect the interests of the Sponsor,
and which has been delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule, the Data Tape Information or
included in the Mortgage File. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any,
to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule and the
Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx
Guides or by Xxxxxxx Mac, as well as all additional requirements set forth
in Section 3.13 of the Pooling and Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, the Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac, as well as all
additional requirements set forth in Section 3.13 of the Pooling and
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming New Century Mortgage Corporation and its
successors and assigns as mortgagee, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Trustee
upon the consummation of the transactions contemplated by this Agreement.
NC Capital Corporation has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either, including, without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained
or realized by any attorney, firm or other person or entity, and no such
unlawful items have been received, retained or realized by NC Capital
Corporation;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions therein relating to Prepayment Charges, have
been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and
NC Capital Corporation shall maintain in its possession, available for the
Sponsor's or the Trustee's inspection, and shall deliver to the Sponsor
upon demand, evidence of compliance with all such requirements;
(8) No Satisfaction of Mortgage. Other than with respect to any
Mortgage Loan that was subject to a Principal Prepayment in Full occurring
after the Cut-off Date but prior to the Securitization Closing Date, the
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination
or rescission. NC Capital Corporation has not waived the performance by
the Mortgagor of any action, if the Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has NC Capital
Corporation waived any default resulting from any action or inaction by
the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low rise condominium project, or an
individual unit in a planned unit development or a de minimis planned unit
development which is in each case four stories or less; provided, however,
that any condominium unit, planned unit development, mobile home (double
wide only) or manufactured dwelling shall conform with the applicable
Xxxxxx Mae and Xxxxxxx Mac requirements regarding such dwellings and that
no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation, a log home or, except as specified on the
Mortgage Loan Schedule, a mobile home erected thereon or by a mixed use
property, a property in excess of 10 acres or other unique property types.
As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. With respect to
any Mortgage Loan secured by a Mortgaged Property improved by manufactured
housing, (i) such Mortgage Loan conforms with the applicable Xxxxxx Mae or
Xxxxxxx Mac requirements regarding mortgage loans related to manufactured
dwellings, (ii) the related manufactured housing unit is permanently
affixed to the land, (iii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming New Century Mortgage Corporation as
mortgagee, (iv) the applicable laws of the jurisdiction in which the
related Mortgaged Property is located will deem the manufactured dwelling
located on such Mortgaged Property to be a part of the real property on
which such dwelling is located, and (v) such Manufactured Home Mortgage
Loan is secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien (with respect to each First Lien
Mortgage Loan) or second lien (with respect to each Second Lien Mortgage
Loan) on the Mortgaged Property, including all buildings and improvements
on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage
is subject only to:
(i) with respect to a Second Lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments
not yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting, enforceable and
perfected first lien and first priority (with respect to each First
Lien Mortgage Loan) security interest on the property described
therein and NC Capital Corporation has full right to sell and assign
the same to the Sponsor
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to Prepayment Charges) All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and any such agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. NC Capital Corporation or its Affiliate
has reviewed all of the documents constituting the Servicing File and NC
Capital Corporation has made such inquiries as it deems necessary to make
and confirm the accuracy of the representations set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the Purchase Agreement, NC Capital Corporation was the sole owner of
record and holder of the Mortgage Loan and the indebtedness evidenced by
each Mortgage Note and upon the sale of the Mortgage Loans to the Sponsor,
NC Capital Corporation retained the Mortgage Files or any part thereof
with respect thereto not delivered to the Sponsor or the Sponsor's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan was not assigned or
pledged, and NC Capital Corporation had good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan
to the Sponsor free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full
right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to the Purchase Agreement and following the sale of each Mortgage
Loan, the Sponsor will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. After the Securitization Closing Date, NC Capital
Corporation will have no right to modify or alter the terms of the sale of
the Mortgage Loan and NC Capital Corporation will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(15) LTV. No First Lien Mortgage Loan has an LTV greater than 100%,
and no Second Lien Mortgage Loan has an CLTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac with respect
to Mortgage Loans and each such title insurance policy is issued by a
title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring New Century Mortgage Corporation, its successors and assigns, as
to the first priority lien (with respect to a First Lien Mortgage Loan) or
the second priority lien (with respect to a Second Lien Mortgage Loan) of
the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (i), (ii), (iii) and
(iv) of representation 10 of this Schedule III, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment to the Mortgage Rate and
Scheduled Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
NC Capital Corporation, its successor and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including New Century
Mortgage Corporation and NC Capital Corporation, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by New Century Mortgage Corporation or NC Capital
Corporation;
(17) No Defaults. Other than payments due but not yet 30 or more
days delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither NC
Capital Corporation nor its Affiliates or any of their respective
predecessors have waived any default, breach, violation or event which
would permit acceleration;
(18) No Mechanics' Liens. As of the date of origination, there are
no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under law could give
rise to such liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised
and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: NC Capital
Corporation purchased the Mortgage Loan from New Century Mortgage
Corporation, its affiliate, that meets the requirements set forth in
clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by New Century Mortgage Corporation, using
application forms and related credit documents approved by New Century
Mortgage Corporation, (ii) New Century Mortgage Corporation approved each
application and the related credit documents before a commitment by the
correspondent was issued, and no such commitment was issued until New
Century Mortgage Corporation agreed to fund such Mortgage Loan, (iii) the
closing documents for such Mortgage Loan were prepared on forms approved
by New Century Mortgage Corporation and (iv) such Mortgage Loan was
actually funded by New Century Mortgage Corporation and was purchased by
New Century Mortgage Corporation at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were
not falsified and contain no untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make
the information and statements therein not misleading. Principal payments
on the Mortgage Loan commenced no more than sixty days after funds were
disbursed in connection with the Mortgage Loan. The Mortgage Rate is as
set forth on Mortgage Loan Schedule hereto (including in the case of
Adjustable Rate Mortgage Loans, the interest rate and payment limitations
set forth on Mortgage Loan Schedule hereto) All Mortgage Loans have Due
Dates on the first day of each month except as specified on the Mortgage
Loan Schedule. Each Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears and is not calculated on a
simple interest basis. The monthly principal payments on each Mortgage
Loan is sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty years from
commencement of amortization. There is no negative amortization allowed in
the terms of any Mortgage Note. None of the Mortgage Loans allows for
negative amortization or the conversion of the interest rate thereon from
an adjustable rate to a fixed rate or from a fixed rate to an adjustable
rate. No Mortgage Loan is a Balloon Loan;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Index. With respect to Adjustable Rate Mortgage Loans, the
Index set forth in the Mortgage Note is LIBOR;
(23) Occupancy of the Mortgaged Property. As of the Securitization
Closing Date the Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including, but not
limited to, certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Sponsor to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Sponsor;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form, other than the assignee's name and recording information
not yet returned from the recording office, and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by NC Capital Corporation are not subject
to the bulk transfer or similar statutory provisions in effect in any
applicable jurisdiction;
(28) due-on-sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, and such provision is
enforceable;
(29) No Buydown Provisions No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by NC Capital Corporation, the Mortgagor, or
anyone on behalf of the Mortgagor, or paid by any source other than the
Mortgagor nor does it contain any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority (with
respect to a First Lien Mortgage Loan) or second lien priority (with
respect to a Second Lien Mortgage Loan) by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest
or by other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the
Mortgaged Property and NC Capital Corporation has no knowledge of any such
proceedings in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
NC Capital Corporation and its Affiliates with respect to the Mortgage
Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects
legal and proper. With respect to escrow deposits and Escrow Payments, if
any, all such payments are in the possession of, or under the control of,
NC Capital Corporation and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has
been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No
escrow deposits or Escrow Payments or other charges or payments due NC
Capital Corporation have been capitalized under the Mortgage or the
Mortgage Note. All Mortgage Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related
Mortgage Note. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Rate, the same index was
used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the
related Mortgage Note. NC Capital Corporation or an Affiliate executed and
delivered any and all notices required under applicable law and the terms
of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
the monthly payment adjustments. Any interest required to be paid pursuant
to state, federal and local law has been properly paid and credited;
(34) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage under
any insurance policy or bankruptcy bond related to the Mortgage Loans,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by NC Capital Corporation or by
any officer, director, or employee of NC Capital Corporation or any
designee of NC Capital Corporation or any corporation in which NC Capital
Corporation or any officer, director, or employee had a financial interest
at the time of placement of such insurance;
(35) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(36) Servicemembers Civil Relief Act. The Mortgagor has not notified
NC Capital Corporation, and NC Capital Corporation has no knowledge of any
relief requested or allowed to the Mortgagor under the Servicemembers
Civil Relief Act or any similar state statutes;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
NC Capital Corporation, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of Xxxxxx Mae or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the originator has complied with all applicable law with
respect to the making of the Mortgage Loans;
(39) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(40) Value of Mortgaged Property. NC Capital Corporation has no
knowledge of any circumstances existing that could reasonably be expected
to adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay during
any period materially faster or slower than similar mortgage loans held by
NC Capital Corporation generally secured by properties in the same
geographic area as the related Mortgaged Property;
(41) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or
has existed on or prior to the Securitization Closing Date (whether or not
known to NC Capital Corporation on or prior to such date) which has
resulted or will result in an exclusion from, denial of, or defense to
coverage under any primary mortgage insurance (including, without
limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of
actions, representations, errors, omissions, negligence, or fraud of NC
Capital Corporation, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason
of such insurer's breach of such insurance policy or such insurer's
financial inability to pay;
(42) Escrow Analysis. With respect to each Mortgage, NC Capital
Corporation or its Affiliate has within the last twelve months (unless
such Mortgage was originated within such twelve month period) analyzed the
required Escrow Payments for each Mortgage and adjusted the amount of such
payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance
with RESPA and any other applicable law;
(43) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing
Practices;
(44) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by NC Capital Corporation to the Sponsor, that
Seller has full right and authority and is not precluded by law or
contract from furnishing such information to the Sponsor;
(45) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a generally accepted practice;
(46) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans (a) is covered by the Home Ownership and Equity Protection
Act of 1994 or (b) is classified as a "high cost home," "threshold,"
"covered" (excluding a "covered home loan" as defined in clause (1) of the
definition of such term under the New Jersey Home Ownership Security Act
of 2002), "high risk home", "predatory" or similar loan under any other
applicable federal, state or local law (including without limitation any
regulation or ordinance) (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) a Mortgage Loan categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard & Poor's
Glossary, and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act;
(47) Prepayment Penalty. No Mortgage Loan has a prepayment penalty
period in excess of three years. Any prepayment penalty is in an amount
equal to the lesser of (a) the maximum amount permitted under applicable
state law, and (b) if the Mortgaged Property is secured by residential
real property located in a state other than Arizona, Maine, Massachusetts,
New York, South Carolina or Wisconsin, six months interest on the related
prepaid amount;
(48) Conformance with Agency and Underwriting Standards. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable to
Xxxxxxx Mac or Xxxxxx Xxx and neither NC Capital Corporation nor any
Affiliate has made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(49) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life insurance
policy;
(50) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by NC Capital Corporation or any
Affiliates generally;
(51) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Originator's Underwriting Guidelines;
(52) Conversion to Fixed Interest Rate. With respect to each
Adjustable Rate Mortgage Loan, the Mortgage Loan is not a Convertible
Mortgage Loan;
(53) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(54) Compliance with Anti-Money Laundering Laws. NC Capital
Corporation or an Affiliate has complied with all applicable anti-money
laundering laws and regulations, including, without limitation, the USA
Patriot Act of 2001;
(55) Fair Credit Reporting Act. NC Capital Corporation or an
Affiliate has, in its capacity as prior servicer for each Mortgage Loan,
fully furnished, 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 (three of the credit
repositories), on a monthly basis;
(56) Xxxxxx Mae Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Xxx Guides;
(57) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time
of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Originator or any Affiliate of the
Originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower-cost credit product then offered by any mortgage
lending Affiliate of the Originator, the Originator referred the related
Mortgagor's application to such Affiliate for underwriting consideration;
(58) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor's equity
in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan;
(59) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the Originator, as servicer, shall not impose
such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(60) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor obtained a
prepaid single-premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a condition
to closing, such Mortgage Loan;
(61) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than $60,000 which
would have resulted in an unprofitable origination, no Mortgagor was
charged "points and fees" (whether or not financed) in an amount greater
than 5% of the principal amount of such Mortgage Loan, such 5% limitation
is calculated in accordance with Xxxxxx Mae's anti-predatory lending
requirements as set forth in the Xxxxxx Xxx Guides;
(62) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation; and
(63) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
SCHEDULE IV
Xxxxxx Xxxxxxx Capital Inc.
Mortgage Pass-Through Certificates,
Series 2006-NC2
Representations and Warranties as to the Responsible Party
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule IV to the Depositor, the Servicer and the
Trustee, as of the Closing Date:
(a) Due Organization and Authority. The Responsible Party is a
corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state wherein it
owns or leases any material properties or where a Mortgaged
Property is located, if the laws of such state require licensing
or qualification in order to conduct business of the type
conducted by the Responsible Party, and in any event the
Responsible Party is in compliance with the laws of any such
state to the extent necessary; the Responsible Party has the full
corporate power, authority and legal right to execute and deliver
this Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement by the
Responsible Party and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding
and enforceable obligations of the Responsible Party, regardless
of whether such enforcement is sought in a proceeding in equity
or at law; and all requisite corporate action has been taken by
the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party
in accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the
Responsible Party's charter or by-laws or any legal restriction
or any agreement or instrument to which the Responsible Party is
now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result
in the violation of any law, rule, regulation, order, judgment or
decree to which the Responsible Party or its property is subject,
or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its
properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible
Party, before any court, administrative agency or other tribunal
asserting the invalidity of this Agreement, seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets
of the Responsible Party, or in any material impairment of the
right or ability of the Responsible Party to carry on its
business substantially as now conducted, or in any material
liability on the part of the Responsible Party, or which would
draw into question the validity of this Agreement or of any
action taken or to be taken in connection with the obligations of
the Responsible Party contemplated herein, or which would be
likely to impair materially the ability of the Responsible Party
to perform under the terms of this Agreement; and
(d) No Consent Required. No consent, approval, authorization or order
of, or registration or filing with, or notice to any court or
governmental agency or body including the U.S. Department of
Housing and Urban Development ("HUD"), the Federal Housing
Administration ("FHA") or the U.S. Department of Veterans Affairs
("VA") is required for the execution, delivery and performance by
the Responsible Party of or compliance by the Responsible Party
with this Agreement or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date.
SCHEDULE V
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates
Series 2006-NC2
Representations and Warranties of Xxxxxx Xxxxxxx Capital I Inc. as to the
Mortgage Loans
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee, as of the Closing Date:
(1) Immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trust on the Closing Date, the Depositor had good title
to the Mortgage Loans, free and clear of any liens, charges, claims or
encumbrances whatsoever;
(2) The original loan balance of each Group I Mortgage Loan was
within Xxxxxxx Mac's and Xxxxxx Mae's dollar amount limits for conforming
one to four family mortgage loans; and
(3) No Group I Mortgage Loan has a Prepayment Charge period in
excess of three years.
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN 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 CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, XXXX 00-0, XXXX 00-0, XXXX 95-60 OR PTCE 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No: A-1-[__]
A-2a-[__]
A-2b-[__]
A-2c-[__]
A-2d-[__]
M-1-[__]
M-2-[__]
M-3-[__]
M-4-[__]
M-5-[__]
M-6-[__]
B-1-[__]
B-2-[__]
B-3-[__]
Cut-off Date: March 1, 2006
First Distribution Date: April 25, 2006
Initial Certificate Balance $[ ]
of this Certificate
("Denomination"):
A-1 $430,640,000
Initial Certificate Balances of all A-2a $352,800,000
Certificates of this Class: A-2b $102,230,000
A-2c $156,030,000
A-2d $100,004,000
M-1 $53,961,000
M-2 $41,181,000
M-3 $24,851,000
M-4 $22,010,000
M-5 $22,010,000
M-6 $19,880,000
B-1 $19,880,000
B-2 $15,620,000
B-3 $14,200,000
CUSIP: A-1 [617451 EB 1]
A-2a [617451 EC 9]
A-2b [617451 ED 7]
A-2c [617451 EE 5]
A-2d [617451 EF 2]
M-1 [617451 EG 0]
M-2 [617451 EH 8]
M-3 [617451 EJ 4]
M-4 [617451 EK 1]
M-5 [617451 EL 9]
M-6 [617451 EM 7]
B-1 [617451 EN 5]
B-2 [617451 EP 0]
B-3 [617451 EQ 8]
ISIN: A-1 [US617451EB16]
A-2a [US617451EC98]
A-2b [US617451ED71]
A-2c [US617451EE54]
A-2d [US617451EF20]
M-1 [US617451EG03]
M-2 [US617451EH85]
M-3 [US617451EJ42]
M-4 [US617451EK15]
M-5 [US617451EL97]
M-6 [US617451EM70]
B-1 [US617451EN53]
B-2 [US617451EP02]
B-3 [US617451EQ84]
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates, Series 2006-NC2
[Class A-][Class M-][Class B]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that _____________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital I
Inc., as depositor (the "Depositor"), NC Capital Corporation, as responsible
party, Xxxxx Fargo Bank, National Association, as servicer and Deutsche Bank
National Trust Company, as trustee (the "Trustee") To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
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.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day, immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Xxxxx Fargo Bank, National Association will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
___________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
_______________________________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________.
account number ______________, or, if mailed by check, to _____________________.
Applicable statements should be mailed to______________________________________,
____________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (i) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT 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"), OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : P-1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Percentage Interest of
this Certificate
("Denomination") : [___]%
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates, Series 2006-NC2
Class P
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that _____________________, is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital
I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association,
as servicer, NC Capital Corporation, as responsible party, and Deutsche Bank
National Trust Company, as trustee (the "Trustee") To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Trustee shall require the transferor to execute
a transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
Securities Act or is being made pursuant to the Securities Act, which Opinion of
Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
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.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Authenticated:
By:___________________________________________________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
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 on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Xxxxx Fargo Bank, National Association will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
___________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
_______________________________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________.
account number ______________, or, if mailed by check, to _____________________.
Applicable statements should be mailed to______________________________________,
____________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "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")
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (i) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT 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"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Percentage Interest of :
this Certificate
("Denomination") 100%
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates, Series 2006-NC2
Class R
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that ______________________ is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R Certificates pursuant to a Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx
Capital I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National
Association, as servicer, NC Capital Corporation, as responsible party, and
Deutsche Bank National Trust Company, as trustee (the "Trustee") To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this 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 this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this 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 this 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 this Class R
Certificate, (C) not to cause income with respect to 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 such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
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.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By: ___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Xxxxx Fargo Bank, National Association will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
___________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
_______________________________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________.
account number ______________, or, if mailed by check, to _____________________.
Applicable statements should be mailed to______________________________________,
____________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" 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 CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (i) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
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"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND
WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICER TO ANY OBLIGATION IN
ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Percentage Interest of this
Certificate ("Denomination") : [__]%
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates, Series 2006-NC2
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that ___________________________, is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
Xxxxxx Xxxxxxx Capital I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank,
National Association, as servicer, NC Capital Corporation, as responsible party,
and Deutsche Bank National Trust Company, as trustee (the "Trustee") To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Trustee shall require the transferor to execute
a transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
Securities Act or is being made pursuant to the Securities Act, which Opinion of
Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of the Trustee, the Servicer or the Trust Fund, addressed to
the Trustee, to the effect that the purchase or holding of such Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicer to any obligation in addition
to those expressly undertaken in the Agreement or to any liability.
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.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Authenticated:
By: ___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
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 on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Xxxxx Fargo Bank, National Association will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
___________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
_______________________________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________.
account number ______________, or, if mailed by check, to _____________________.
Applicable statements should be mailed to______________________________________,
____________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
1 Home Campus
Xxx Xxxxxx, Xxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of March 1,
2006, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as
Servicer, NC Capital Corporation, as Responsible
Party, and Deutsche Bank National Trust Company, as
Trustee, Xxxxxx Xxxxxxx Capital I Inc. Trust,
Series 2006-NC2
------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments)
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
1 Home Campus
Xxx Xxxxxx, Xxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of March 1,
2005, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as
Servicer, NC Capital Corporation, as Responsible
Party, and Deutsche Bank National Trust Company, as
Trustee, Xxxxxx Xxxxxxx Capital I Inc. Trust,
Series 2006-NC2
-----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Responsible Party has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable recording
office, a copy of the assignment of the Mortgage (excluding information to
be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1) solely with
respect to the Mortgage Loan number, (2) and (7) of the Mortgage Loan Schedule
and items (1), (9) and (17) of the Data Tape Information accurately reflects
information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2,
Mortgage Pass-Through Certificates,
Series 2006-NC2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Xxxxxx
Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank, National Association, as
Servicer (the "Servicer"), NC Capital Corporation, as Responsible Party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as Trustee (the
"Trustee") Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
8. The Transferee's taxpayer identification number is
__________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30)
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Residual
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 any other U.S. Person.
12. Check the applicable paragraph:
(i) The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does
not exceed the sum of:
(ii) the present value of any consideration given to the Transferee
to acquire such Certificate;
(iii) the present value of the expected future distributions on such
Certificate; and
(iv) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) 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 short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
(i) The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(ii) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from the Certificate will only be taxed in the United States;
(iii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iv) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(v) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
(vi) None of the above.
5. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or a plan that is subject to Section 4975 of the Code or a plan
subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of ______________ , 20__.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
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 Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________ , 20____.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2
Mortgage Pass-Through Certificates, Series 2006-NC2, Class [ ]
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates 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, (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 which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_______________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2,
Mortgage
Pass-Through Certificates, Series 2006-NC2, Class [___]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above 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 Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class X-0, Xxxxx X-0x,
Xxxxx X-0x, Class A-2c, Class A-2d, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3 Certificate or we are
not an employee benefit plan that is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan or
arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, or a plan subject to materially similar provisions of
applicable federal, state or local law, nor are we acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such acquisition or, with respect to a Class X Certificate, the purchaser
is an insurance company that is purchasing this certificate with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) 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 (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the 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 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.
In connection with our purchase of the Certificates, we acknowledge
and agree that (i) none of you nor any of your affiliates is acting as a
fiduciary or financial or investment adviser for us; (ii) we are not relying
(for purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of any of you or your
affiliates with respect to the Certificates; (iii) none of you nor any of your
affiliates has given to us (directly or indirectly through any other person) any
assurance, guarantee or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2006-NC2 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2006-NC2 and the other material transaction documents related
thereto.
ANNEX 1 TO EXHIBIT I
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 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 $____________(1) 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 the 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 any such institutions 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.
--------
(1) 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.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ 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 a 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 within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ 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.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (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.
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 is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
Date:__________________________________
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL 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.
1. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC 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).
2. 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).
3. 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.
4. 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.
5. 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.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:__________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: [Trustee]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Delivery Method (check one)
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to its
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to Collection Account as provided
in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to its
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain)
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SERVICER]
By:____________________________________
Name:
Title:
Date:
[ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:____________________________________
Name:
Title:
Date: ]
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Sponsor and which shall be retained by the Servicer or delivered to and retained
by the Trustee, as applicable:
(i) The original Mortgage Note bearing all intervening
endorsements, showing a complete chain of endorsement from the originator
to the last endorsee endorsed "Pay to the order of _________________
without recourse" and signed (which may be by facsimile signature) in the
name of the last endorsee by an authorized officer. To the extent that
there is no room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, unless the Trustee is advised
in writing by the Responsible Party that state law does not so allow.
(ii) The original of any guaranty executed in connection with the
Mortgage Note.
(iii) The original Mortgage, with evidence of recording thereon
or a certified true copy of such Mortgage submitted for recording. If in
connection with any Mortgage Loan, the Responsible Party cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Responsible
Party shall deliver or cause to be delivered to the Trustee, a photocopy
of such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Responsible Party
or evidence of certification on the face of such photocopy of such
Mortgage or a certificate from an escrow company, a title company or
closing attorney stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Trustee upon receipt thereof by
the Responsible Party; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage.
(iv) The originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon or a certified
true copy of such agreement submitted for recording.
(v) The original Assignment of Mortgage for each Mortgage Loan
endorsed in blank.
(vi) Originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon or a
certified true copy of such intervening assignments of mortgage submitted
for recording, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Responsible Party shall deliver or cause to be delivered to the
Trustee, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Responsible Party or evidence of certification on the
face of such photocopy of such intervening assignment or a certificate
from an escrow company, a title company or a closing attorney stating that
such intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Trustee upon
receipt thereof by the Responsible Party; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment.
(vii) The original mortgagee title insurance policy or attorney's
opinion of title and abstract of title.
(viii) The original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage (if
provided)
(ix) Residential loan application.
(x) Mortgage Loan closing statement.
(xi) Verification of employment and income, if applicable.
(xii) Verification of acceptable evidence of source and amount of
down payment.
(xiii) Credit report on Mortgagor.
(xiv) Residential appraisal report.
(xv) Photograph of the Mortgaged Property.
(xvi) Survey of the Mortgaged Property.
(xvii) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule in the
title policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
(xviii) All required disclosure statements.
(xix) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xx) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2006-NC2, issued
pursuant to the Pooling and Servicing Agreement, dated as
of March 1, 2006, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as
servicer (the "Servicer"), Deutsche Bank National Trust
Company, as trustee (the "Trustee"), and NC Capital
Corporation, as responsible party
-----------------------------------------------------------
I, [identify the certifying individual], certify that:
(1) I have reviewed this annual report on Form 10-K ("Annual
Report"), and all reports on Form 10-D (collectively with this Annual
Report, the "Reports") required to be filed in respect of period covered
by this Annual Report, of the Trust;
(2) Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this Annual 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 Annual Report is included in the Reports;
(4) Based on my knowledge and the compliance statements required in
this Annual Report under Item 1123 of Regulation AB, and except as
disclosed in the Reports, the Servicer have fulfilled their obligations
under the Pooling and Servicing Agreement; and
(5) All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation reports
on assessment of compliance with servicing criteria required to be
included in this Annual 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 Annual Report, except as otherwise disclosed in this
Annual Report. Any material instances of non-compliance described in such
reports have been disclosed in this Annual Report.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and the
Servicer.
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION
TO BE PROVIDED BY THE TRUSTEE TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2006-NC2, issued
pursuant to the Pooling and Servicing Agreement, dated as
of March 1, 2006, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as
servicer (the "Servicer"), Deutsche Bank National Trust
Company, as trustee (the "Trustee"), and NC Capital
Corporation, as responsible party
-----------------------------------------------------------
The Trustee hereby certifies to the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 10-D required to
be filed in respect of period covered by the Annual Report (collectively
with the Annual Report, the "Reports"), of the Trust;
(2) To my knowledge, the Reports, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by the Annual Report, it being understood that the Trustee is not
responsible for verifying the accuracy or completeness of information in
the Reports (a) provided by Persons other than the Trustee or any
Subcontractor utilized by the Trustee or (b) relating to Persons other
than the Trustee or any Subcontractor utilized by the Trustee as to which
a Responsible Officer of the Trustee does not have actual knowledge;
(3) To my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under the Pooling
and Servicing Agreement for inclusion in the Reports is included in the
Reports; and
(4) The report on assessment of compliance with servicing criteria
for asset-backed securities applicable to the Trustee and each
Subcontractor utilized by the Trustee and their related attestation
reports on assessment of compliance with servicing criteria applicable to
it required to be included in the Annual Report in accordance with Item
1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been
included as an exhibit to the Annual Report. Any material instances of
non-compliance are described in such report and have been disclosed in the
Annual Report.
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION
TO BE PROVIDED BY THE SERVICER TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2006-NC2, issued
pursuant to the Pooling and Servicing Agreement, dated as
of March 1, 2006, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as
servicer (the "Company"), Deutsche Bank National Trust
Company, as trustee (the "Trustee"), and NC Capital
Corporation, as responsible party
The Company, 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) The Company has reviewed the servicer compliance statement of
the Company and the compliance statements of each Subservicer, if any,
engaged by the Company provided to the Depositor and the Trustee for the
Trust's fiscal year [___] in accordance with Item 1123 of Regulation AB
(each a "Compliance Statement"), the report on assessment of the Company
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
Company and of each Subservicer or Subcontractor, if any, engaged or
utilized by the Company provided to the Depositor and the Trustee for the
Trust'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 Company
during 200[_] that were delivered or caused to be delivered by the Company
pursuant to the Agreement (collectively, the "Servicing Information");
(2) Based on the Company's knowledge, 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 the Company's knowledge, the servicing information
required to be provided to the Trustee by the Company pursuant to the
Pooling and Servicing Agreement has been provided to the Trustee;
(4) Based on the Company's knowledge and the compliance review
conducted in preparing Compliance Statement of the Company and, if
applicable, reviewing each Compliance Statement of each Subservicer, if
any, engaged by the Company, 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.
(5) Each Servicing Assessment of the Company and of each Subservicer
or Subcontractor, if any, engaged or utilized by the Company 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:_________________________
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT O
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
Xxxxx Fargo Bank, National Association
1 Home Campus
Xxx Xxxxxx, Xxxx 00000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States and having its principal place of business at 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx, 00000, as Trustee pursuant to that Xxxxxx Xxxxxxx Capital
I Inc. Trust 2006-NC2 Pooling and Servicing Agreement dated as of March 1, 2006
(the "Agreement") by and among Xxxxxx Xxxxxxx Capital I Inc., as depositor (the
"Depositor"), Xxxxx Fargo Bank, National Association, as Servicer (the
"Servicer"), NC Capital Corporation, as a responsible party ("NC Capital") and
Deutsche Bank National Trust Company, as trustee (the "Trustee"), hereby
constitutes and appoints Xxxxx Fargo, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Agreement solely for the purpose of
performing such acts and executing such documents in the name of the Trustee
necessary and appropriate to effectuate the following enumerated transactions in
respect of any of the mortgages or deeds of trust (the "Mortgages" and the
"Deeds of Trust" respectively) and promissory notes secured thereby (the
"Mortgage Notes") for which the undersigned is acting as Trustee for various
certificateholders (whether the undersigned is named therein as mortgagee or
beneficiary or has become mortgagee by virtue of endorsement of the Mortgage
Note secured by any such Mortgage or Deed of Trust) and for which Xxxxx Fargo is
acting as servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose
of correcting the Mortgage or Deed of Trust to conform same to
the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued; provided
that (i) said modification or re-recording, in either instance,
does not adversely affect the lien of the Mortgage or Deed of
Trust as insured and (ii) otherwise conforms to the provisions of
the Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution or requests to trustees to
accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
The undersigned gives said Attorney-in-fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-fact shall be effective as of
March 30, 2006.
This appointment is to be construed and interpreted as a limited power of
attorney. The enumeration of specific items, rights, acts or powers herein is
not intended to, nor does it give rise to, and it is not to be construed as a
general power of attorney.
Nothing contained herein shall (i) limit in any manner any indemnification
provided by the Servicer to the Trustee under the Agreement, or (ii) be
construed to grant the Servicer the power to initiate or defend any suit,
litigation or proceeding in the name of Deutsche Bank National Trust Company
except as specifically provided for herein. If the Servicer receives any notice
of suit, litigation or proceeding in the name of Deutsche Bank National Trust
Company, then the Servicer shall promptly forward a copy of same to the Trustee.
This limited power of attorney is not intended to extend the powers granted to
the Servicer under the Agreement or to allow the Servicer to take any action
with respect to Mortgages, Deeds of Trust or Mortgage Notes not authorized by
the Agreement.
The Servicer hereby agrees to indemnify and hold the Trustee and its directors,
officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by the Servicer of the
powers granted to it hereunder. The foregoing indemnity shall survive the
termination of this Limited Power of Attorney and the Agreement or the earlier
resignation or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed by the laws
of the State of New York, without regard to conflicts of law principles of such
state.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee has caused
its corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by a duly elected and authorized signatory
this ___________ day of ____________.
Deutsche Bank National Trust Company, as Trustee
By:______________________________________
Name:
Title:
Acknowledged and Agreed
Xxxxx Fargo Bank, National Association
By:____________________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of Deutsche Bank National Trust Company, as
Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 personally known to me
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
__________________________________
Notary Public, State of California
Xxxxx Fargo Bank, National Association
1 Home Campus
Xxx Xxxxxx, Xxxx 00000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, and having its principal place of business at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, as Trustee pursuant to that Xxxxxx Xxxxxxx
Capital I Inc. Trust 2006-NC2 Pooling and Servicing Agreement, dated as of March
1, 2006, among Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as servicer (the "Servicer"), NC Capital Corporation, as a
responsible party ("NC Capital"), and Deutsche Bank National Trust Company, as
Trustee, hereby constitutes and appoints the Servicer, by and through the
Servicer officers, the Trustee's true and lawful Attorney-in-fact, in the
Trustee's name, place and stead and for the Trustee's benefit, in connection
with all mortgage loans serviced by the Servicer pursuant to the Agreement
solely for the purpose of performing such acts and executing such documents in
the name of the Trustee necessary and appropriate to effectuate the following
enumerated transactions in respect of any of the mortgages or deeds of trust
(the "Mortgages" and the "Deeds of Trust" respectively) and promissory notes
secured thereby (the "Mortgage Notes") for which the undersigned is acting as
Trustee for various certificateholders (whether the undersigned is named therein
as mortgagee or beneficiary or has become mortgagee by virtue of endorsement of
the Mortgage Note secured by any such Mortgage or Deed of Trust) and for which
the Servicer is acting as servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose
of correcting the Mortgage or Deed of Trust to conform same to
the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued; provided
that (i) said modification or re-recording, in either instance,
does not adversely affect the lien of the Mortgage or Deed of
Trust as insured and (ii) otherwise conforms to the provisions of
the Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution or requests to trustees to
accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
The undersigned gives said Attorney-in-fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-fact shall
be effective as of March 30, 2006.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by the Servicer to the Trustee under the Agreement, or
(ii) be construed to grant the Servicer the power to initiate or defend any
suit, litigation or proceeding in the name of Deutsche Bank National Trust
Company except as specifically provided for herein. If the Servicer receives any
notice of suit, litigation or proceeding in the name of Deutsche Bank National
Trust Company or Bankers Trust Company of California, N.A., then the Servicer
shall promptly forward a copy of same to the Trustee.
This limited power of attorney is not intended to extend the powers
granted to Xxxxx Fargo under the Agreement or to allow Xxxxx Fargo to take any
action with respect to Mortgages, Deeds of Trust or Mortgage Notes not
authorized by the Agreement.
Xxxxx Fargo hereby agrees to indemnify and hold the Trustee and its
directors, officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by Xxxxx Fargo of the
powers granted to it hereunder. The foregoing indemnity shall survive the
termination of this Limited Power of Attorney and the Agreement or the earlier
resignation or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee
has caused its corporate seal to be hereto affixed and these presents to be
signed and acknowledged in its name and behalf by a duly elected and authorized
signatory this ___________ day of ____________.
Deutsche Bank National Trust Company, as Trustee
By:______________________________________
Name:
Title:
Acknowledged and Agreed
Xxxxx Fargo Bank, National Association
By:________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of Deutsche Bank National Trust Company, as
Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2, personally known to me
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
____________________________________
Notary Public, State of California
EXHIBIT P
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Servicer]
and [each Subservicer] shall address, at a minimum, the criteria identified as
below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------------------------------------------------
Reference Criteria
------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements. Trustee/Servicer
------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities. Trustee/Servicer
------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a N/A
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction Servicer
1122(d)(1)(iv) agreements.
------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements. Servicer
------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to Servicer/Trustee
1122(d)(2)(ii) an investor are made only by authorized personnel.
------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements. Servicer
------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with Servicer/Trustee
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule Servicer/Trustee
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
------------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent unauthorized Servicer/Trustee
1122(d)(2)(vi) access.
------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of Servicer/Trustee
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid Servicer/Trustee
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii) the transaction agreements. Servicer/Trustee
------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of Servicer/Trustee
1122(d)(3)(iii) days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank Servicer/Trustee
1122(d)(3)(iv) statements.
------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required Servicer/Trustee
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required by Trustee
1122(d)(4)(ii) the transaction agreements
------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements. Trustee/Servicer
------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage Servicer
1122(d)(4)(iv) loan documents.
------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance. Servicer
------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents. Servicer
------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements Servicer
1122(d)(4)(vii) established by the transaction agreements.
------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency Servicer
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage loans
with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix) documents. Servicer
------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar Servicer
days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x) number of days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such Servicer
1122(d)(4)(xi) other number of days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission. Servicer
------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction Servicer
1122(d)(4)(xiii) agreements.
------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements. Servicer
------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained Trustee
1122(d)(4)(xv) as set forth in the transaction agreements.
------------------------------------------------------------------------------------------------------------------
EXHIBIT Q
ADDITIONAL FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
--------------------------------------------------------------------------------
Item 1: Distribution and Pool Servicer/Trustee
Performance Information
Any information required by Item
1121 of Regulation AB which is
NOT included on the Monthly
Statement
--------------------------------------------------------------------------------
Item 2: Legal Proceedings (i) All parties to the Agreement (as
to themselves), (ii) the Trustee and
Servicer as to the issuing entity,
(iii) the Depositor as to the sponsor,
per Item 1117 of Regulation AB and each Originator (other than a
Responsible Party) or any Regulation
AB Item 1100(d)(1) party
--------------------------------------------------------------------------------
Item 3: Sale of Securities and Use Depositor
of Proceeds
--------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Trustee
Securities
--------------------------------------------------------------------------------
Item 5: Submission of Matters to a Depositor or the party to this
Vote of Security Holders Agreement submitting such matter to a
vote of Certificateholders
--------------------------------------------------------------------------------
Item 6: Significant Obligors of N/A
Pool Assets
--------------------------------------------------------------------------------
Item 7: Significant Enhancement Depositor
Provider Information
--------------------------------------------------------------------------------
Item 8: Other Information Any party to the Agreement responsible
for disclosure items on Form 8-K
--------------------------------------------------------------------------------
Item 9: Exhibits Trustee
--------------------------------------------------------------------------------
EXHIBIT R
ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
--------------------------------------------------------------------------------
Item 1B: Unresolved Staff Depositor
Comments
--------------------------------------------------------------------------------
Item 9B: Other Information Any party to the Agreement responsible
for disclosure items on Form 8-K
--------------------------------------------------------------------------------
Item 15: Exhibits, Financial Trustee
Statement Schedules Depositor
--------------------------------------------------------------------------------
Additional Item: (i) All parties to the Agreement (as to
themselves), (ii) the Trustee and
Servicer as to the Trust, (iii) the
Depositor as to the sponsor and each
Disclosure per Item 1117 of Originator (other than a Responsible
Regulation AB Party), or any 1100(d)(1) party
--------------------------------------------------------------------------------
Additional Item: (i) All parties to the Agreement as to
Disclosure per Item 1119 of themselves, (ii) the Depositor as to the
Regulation AB sponsor, or any derivative provider
--------------------------------------------------------------------------------
Additional Item: N/A
Disclosure per Item 1112(b) of
Regulation AB
--------------------------------------------------------------------------------
Additional Item: Depositor
Disclosure per Items 1114(b) and
1115(b) of Regulation AB
--------------------------------------------------------------------------------
EXHIBIT S
FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
--------------------------------------------------------------------------------
Item 1.01- Entry into a Material The party to this Agreement
Definitive Agreement entering into such material
definitive agreement
--------------------------------------------------------------------------------
Item 1.02- Termination of a Material The party to this Agreement
Definitive Agreement requesting termination of a
material definitive agreement
--------------------------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership (i) All parties to the Agreement
(as to themselves), (ii) the
Trustee and Servicer as to the
Trust, (iii) the Depositor as to
the sponsor and each Originator
(other than a Responsible Party),
or any 1100(d)(1) party
--------------------------------------------------------------------------------
Item 2.04- Triggering Events that Depositor/Trustee
Accelerate or Increase a Direct
Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement
--------------------------------------------------------------------------------
Item 3.03- Material Modification to The party requesting such Rights of
Security Holders modification.
--------------------------------------------------------------------------------
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
--------------------------------------------------------------------------------
Item 6.01- Informational and Depositor
Computational Material
--------------------------------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Servicer, Trustee
--------------------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement Depositor/Trustee
or External Support
--------------------------------------------------------------------------------
Item 6.04- Failure to Make a Required Trustee
Distribution
--------------------------------------------------------------------------------
Item 6.05- Securities Act Updating Depositor
Disclosure
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Item 7.01- Regulation FD Disclosure Depositor
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Item 8.01 Depositor
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Item 9.01 Depositor
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EXHIBIT T
INTEREST RATE SWAP AGREEMENT
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of March 30, 2006
between
XXXXXX XXXXXXX CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
a national banking association, not individually,
but solely as Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 (the
"Trust"),
Mortgage Pass-Through Certificates, Series 2006-NC2
("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) "Specified Transaction" is not applicable to Party A or Party B for
any purpose, and, accordingly, Section 5(a)(v) shall not apply to
Party A or Party B.
(c) "Cross Default" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(d) "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provisions of Section 6(a) will
not apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. "Market Quotation" and "Second
Method" will apply for the purpose of Section 6(e) of this
Agreement.
(g) "Termination Currency" means United States Dollars.
(h) Additional Termination Event will apply. The following Additional
Termination Events will apply, in each case with respect to Party B
as the sole Affected Party (unless otherwise provided below):
(i) Upon any amendment, supplement, modification or waiver of any
provision of the PSA (as defined below) without the consent of
Party A that materially and adversely affects the rights or
interests of Party A.
(ii) Party A fails to comply with the Rating Agency Downgrade
provisions as set forth in Part 5(f) below. For all purposes
of this Agreement, Party A shall be the sole Affected Party
with respect to the occurrence of a Termination Event
described in this Part 1(h)(ii).
(iii) The Servicer exercises its option to purchase the Mortgage
Loans pursuant to Section 9.01 of the PSA.
(iv) Upon the irrevocable direction to dissolve or otherwise
terminate the Trust following which all assets of the Trust
will be liquidated and the proceeds of such liquidation
distributed to the Certificateholders.
(i) "Breach of Agreement" provision of Section 5(a)(ii) will not apply
to Party A or Party B.
(j) "Credit Support Default" provisions of Section 5(a)(iii) will not
apply to Party B.
(k) "Misrepresentation" provisions of Section 5(a)(iv) will not apply to
Party A or Party B.
(l) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will not apply to Party B.
(m) Failure to Pay or Deliver. Section 5(a)(i) is hereby amended by
deleting the word "third" in the third line thereof and replacing it
with the word "second".
(n) Bankruptcy. Section 5(a)(vii) shall apply to Party A and to Party B;
provided, however, with respect to Party B, Section 5(a)(vii)(2)
shall not apply.
Part 2. Tax Representations.
(a) Party A and Party B Payer Tax Representations. For the purpose of
Section 3(e), each of Party A and Party B makes the following
representation:
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 representation made by the other party
pursuant to Section 3(f); (ii) the satisfaction of the agreement of
the other party 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 to its legal or commercial position.
(b) Party A and Party B Payee Tax Representations.
(i) For the purpose of Section 3(f), Party A makes the following
representation:
(1) It is a U.S. corporation organized under the laws of the
State of Delaware.
(ii) For the purpose of Section 3(f), Party B makes the following
representations:
Party B is the Trust for which Deutsche Bank National Trust
Company as trustee is signing. The Trust is duly formed under
the laws of the State of New York and is not a foreign
corporation for United States tax purposes.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
(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 B Any document required or Promptly after the earlier of
reasonably requested to (i) reasonable demand by Party A
allow Party A to make or (ii) learning that such form
payments under this or document is required.
Agreement without any
deduction or withholding
for or on the account of
any Tax or with such
deduction or withholding at
a reduced rate.
(b) Other documents to be delivered are:-
Covered by
Party required to Section 3(d)
deliver document Form/Document/Certificate Date by which to be delivered Representation
------------------- ------------------------------------------- ------------------------------- ------------------
Party A Either (1) a signature booklet The earlier of the fifth Yes
and containing secretary's certificate and Business Day after the Trade
Party B resolutions ("authorizing resolutions") Date of the first
authorizing the party to enter into Transaction or upon
derivatives transactions of the type execution of this Agreement
contemplated by the parties or (2) a and as deemed necessary for
secretary's certificate, authorizing any further documentation.
resolutions and incumbency certificate,
in either case, for such party and any
Credit Support Provider of such party
reasonably satisfactory in form and
substance to the other party.
Party B An executed copy of the Pooling and Upon execution of this Yes
Servicing Agreement ("PSA"), dated as Agreement.
of March 1, 2006, among Xxxxxx Xxxxxxx
Capital I Inc., Xxxxx Fargo Bank,
National Association, Deutsche Bank
National Trust Company and NC Capital
Corporation.
Party A A duly executed copy of the Credit As soon as practicable after No
and Support Document specified in Part 4 of the execution of this
Party B this Schedule. Agreement.
Party A and An opinion of counsel reasonably As soon as practicable after No
Party B satisfactory in form and substance to the execution of this
the other party. Agreement.
Party B Taxpayer Identification Number of Party Upon execution of this Yes
B as required by Part I of United Agreement
States Internal Revenue Service Form W-9
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
(i) Address for notices or communications to Party A:-
XXXXXX XXXXXXX CAPITAL SERVICES INC.
Transaction Management Group
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: CHIEF LEGAL OFFICER
Fax No: 000 000 000 0000
(ii) Address for notices or communications to Party B:
DEUTSCHE BANK NATIONAL TRUST COMPANY
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Trust Administration - MS06C2
Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000
(b) Notices. Section 12(a) is amended by adding in the third line
thereof after the phrase "messaging system" and before the ")" the
words, "; provided, however, any such notice or other communication
may be given by facsimile transmission if telex is unavailable, no
telex number is supplied to the party providing notice, or if answer
back confirmation is not received from the party to whom the telex
is sent."
(c) Process Agent. For the purpose of Section 13(c):
Party A does not appoint a Process Agent.
Party B does not appoint a Process Agent.
(d) Offices. The provisions of Section 10(a) will not apply to Party A
and to Party B.
(e) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) "Calculation Agent" means Party A.
(g) "Credit Support Document" means any Confirmation and any other
document any of which by its terms secures, guarantees or otherwise
supports either or both parties' obligations under this Agreement,
including, but not limited to, the ISDA Credit Support Annex
attached hereto as Exhibit A and dated as of the date hereof (the
provisions of which are incorporated by reference herein) and the
guarantee of Xxxxxx Xxxxxxx.
(h) Credit Support Provider means in relation to Party A: Xxxxxx
Xxxxxxx, a Delaware corporation.
Credit Support Provider means in relation to Party B: None
(i) Governing Law; Jurisdiction. This Agreement, each Credit Support
Document and each Confirmation will be governed by and construed in
accordance with the laws of the State of New York without regard to
conflict of law provisions thereof other than New York General
Obligations Law Sections 5-1401 and 5-1402. Section 13(b) is amended
by: (1) deleting "non-" from the second line of clause (i); and (2)
deleting the final paragraph.
(j) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any
Credit Support Document.
(k) Netting of Payments. Clause (ii) of Section 2(c) will apply to any
amounts payable with respect to Transactions from the date of this
Agreement.
(l) "Affiliate". Party A and Party B shall be deemed not to have any
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii). For the avoidance of doubt, with respect to Party
A, such definition shall be understood to exclude Xxxxxx Xxxxxxx
Derivative Products Inc.
(m) Additional Definitions. All capitalized terms used but not otherwise
defined in this Agreement shall have the meanings given thereto in
the PSA.
Part 5. Other Provisions
(a) Representations.
(i) The introductory clause of Section 3 of this Agreement is
hereby amended to read in its entirety as follows:
"Each party represents to the other party (which
representations will be deemed to be repeated by each party on
each date on which a Transaction is entered into and, in the
case of the representations in Section 3(f) and Section
3(g)(4), at all times until the termination of this Agreement)
that:--"
(ii) Section 3 of this Agreement is hereby amended by adding at the
end thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding a
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) Non-Reliance. In the case of Party A, it is
acting for its own account, and in the case of Party B,
it is acting as Trustee. It has made its own independent
decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such
advisers as it has deemed necessary and, with respect to
Party B, as directed under the PSA. It is not relying on
any communication (written or oral) of the other party
as investment advice or as a recommendation to enter
into that Transaction; it being understood that
information and explanations related to the terms and
conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that
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 that
Transaction.
(ii) Assessment and Understanding. It is capable
of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.
(iii) Status of Parties. The other party is not
acting as a fiduciary for or an adviser to it in respect
of that Transaction.
(3) Purpose. It is an "eligible swap participant" as
such term is defined in Section 35.1(b)(2) of the
regulations (17 C.F.R 35) promulgated under, and an
"eligible contract participant" as defined in Section
1a(12) of, the Commodity Exchange Act, as amended, and
it is entering into the Transaction for the purposes of
managing its borrowings or investments, hedging its
underlying assets or liabilities or in connection with a
line of business.
(4) ERISA Representation. It is not (i) an employee
benefit plan (hereinafter an "ERISA Plan"), as defined
in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), subject to
Title I of ERISA or a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, or
subject to any other statute, regulation, procedure or
restriction that is materially similar to Section 406 of
ERISA or Section 4975 of the Code (together with ERISA
Plans, "Plans"), (ii) a person acting on behalf of a
Plan or (iii) a person any of the assets of whom
constitute assets of a Plan. It will provide notice to
the other party in the event that it is aware that it is
in breach of any aspect of this representation or is
aware that with the passing of time, giving of notice or
expiry of any applicable grace period it will breach
this representation."
(b) Set off. Subject to Section 2(c), notwithstanding any other
provision of this Agreement or any other existing or future
agreement, each party irrevocably waives any and all rights it
may have to set off, net, recoup or otherwise withhold, suspend
or condition payment or performance of any obligation between it
and the other party hereunder against any obligation between it
and the other party under any other agreements. The provisions
for set off set forth in Section 6(e) of this Agreement shall not
apply.
(c) Confirmations. Party A will deliver to Party B a Confirmation
relating to each Transaction.
(d) Form of Agreement. The parties hereby agree that the text of the
body of this Agreement is intended to be the printed form of 1992
ISDA Master Agreement (Multicurrency--Cross Border) as published and
copyrighted by the International Swaps and Derivatives Association,
Inc.
(e) Transfer, Amendment and Assignment. No transfer, amendment,
waiver, supplement, assignment or other modification of this
Agreement shall be permitted by either party unless each of
Standard & Poor's Ratings Service, a division of The McGraw Hill
Companies, Inc. ("S&P"), Xxxxx'x Investors Service, Inc.
("Moody's") and Fitch, Inc. ("Fitch", and together with S&P and
Xxxxx'x, the "Rating Agencies") has been provided notice of the
same and confirms in writing (including by facsimile
transmission) within five Business Days after such notice is
given that it will not downgrade, qualify, withdraw or otherwise
modify its then current rating of the Xxxxxx Xxxxxxx Capital I
Inc. Trust 2006-NC2, Mortgage Pass-Through Certificates, Series
2006-NC2.
(f) Rating Agency Downgrade. (i) In the event that any of the
Rating Agencies downgrades Xxxxxx Xxxxxxx or a replacement
counterparty, or an entity that guarantees the obligations of
Party A or a replacement counterparty, below the Required Swap
Counterparty Rating (as defined below) or Moody's or Fitch
withdraws its ratings of Xxxxxx Xxxxxxx or a replacement
counterparty, or an entity that guarantees the obligations of
Party A or a replacement counterparty, then, within 30 days after
such rating downgrade or withdrawal, Party A or such replacement
counterparty, as the case may be, shall, subject to the Rating
Agency Condition (as defined below), at its own expense, either
(1) cause another entity to replace Party A as party to this
Agreement that meets or exceeds the Required Swap Counterparty
Rating on terms substantially similar to this Agreement, (2)
obtain a guaranty of, or a contingent agreement of another person
with the Required Swap Counterparty Rating to honor Party A's
obligations under this Agreement, (3) collateralize its exposure
to the Trust pursuant to the ISDA Credit Support Annex attached
hereto as Exhibit A, subject to the satisfaction of the Rating
Agency Condition or (4) take other steps, if any, to enable the
Trust to satisfy the Rating Agency Condition; provided that for
purposes of this Part 5(f), Party A shall be responsible for (A)
posting collateral in accordance with such ISDA Credit Support
Annex at its own cost and (B) any cost incurred by it in
complying with its obligations.
"Required Swap Counterparty Rating" means, with respect to a
counterparty or entity guaranteeing the obligations of such
counterparty, (x) either (i) if such counterparty or entity has only
a long-term rating by Moody's, a long-term senior, unsecured debt
obligation rating, credit rating or other similar rating (as the
case may be, the "Long-Term Rating") of at least "Aa3" by Moody's
and if rated "Aa3" by Xxxxx'x is not on negative credit watch by
Moody's or (ii) if such counterparty or entity has a Long-Term
Rating and a short-term rating by Moody's, a Long-Term Rating of at
least "A1" by Moody's and a short-term rating of "P-1" by Moody's
and, in each case, such rating is not on negative credit watch by
Moody's, (y) (i) a short-term rating of at least "A-1" by S&P or
(ii) if such counterparty or entity does not have a short-term
rating by S&P, a Long-Term Rating of at least "A+" by S&P and (z)
(i) short-term rating of at least "F1" by Fitch or (ii) if such
counterparty or entity does not have a short-term rating by Fitch, a
Long-Term Rating of at least "A+" by Fitch.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder that the party acting or
failing to act must consult with each of the Rating Agencies then
providing a rating of the Certificates and receive from each Rating
Agency a prior written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of the then
current rating of the Certificates.
(ii) In the event that Xxxxxx Xxxxxxx or a replacement counterparty,
or an entity that guarantees the obligations of Party A or a
replacement counterparty, has its rating by S&P withdrawn, has a
rating of less than "BBB-" or "A-3", if applicable, by S&P, a rating
of less than "BBB-" or "F3", if applicable, by Fitch or a rating
less than or equal to "A3" or "P-2," if applicable, by Moody's,
Party A or such replacement counterparty, as the case may be, shall,
within 10 days thereafter, while collateralizing its exposure to the
Trust pursuant to the ISDA Credit Support Annex attached hereto as
Exhibit A, (1) transfer this Agreement at its sole cost and expense,
in whole, but not in part, to a counterparty that satisfies the
Required Swap Counterparty Rating, subject to satisfaction of the
Rating Agency Condition or (2) obtain a guaranty of, or a contingent
agreement of, another person with the Required Swap Counterparty
Rating to honor Party A's obligations under this Agreement, subject
to satisfaction of the Rating Agency Condition.
(iii) Failure to act in accordance with this Part 5(f) shall
constitute an Additional Termination Event but shall not constitute
an Event of Default under Section 5(a)(ii) (Breach of Agreement).
(g) 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; provided, however, that nothing
in this provision shall adversely affect the rights of each party
under this Agreement; and provided further that this severability
provision shall not be applicable if any provision of Section 1,
2, 5, 6, or 13 (or any definition or provision in Section 14 to
the extent it relates to, or is used in or connection with any
such Section) shall be so held to be invalid or unenforceable.
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.
(h) Consent to Recording. Each party hereto consents to the monitoring
or recording, at any time and from time to time, by the other party
of any and all communications between trading and marketing
personnel of the parties, waives any further notice of such
monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(i) Proceedings. Party A shall not institute against or cause any
other person to institute against, or join any other person in
instituting against, the Trust or Deutsche Bank National Trust
Company, not individually, but solely as Trustee, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state
bankruptcy or similar law for a period of one year and one day
(or, if longer, the applicable preference period) following
payment in full of the Certificates; provided, however, that this
shall not restrict or prohibit Party A from joining in any
bankruptcy, reorganization, arrangement, insolvency, moratorium
or liquidation proceedings or other analogous proceedings under
applicable laws.
(j) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Agreement is executed by
Deutsche Bank National Trust Company (i) this Agreement is
executed and delivered by Deutsche Bank National Trust Company
not in its individual capacity but solely as Trustee under the
PSA in the exercise of the powers and authority conferred and
invested in it as trustee thereunder, (ii) each of the
representations, undertakings and agreements herein made on
behalf of the Trust is made and intended not as personal
representations of the Trustee but is made and intended for the
purpose of binding only the Trust, and (iii) under no
circumstances shall Deutsche Bank National Trust Company 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.
IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized officers as of the date hereof:
XXXXXX XXXXXXX CAPITAL SERVICES INC. DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as
Trustee for Xxxxxx Xxxxxxx Capital
I Inc. Trust 2006-NC2, Mortgage
Pass-Through Certificates, Series
2006-NC2
By: /s/ Xxxxxxxxx Xxxxxx By: /s/: Xxxx Xxxxxxx
Name: Xxxxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Vice President Title: Associate
EXHIBIT A
Credit Support Annex
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of March 30, 2006
XXXXXX XXXXXXX CAPITAL SERVICES INC. and DEUTSCHE BANK NATIONAL TRUST
COMPANY, not individually,
but solely as Trustee for Xxxxxx
Xxxxxxx Capital I Inc.
Trust 2006-NC2,
Mortgage Pass-Through Certificates,
Series 2006-NC2
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
Part 1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
Part 2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
Each obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with
respect to the other party has occurred and is continuing, (2) the condition
precedent that no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.
(a) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(b) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(c) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) 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 (II) a Change in Tax
Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(d) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
o-f the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
2. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in lull
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
3. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or an Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
4. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (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) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
5. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
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.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-Defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's Loss
in respect of this Agreement. If that amount is a positive number,
the Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate
and permitted by law to reflect any payments or deliveries made by
one party to the other under this Agreement (and retained by such
other party) during the period from the relevant Early Termination
Date to the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount is
payable for the loss of bargain and the loss of protection against
future risks and except as otherwise provided in this Agreement
neither party will be entitled to recover any additional damages as
a consequence of such losses.
6. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
7. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
8. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire Agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
9. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
10. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
11. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
12. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
13. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the ease of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except so as to avoid duplication, if Section 6(e)(i)(l) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with a respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent 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 Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated 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. The Replacement Transaction would
be subject to such determination as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) its relation to any payment, from or through which such
payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either ease) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each ease
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
(Multicurrency -- Cross Border)
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
XXXXXX XXXXXXX CAPITAL SERVICES INC. Deutsche Bank National Trust Company,
not individually, but solely as Trustee
for Xxxxxx Xxxxxxx Capital I Inc.
Trust 2006-NC2, Mortgage Pass-Through
Certificates, Series 2006-NC2
By: /s/ Xxxxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
----------------------- -----------------------
Name: Xxxxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Vice President Title: Associate
[XXXXXX XXXXXXX LOGO]
--------------------------------------------------------------------------------
DATE: March 30, 2006
TO: Deutsche Bank National Trust Company, not individually, but
solely as Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust
2006-NC2, Mortgage Pass-Through Certificates, Series
2006-NC2
ATTENTION: Trust Administration - MS06C2
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
FROM: Derivatives Documentation
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: FRQXU
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between Xxxxxx Xxxxxxx Capital Services Inc.
("Party A") and Deutsche Bank National Trust Company, not individually, but
solely as Trustee ("Party B") under the Pooling and Servicing Agreement, dated
and effective as of March 1, 2006, among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as Servicer, Deutsche Bank
National Trust Company, as Trustee, and NC Capital Corporation, as Responsible
Party (the "PSA") for the Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2, Mortgage
Pass-Through Certificates, Series 2006-NC2.
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of March 30, 2006, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:................................... With respect to any Calculation Period, the amount
set forth for such Calculation Period in Schedule I
attached hereto.
Trade Date:........................................ February 17, 2006
Effective Date:.................................... Xxxxx 00, 0000
Xxxxxxxxxxx Date:.................................. October 25, 2010
Fixed Amounts:
Fixed Rate Payer:......................... Party B
Fixed Rate Payer Payment Dates:........... The 25th calendar day of each month during the Term
of this Transaction, commencing April 25, 2006 and
ending on the Termination Date, subject to adjustment in
accordance with the Business Day Convention
Fixed Rate Payer Period End
Dates:.................................. The 25th calendar day of each month during the Term of
this Transaction, commencing April 25, 2006 and
ending on the Termination Date, subject to No
Adjustment.
Fixed Rate:............................... 5.00%
Fixed Amount:............................. To be determined in accordance with the following
formula:
10 * Fixed Rate * Notional Amount * Fixed Rate Day
Count Fraction.
Fixed Rate Day Count Fraction:............ 30/360
Floating Amounts:
Floating Rate Payer:...................... Party A
Floating Rate Payer Payment
Dates:.................................. The 25th calendar day of each month during the Term of
this Transaction, commencing April 25, 2006 and ending on
the Termination Date, subject to adjustment in accordance
with the Business Day Convention.
Floating Rate Payer Period End
Dates:.................................. The 25th calendar day of each month during the Term of
this Transaction, commencing April 25, 2006 and ending on the
Termination Date, subject to adjustment in accordance with
the Business Day Convention.
Floating Rate Option:..................... USD-LIBOR-BBA
Floating Amount:.......................... To be determined in accordance with the following
formula:
10 * Floating Rate * Notional Amount *
Floating Rate Day Count Fraction.
Designated Maturity:...................... One month
Floating Rate Day Count Fraction:......... Actual/360
Reset Dates:.............................. The first day of each Calculation Period.
Compounding:.............................. Inapplicable
Business Days:..................................... New York and Los Angeles
Business Day Convention:........................... Following
2. Account Details and Settlement Information:
Payments to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: Xxxxxx Xxxxxxx Capital Services Inc.
Payments to Party B:
Deutsche Bank
ABA No.: 000000000
Account No: 00000000
Acct Name: NYLTD Funds Control - Stars West
Ref: Xxxxxx Xxxxxxx Capital I Inc. 2006-NC2
3. Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed by Deutsche Bank
National Trust Company (i) this Confirmation is executed and delivered by
Deutsche Bank National Trust Company not in its individual capacity but
solely as Trustee under the PSA in the exercise of the powers and
authority conferred and invested in it as trustee thereunder, (ii) each of
the representations, undertakings and agreements herein made on behalf of
the Trust is made and intended not as personal representations of the
Trustee but is made and intended for the purpose of binding only the
Trust, and (iii) under no circumstances shall Deutsche Bank National Trust
Company in its individual capacity be personally liable for the payment of
any indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By: /s/: Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as
Trustee for Xxxxxx Xxxxxxx Capital
I Inc. Trust 2006-NC2, Mortgage
Pass-Through Certificates, Series
2006-NC2
By: /s/: Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Associate
SCHEDULE I
--------------------------------------------------------------------------------
Line Calculation Period Notional Amount ($) Multiplier
--------------------------------------------------------------------------------
1 Effective Date 4/25/2006 135,967,955.97 10
2 4/25/2006 5/25/2006 130,418,191.01 10
3 5/25/2006 6/25/2006 125,400,452.77 10
4 6/25/2006 7/25/2006 120,547,682.42 10
5 7/25/2006 8/25/2006 115,851,640.80 10
6 8/25/2006 9/25/2006 111,304,733.81 10
7 9/25/2006 10/25/2006 106,899,990.85 10
8 10/25/2006 11/25/2006 102,631,042.28 10
9 11/25/2006 12/25/2006 98,492,095.65 10
10 12/25/2006 1/25/2007 94,478,039.42 10
11 1/25/2007 2/25/2007 90,584,148.41 10
12 2/25/2007 3/25/2007 86,806,195.93 10
13 3/25/2007 4/25/2007 83,140,543.28 10
14 4/25/2007 5/25/2007 79,601,216.21 10
15 5/25/2007 6/25/2007 76,213,595.30 10
16 6/25/2007 7/25/2007 72,971,137.24 10
17 7/25/2007 8/25/2007 69,867,582.47 10
18 8/25/2007 9/25/2007 66,896,942.63 10
19 9/25/2007 10/25/2007 64,053,489.19 10
20 10/25/2007 11/25/2007 61,331,744.82 10
21 11/25/2007 12/25/2007 58,129,270.74 10
22 12/25/2007 1/25/2008 16,400,973.68 10
23 1/25/2008 2/25/2008 15,762,624.37 10
24 2/25/2008 3/25/2008 15,189,246.94 10
25 3/25/2008 4/25/2008 14,636,746.11 10
26 4/25/2008 5/25/2008 14,104,358.97 10
27 5/25/2008 6/25/2008 13,591,351.51 10
28 6/25/2008 7/25/2008 13,097,014.00 10
29 7/25/2008 8/25/2008 12,620,524.33 10
30 8/25/2008 9/25/2008 12,161,380.64 10
31 9/25/2008 10/25/2008 11,718,949.64 10
32 10/25/2008 11/25/2008 11,277,231.20 10
33 11/25/2008 12/25/2008 10,796,700.39 10
34 12/25/2008 1/25/2009 8,524,065.98 10
35 1/25/2009 2/25/2009 8,230,310.70 10
36 2/25/2009 3/25/2009 7,946,516.92 10
37 3/25/2009 4/25/2009 7,672,353.27 10
38 4/25/2009 5/25/2009 7,407,499.08 10
39 5/25/2009 6/25/2009 7,151,644.16 10
40 6/25/2009 7/25/2009 6,904,488.15 10
41 7/25/2009 8/25/2009 6,665,736.94 10
42 8/25/2009 9/25/2009 6,435,113.97 10
43 9/25/2009 10/25/2009 6,212,347.49 10
44 10/25/2009 11/25/2009 5,997,174.64 10
45 11/25/2009 12/25/2009 5,789,341.13 10
46 12/25/2009 1/25/2010 5,588,600.94 10
47 1/25/2010 2/25/2010 5,394,715.69 10
48 2/25/2010 3/25/2010 5,207,455.93 10
49 3/25/2010 4/25/2010 5,026,599.11 10
50 4/25/2010 5/25/2010 4,851,930.03 10
51 5/25/2010 6/25/2010 4,683,240.55 10
52 6/25/2010 7/25/2010 4,520,329.39 10
53 7/25/2010 8/25/2010 4,363,001.95 10
54 8/25/2010 9/25/2010 4,211,069.99 10
55 9/25/2010 Termination Date 4,064,351.48 10
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations with respect to
Party A and Party B: None.
(b) Credit Support Obligations.
(i) "Delivery Amount" and "Return Amount" each has the meaning specified
in Paragraph 3. "Credit Support Amount" has the meaning specified in
Paragraph 3; provided, however, that in the event Party A elects or
is required to post collateral pursuant to Part 5(f) of the Schedule
due to a ratings downgrade or withdrawal by S&P, "Credit Support
Amount" means, with respect to a Valuation Date, an amount equal to
the greater of (1) the sum of (a) the MTM and (b) the Volatility
Buffer multiplied by the Notional Amount and (2) zero. "MTM" means
the Secured Party's Exposure for that Valuation Date. "Volatility
Buffer" means (a) if, on the date of determination, Party A has a
short-term credit rating of "A-2" by S&P and the Termination Date of
the Transaction will occur in less than 5 years, 3.25%, (b) if, on
the date of determination, Party A has a short-term credit rating of
"A-2" by S&P and the Termination Date of the Transaction will occur
in less than 10 years but more than 5 years, 4.00%, (c) if, on the
date of determination, Party A has a short-term credit rating of
"A-3" by S&P and the Termination Date of the Transaction will occur
in less than 5 years, 4.00%, (d) if, on the date of determination,
Party A has a short-term credit rating of "A-3" by S&P and the
Termination Date of the Transaction will occur in less than 10 years
but more than 5 years, 5.00%, (e) if, on the date of determination,
Party A has a long-term credit rating of "BB+" or lower by S&P and
the Termination Date of the Transaction will occur in less than 5
years, 4.50%, or (f) if, on the date of determination, Party A has a
long-term credit rating of "BB+" or lower by S&P and the Termination
Date of the Transaction will occur in less than 10 years but more
than 5 years, 5.75%.
In the event Party A elects or is required to post collateral
pursuant to Part 5(f) of the Schedule due to a ratings downgrade or
withdrawal by S&P, the Valuation Agent shall verify its calculation
of the Secured Party's Exposure on a quarterly basis by seeking two
quotations from Reference Market-makers. If two Reference
Market-makers are not available to provide a quotation, then fewer
than two Reference Market-makers may be used for such purpose. If no
Reference Market-makers are available, then the Valuation Agent's
estimates at mid-market will be used. The Valuation Agent may not
obtain the quotations referred to above from the same person in
excess of four times during any 12 month period. Where more than one
quotation is obtained, the quotation representing the greatest
amount of Exposure shall be used by the Valuation Agent. In the
event the verification procedures set forth above indicate that
there is a deficiency in the amount of Eligible Collateral that has
been Transferred to the Secured Party, the Pledgor shall Transfer
the amount of Eligible Collateral necessary to cure such deficiency
to the Secured Party within three Local Business Days.
(ii) Eligible Collateral. The following items will qualify as "Eligible
Collateral" for Party A:
Valuation
Eligible Collateral Party A Percentage
--------------------------------------------------- ------- ----------
(A) Cash X 100.0%
(B) Treasury Securities with a remaining maturity of X 98.5%
52 weeks or less
(C) Treasury Securities with a remaining maturity of X 93.6%
more than 52 weeks but no more than 5 years
(D) Treasury Securities with a remaining maturity of X 89.9%
more than 5 years but no more than 10 years
(E) Treasury Securities with a remaining maturity of X 83.9%
more than 10 years but no more than 30 years
(F) Agency Notes with a remaining maturity of no more X 81.3%
than 15 years
(G) Agency Notes with a remaining maturity of more X 74.8%
than 15 years but no more than 30 years
(H) Commercial Paper rated "A-1+" by S&P and "P-1" by X 98.0%
Xxxxx'x, with a remaining maturity of 180 days or
less
(I) Commercial Paper rated "A-1" by S&P and P-1 by X 97.0%
Xxxxx'x, with a remaining maturity of 180 days or
less
(J) Commercial Paper rated "A-1" by S&P and "P-1" by X 94.0%
Xxxxx'x, with a remaining maturity of more than
180 days or but no more than 360 days
Notwithstanding the above, Commercial Paper will qualify as Eligible
Collateral for Party A only if the aggregate amount of Commercial
Paper Transferred as Eligible Collateral under this Annex
constitutes the obligations of 10 or more issuers.
(iii) Other Eligible Support: Not applicable.
(iv) Thresholds.
(A) "Independent Amount" means, with respect to Party A, zero;
provided, however, if Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due to a
ratings downgrade or withdrawal by Xxxxx'x or Fitch, then the
"Independent Amount" with respect to Party A shall be the
aggregate of any Transaction Independent Amounts in respect of
all Transactions outstanding at that time. "Transaction
Independent Amount" shall mean (unless otherwise agreed by
Xxxxx'x and Fitch) 1% of the Notional Amount of each
Transaction.
"Independent Amount" means, with respect to Party B, zero.
(B) "Threshold" means with, respect to Party A: Infinite;
provided, however, if Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due to a
ratings downgrade or withdrawal by Xxxxx'x or Fitch, then the
"Threshold" with respect to Party A shall be zero (unless
otherwise agreed by Xxxxx'x and Fitch);
"Threshold" means with respect to Party B: Infinite.
(C) "Minimum Transfer Amount" means with respect to Party A: USD
100,000; and with respect to Party B: USD 100,000; provided,
however, that if such party is a Defaulting Party at the time,
"Minimum Transfer Amount" shall mean zero with respect to such
party.
(D) Rounding. The Delivery Amount will be rounded up to the
nearest multiple of $1000 and the Return Amount will be
rounded down to the nearest multiple of $1000.
(c) Valuation and Timing.
(i) "Valuation Agent" means for purposes of Paragraphs 3 and 5, the
party making the demand under Paragraph 3, and, for purposes of
Paragraph 6(d), the Secured Party receiving or deemed to receive the
Distributions or the Interest Amount, as applicable.
(ii) "Valuation Date" means (A) each and every Wednesday commencing on
the first such date following the date hereof or if any Wednesday is
not a Local Business Day, the next succeeding Local Business Day and
(B) any other Local Business Day on which notice is made before
12:00 noon, New York time on the immediately preceding Local
Business Day.
(iii) "Valuation Time" means the close of business in New York on the New
York Banking Day before the Valuation Date or date of calculation,
as applicable, or any time on the Valuation Date or date of
calculation, as applicable; provided that the calculations of Value
and Exposure will be made as of approximately the same time on the
same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
(v) The Valuation Agent's calculations pursuant to the terms hereof
shall be made in accordance with standard market practice, using
commonly accepted third party sources that comply with S&P's
criteria (e.g. Bloomberg, Bridge Information Services, Reuters and
Telerate).
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the party
specified (that party being the Affected Party of the Termination Event
occurs with respect to that party): Not Applicable.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. The Pledgor need not obtain the Secured Party's consent for
any substitution pursuant to Paragraph 4(d).
(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 of the dispute
is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support or of any Transfer of Eligible Credit Support
or Posted Credit Support, as the case may be, will be calculated by
the Valuation Agent in accordance with standard market practice
using third party sources (such as, by way of example only,
Bloomberg or Reuters) where available.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodian.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(A) Party B is not a Defaulting Party.
(B) Posted Collateral may be held only in the following
jurisdictions: the United States of America.
Initially, the Custodian for Party B is Party B
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will
apply.
(h) Distributions and Interest Amount.
(i) "Interest Rate". The "Interest Rate" shall be the rate actually
earned by the Custodian on Posted Collateral in the form of Cash.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the last 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).
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support. "Value" and "Transfer"
with respect to Other Eligible Support and Other Posted Support each
means: Not applicable.
(k) Demands and Notices
All demands, specifications and notices to Party A under this Annex will
be made to:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx
0xx Xx. - FID Controllers
Xxx Xxxx, XX 00000
Attn: FID Collateral Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxxxxxxx.xxx
and all demands, specifications and notices to Party B under this Annex
will be to:
Deutsche Bank National Trust Company, as trustee of the Trust
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Trust Administration - MS06C2
Facsimile: (000) 000-0000
Phone: (000) 000-0000
; provided that any demand, specification or notice may be made by
telephone ("Telephone Notice") between employees of each party if such
Telephone Notice is confirmed by a subsequent written instruction (which
may be delivered via facsimile or email) by the close of business on the
same day that such Telephone Notice is given.
(l) Addresses for Transfers.
Party A:
Cash: CITIBANK, New York
ABA No.: 021 000 089
Account No.: 4072 - 4601
Treasury Securities
and Agency Notes: Bank of New York, New York/Xxxxxx Xxxxxxx & Co.
Incorporated ABA No.: 000000000
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: As provided by Party B
DTC Eligible Securities: As provided by Party B
(m) Other Provisions.
(i) Notwithstanding any other provision in this Agreement to the
contrary, no full or partial failure to exercise and no delay in
exercising, on the part of Party A or Party B, any right, remedy,
power or privilege permitted hereunder shall operate in any way as a
waiver thereof by such party, including without limitation any
failure to exercise or any delay in exercising to any or to the full
extent of such party's rights with respect to transfer timing
pursuant to Paragraph 4(b), regardless of the frequency of such
failure or delay.
(ii) In all cases, in order to facilitate calculation of the Delivery
Amount and the Return Amount for a particular Valuation Date in
accordance with Paragraph 3 of this Annex:
(A) Eligible Collateral;
(B) Exposure; and
(C) Posted Collateral
shall each be expressed in US Dollars. If any of these items are
expressed in a currency other than US Dollars, then they shall be
converted into US Dollar amounts at the spot exchange rate
determined by the Valuation Agent on that Valuation Date.
(iii) Form of Annex. The parties hereby agree that the text of the body of
this Annex is intended to be the printed form of 1994 ISDA Credit
Support Annex (Bilateral Form - ISDA Agreements Subject to New York
Law Only version) as published and copyrighted by the International
Swaps and Derivatives Association, Inc.
(n) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to
this Annex, Paragraph 1(b) or Paragraph 2 or the definitions of Paragraph
12, (a) the term "Secured Party" as used in this Annex shall mean only
Party B, (b) the term "Pledgor" as used in this Annex shall mean only
Party A, (c) only Party A makes the pledge and grant in Paragraph 2, the
acknowledgement in the final sentence of Paragraph 8(a) and the
representations in paragraph 9 and (d) only Party A will be required to
make Transfers of Eligible Credit Support hereunder.
(o) Additional Definitions
"Agency Notes" means U.S. Dollar-denominated fixed rate, non-amortising,
non-mortgage-backed, senior debt securities of fixed maturity, rated Aaa
by Xxxxx'x and AAA by S&P issued by any of the Federal Home Loan Banks
(including their consolidated obligations issued through the Office of
Finance of the Federal Home Loan Bank System), the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Federal Farm Credit Bank.
"Commercial Paper" means U.S. Dollar-denominated, coupon-bearing,
commercial paper issued by a corporation, finance company, partnership or
limited liability company.
"Treasury Securities" means U.S. Dollar-denominated, coupon-bearing,
senior debt securities of the United States of America issued by the U.S.
Treasury Department and backed by the full faith and credit of the United
States of America.
(p) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Annex is executed by Deutsche Bank National
Trust Company (i) this Annex is executed and delivered by Deutsche Bank
National Trust Company not in its individual capacity but solely as
Trustee under the PSA in the exercise of the powers and authority
conferred and invested in it as trustee thereunder, (ii) each of the
representations, undertakings and agreements herein made on behalf of the
Trust is made and intended not as personal representations of the Trustee
but is made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall Deutsche Bank National Trust Company 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 Annex.
IN WITNESS WHEREOF, the parties have executed this Credit Support
Annex by their duly authorized officers as of the date hereof.
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By: /s/: Xxxxxxxxx Xxxxxx
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as Trustee
for Xxxxxx Xxxxxxx Capital I Inc. Trust
2006-NC2, Mortgage Pass-Through
Certificates, Series 2006-NC2
By: /s/: Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Associate
[XXXXXX XXXXXXX LOGO] XXXXXX XXXXXXX
0000 XXXXXXXX
XXX XXXX, XX 00000-0000
Xxxxx 00, 0000
Xxxxxxxx Bank National Trust Company
A national banking association, not individually,
but solely as Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2 (the
"Trust")Mortgage Pass-Through
Certificates, Series 2006-NC2
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement and that certain
ISDA Schedule, each dated as March 30, 2006 between Xxxxxx Xxxxxxx Capital
Services Inc., a Delaware corporation (hereinafter "MSCS") and Deutsceh Bank
national Trust Company, a national banking association, not individually, but
solely as Trustee for Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-NC2, Mortgage
Pass-Through Certificates, Series 2006-NC2 (hereinafter "Counterparty") (such
ISDA Master Agreement and ISDA Schedule, together with each Confirmation
exchanged between the parties pursuant thereto, hereinafter the "Agreement"),
Xxxxxx Xxxxxxx, a Delaware corporation (hereinafter "MS"), hereby irrevocably
and unconditionally guarantees to Counterparty, with effect from the date of the
Agreement, the due and punctual payment of all amounts payable by MSCS under the
Agreement when the same shall become due and payable, whether on Scheduled
Payment Dates, upon demand, upon declaration of termination or otherwise, in
accordance with the terms of the Agreement and giving effect to any applicable
grace period. Upon failure of MSCS punctually to pay any such amounts, and upon
written demand by Counterparty to MS at its address set forth in the signature
block of this Guarantee (or to such other address as MS may specify in writing),
MS agrees to pay or cause to be paid such amounts; provided that delay by
Counterparty in giving such demand shall in no event affect MS's obligations
under this Guarantee.
MS hereby agrees that its obligations hereunder shall be unconditional
and will not be discharged except by complete payment of the amounts payable
under the Agreement, irrespective of any claim as to the Agreement's validity,
regularity or enforceability or the lack of authority of MSCS to execute or
deliver the Agreement; or any change in or amendment to the Agreement; or any
waiver or consent by Counterparty with respect to any provisions thereof; or the
absence of any action to enforce the Agreement or the recovery of any judgment
against MSCS or of any action to enforce a judgment against MSCS under the
Agreement; or any similar circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor generally. MS hereby waives
diligence, presentment, demand on MSCS for payment or otherwise (except as
provided hereinabove), filing of claims, requirement of a prior proceeding
against MSCS and protest or notice, except as provided for in the Agreement with
respect to amounts payable by MSCS. If at any time payment under the Agreement
is rescinded or must be otherwise restored or returned by Counterparty upon the
insolvency, bankruptcy or reorganization of MSCS or MS or otherwise, MS's
obligations hereunder with respect to such payment shall be reinstated upon such
restoration or return being made by Counterparty.
MS represents to Counterparty as of the date hereof, which
representations will be deemed to be repeated by MS on each date on which a
Transaction is entered into, that:
(1) it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to execute
and deliver this Guarantee and to perform the provisions of this Guarantee on
its part to be performed;
(2) its execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do not
contravene any provision of its certificate of incorporation or by-laws or any
law, regulation or contractual restriction binding on it or its assets;
(3) all consents, authorizations, approvals and clearances
(including, without limitation, any necessary exchange control approval) and
notifications, reports and registrations requisite for its due execution,
delivery and performance of this Guarantee have been obtained from or, as the
case may be, filed with the relevant governmental authorities having
jurisdiction and remain in full force and effect and all conditions thereof have
been duly complied with and no other action by, and no notice to or filing with,
any governmental authority having jurisdiction is required for such execution,
delivery or performance; and
(4) this Guarantee is its legal, valid and binding obligation
enforceable against it in accordance with its terms except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights or by general equity
principles.
By accepting this Guarantee and entering into the Agreement,
Counterparty agrees that MS shall be subrogated to all rights of Counterparty
against MSCS in respect of any amounts paid by MS pursuant to this Guarantee,
provided that MS shall be entitled to enforce or to receive any payment arising
out of or based upon such right of subrogation only to the extent that it has
paid all amounts payable by MSCS under the Agreement.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York. All capitalized terms not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.
XXXXXX XXXXXXX
By: /s/ Xxxxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxxxx X. Xxxxx
Title: Assistant Treasurer
Address: 0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Fax No.: 000-000-0000
Ph. No.: 212-761-4000
EXHIBIT U
PURCHASE AGREEMENT
================================================================================
THIRD AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
----------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
NC CAPITAL CORPORATION,
Seller
----------
Dated as of December 1, 2005
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. COMPLIANCE WITH REGULATION AB................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
THIRD AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
This THIRD AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT (the "Agreement"), dated as of December 1, 2005, by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office at 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and NC Capital
Corporation, a California corporation, having an office at 00000 Xxx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain Second
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of December 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003, Amendment No. 2, dated as of December 30, 2003, Amendment No. 3, dated as
of January 29, 2004, Amendment No. 4, dated as of March 30, 2004, Amendment No.
5, dated as of June 28, 2004 and Amendment No. 6, dated as of January 28, 2005
(the "Original Purchase Agreement"), pursuant to which the Seller may sell, from
time to time, to the Purchaser, and the Purchaser may purchase, from time to
time, from the Seller, certain conventional adjustable and fixed rate B/C,
residential first and second mortgage loans (the "Mortgage Loans") as described
therein, and which shall be delivered in pools of whole loans (each, a "Mortgage
Loan Package") on various dates as provided therein (each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to amend
the Original Purchase Agreement to make certain modifications as set forth
herein:
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall have
the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Third Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees, and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms or
any modifications thereof provides for amortization beyond its scheduled
maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a day on
which banking and savings and loan institutions, in the State of New York or the
State in which the Originator's servicing operations are located or (iii) the
state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to time
shall purchase, and the Seller from time to time shall sell, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio, expressed
as a percentage, of the (a) sum of (i) the outstanding principal balance of the
Second Lien Loan and (ii) the outstanding principal balance as of such date of
any mortgage loan or mortgage loans that are senior or equal in priority to the
Second Lien Loan and which are secured by the same Mortgaged Property to (b) the
Appraised Value as determined pursuant to the Underwriting Guidelines of the
related Mortgaged Property as of the origination of the Second Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to Appendix
E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement".
Custodian: Deutsche Bank Trust Company Americas, or the Custodian's
successor in interest or permitted assigns, or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or replaced or
to be replaced with a Qualified Substitute Mortgage Loan by the Seller in
accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage Loan,
the period commencing on the day immediately succeeding the Due Date for such
Mortgage Loan occurring in the month preceding the month of the Remittance Date
and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant to
Section 2.06 of the Servicing Agreement (with respect to each Mortgage Loan, as
specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on the
related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine on each Interest Rate Adjustment Date the Mortgage Interest Rate for
such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such law
is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall have
the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Originator
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio
(expressed as a percentage) of the outstanding principal amount of the Mortgage
Loan as of the related Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is constructed in
a factory in sections in accordance with the Federal Manufactured Home
Construction and Safety Standards adopted on July 15, 1976, by the Department of
Housing and Urban Development ("HUD Code"), as amended in 2000, which preempts
state and local building codes. Each unit is identified by the presence of a HUD
Plate/Compliance Certificate label. The sections are then transported to the
site and joined together and affixed to a pre-built permanent foundation (which
satisfies the manufacturer's requirements and all state, county, and local
building codes and regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete unit of walls,
floors, and roof. The underneath part of the home may have running gear (wheels,
axles, and brakes) that enable it to be transported to the permanent site. The
wheels and hitch are removed prior to anchoring the unit to the permanent
foundation. The manufactured home must be classified as real estate and taxed
accordingly. The permanent foundation may be on land owned by the Mortgagor or
may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create, with
respect to a First Lien Loan, a first lien, and with respect to a Second Lien
Loan, a second lien, in each case, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit A annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate Mortgage
Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the
related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to the
Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan in the related Mortgage
Loan Package: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17) with
respect to each Second Lien Loan and First Lien Loan with a second lien behind
it, the combined principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
due and collected on or before the related Cut-off Date; (18) a code indicating
whether there is a simultaneous second; (19) delinquency status as of the
related Cut-off Date; (20) with respect to each Adjustable Rate Mortgage Loan,
the Interest Rate Adjustment Date; (21) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (22) with respect to each Adjustable Rate
Mortgage Loan , the Lifetime Rate Cap under the terms of the Mortgage Note; (23)
with respect to each Adjustable Rate Mortgage Loan, a code indicating the type
of Index; (24) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First or Second Lien Loan); (25) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(26) a code indicating the documentation style (i.e., full, alternative or
reduced); (27) the loan credit classification (as described in the Underwriting
Guidelines); (28) whether such Mortgage Loan provides for a prepayment penalty
and, if applicable, the prepayment penalty period; (29) the Mortgage Interest
Rate as of origination; (30) the credit risk score (FICO score); (31) the date
of origination; (32) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate adjustment period; (33) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (34) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(35) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (36) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (37) a code indicating whether the Mortgage
Loan is a High Cost Loan; (38) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (39) the Due Date for the first Monthly Payment; (40) the
original Monthly Payment due; (41) with respect to the related Mortgagor, the
debt-to-income ratio; (42) sales price; (43) Appraised Value; (44) appraisal
type; (45) appraisal date; and (46) a code indicating whether the Mortgage Loan
is a Home Loan. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real property
(or leasehold estate, if applicable) securing repayment of the debt evidenced by
the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which does not contain a provision
pursuant to which the Mortgagor may convert the Adjustable Rate Mortgage Loan to
a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to be made
in respect of a Mortgage Loan which, in the good faith judgment of the
Originator, will not or, in the case of a proposed advance, would not, be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds or
otherwise. The determination by the Originator that it has made a Nonrecoverable
Advance or that any proposed advance of principal and interest, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the Board
or the Vice Chairman of the Board or a President or a Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Seller, reasonably acceptable to the Purchaser, provided that any Opinion of
Counsel relating to (a) the qualification of any account required to be
maintained pursuant to this Agreement as an Eligible Account, (b) qualification
of the Mortgage Loans in a REMIC or (c) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of the Seller and any servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Seller or any servicer of the Mortgage Loans or in an Affiliate
of either and (iii) is not connected with the Seller or any servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting forth
the general terms and conditions of the transactions consummated herein and
identifying the Mortgage Loans to be purchased from time to time hereunder, by
and between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or assigns or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or the
Originator, who had no interest, direct or indirect, in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation was not
affected by the approval or disapproval of the Mortgage Loan, and such appraiser
and the appraisal made by such appraiser both satisfied the requirements of
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transaction in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transaction.
Reconstitution Agreements: The agreement or agreements entered into by the
Seller and/or the Originator and the Purchaser and/or certain third parties on
the Reconstitution Date or Dates with respect to any or all of the Mortgage
Loans sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer
or a Securitization Transaction pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time to
time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage on
the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Seller: NC Capital Corporation, its successors in interest and assigns.
Seller Information: As defined in Subsection 32.04(a).
Servicing Agreement: The Amended and Restated Interim Servicing Agreement,
dated as of December 1, 2005, between the Purchaser and the Originator,
providing for the Originator to service the Mortgage Loans as specified in the
Servicing Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the Servicing
Agreement, a fee payable monthly equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly and shall be pro-rated for any portion
of a month during which the Mortgage Loan is serviced by the Originator under
the Servicing Agreement. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by this Agreement) of such Monthly Payment
collected by the Originator, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Servicing
Agreement.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Originator consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all rights to
service the Mortgage Loans; (b) any payments to or monies received by the Seller
for servicing the Mortgage Loans; (c) any late fees, penalties or similar
payments with respect to the Mortgage Loans; (d) all agreements or documents
creating, defining or evidencing any such servicing rights to the extent they
relate to such servicing rights and all rights of the Seller thereunder; (e)
Escrow Payments or other similar payments with respect to the Mortgage Loans and
any amounts actually collected by the Seller with respect thereto; (f) all
accounts and other rights to payment related to any of the property described in
this paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary, as
may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans designated
by the Purchaser as being entitled to the benefits of the indemnifications set
forth in Sections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee, shall
receive the transfer of servicing responsibilities and begin to perform the
servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Originator, a
copy of which is attached hereto as Exhibit G and a then-current copy of which
shall be attached as an exhibit to the related Assignment and Conveyance.
VA Approved Lender: Those lenders which are approved by the VA to act as a
lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser agrees to
purchase from time to time, Mortgage Loans having an aggregate principal balance
on the related Cut-off Date in an amount as set forth in the related Purchase
Price and Terms Agreement, or in such other amount as agreed by the Purchaser
and the Seller as evidenced by the actual aggregate principal balance of the
Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with certain
information constituting a preliminary listing of the Mortgage Loans to be
purchased on each Closing Date in accordance with the related Purchase Price and
Terms Agreement and this Agreement (each, a "Preliminary Mortgage Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the related
Mortgage Loan Schedule for the Mortgage Loans to be purchased on a particular
Closing Date to the Purchaser at least two (2) Business Days prior to the
related Closing Date. The related Mortgage Loan Schedule shall be the related
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of par
as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser shall
pay to the Seller, at closing, accrued interest on the current principal amount
of the related Mortgage Loans as of the related Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans. The Purchase Price plus
accrued interest as set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an account designated
by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due after
the related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the Mortgage
Loans net of applicable Servicing Fees (minus that portion of any such payment
which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off Date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing Date, the
Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of Servicing
Files.
The Seller, simultaneously with the delivery of the Mortgage Loan Schedule
with respect to the related Mortgage Loan Package to be purchased on each
Closing Date, shall execute and deliver an Assignment and Conveyance Agreement
in the form attached hereto as Exhibit H (the "Assignment and Conveyance
Agreement"). The Seller shall cause the Servicing File retained by the
Originator pursuant to this Agreement to be appropriately identified in the
Seller's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
cause the Originator to release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement or the Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall be in
the name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Originator after the related Cut-off Date on
or in connection with a Mortgage Loan shall be vested in the Purchaser or one or
more designees of the Purchaser; provided, however, that all funds received on
or in connection with a Mortgage Loan shall be received and held by the Seller
or the Originator in trust for the benefit of the Purchaser or the appropriate
designee of the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's balance
sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Mae or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than three
(3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian in the
Custodial Agreement, including an original or copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, within 90 days following the related Closing Date (other than with
respect to the Assignments of Mortgage which shall be delivered to the Custodian
in blank and recorded subsequently by the Purchaser or its designee), and in the
event that the Seller does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Purchaser, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in Subsection 9.03. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver an original document submitted for recordation to the appropriate
public recording office within the specified period due to a delay caused by the
recording office in the applicable jurisdiction; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an internal
quality control program that verifies, on a regular basis, the existence and
accuracy of the legal documents, credit documents, property appraisals, and
underwriting decisions. The program shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on a
servicing released basis. Subject to, and upon the terms and conditions of this
Agreement and the Servicing Agreement (with respect to each Mortgage Loan, for
an interim period, as specified therein), the Seller hereby sells, transfers,
assigns, conveys and delivers to the Purchaser the Servicing Rights. The
Purchaser shall retain the Originator as independent contract servicer of the
Mortgage Loans pursuant to and in accordance with the terms and conditions
contained in the Servicing Agreement. Pursuant to the Servicing Agreement, the
Originator shall begin servicing the Mortgage Loans on behalf of the Purchaser
and shall be entitled to the Servicing Fee and any Ancillary Income with respect
to such Mortgage Loans from the related Closing Date until the termination of
the Servicing Agreement with respect to any of the Mortgage Loans as set forth
in the Servicing Agreement. The Seller shall cause the Originator to service the
Mortgage Loans in accordance with the terms of the Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee, shall
assume all servicing responsibilities related to, and the Seller shall cause the
Originator to cease all servicing responsibilities related to the related
Mortgage Loans subject to such Transfer Date. The Transfer Date shall be the
date determined in accordance with Section 6.03 of the Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
On or prior to the applicable Transfer Date, the Seller shall cause the
Originator shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall cause the Originator to mail to
the Mortgagor of each related Mortgage Loan a letter advising such Mortgagor of
the transfer of the servicing of the related Mortgage Loan to the Purchaser, or
its designee, in accordance with the Xxxxxxxx Xxxxxxxx National Affordable
Housing Act of 1990; provided, however, the content and format of the letter
shall have the prior approval of the Purchaser. The Seller shall cause the
Originator to provide the Purchaser with copies of all such related notices no
later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller shall
cause the Originator to transmit to the applicable taxing authorities and
insurance companies (including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the servicing to the
Purchaser, or its designee, and instructions to deliver all notices, tax bills
and insurance statements, as the case may be, to the Purchaser from and after
the related Transfer Date. The Seller shall cause the Originator to provide the
Purchaser with copies of all such notices no later than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the Originator
to forward to the Purchaser, or its designee, all servicing records and the
Servicing File in the Originator's possession relating to each related Mortgage
Loan including the information enumerated in the Servicing Agreement (with
respect to each such Mortgage Loan, for an interim period, as specified
therein).
(d) Escrow Payments. The Seller shall cause the Originator to provide the
Purchaser, or its designee, with immediately available funds by wire transfer in
the amount of the net Escrow Payments and suspense balances and all loss draft
balances associated with the related Mortgage Loans. The Seller shall cause the
Originator to provide the Purchaser with an accounting statement of Escrow
Payments and suspense balances and loss draft balances sufficient to enable the
Purchaser to reconcile the amount of such payment with the accounts of the
Mortgage Loans. Additionally, the Seller shall cause the Originator to wire
transfer to the Purchaser the amount of any agency, trustee or prepaid Mortgage
Loan payments and all other similar amounts held by the Originator.
(e) Payoffs and Assumptions. The Seller shall cause the Originator to
provide to the Purchaser, or its designee, copies of all assumption and payoff
statements generated by the Originator on the related Mortgage Loans from the
related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Originator on each related Mortgage
Loan shall be properly applied by the Originator to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The Seller shall cause
the amount of any related Monthly Payments received by the Originator after the
Transfer Date to be forwarded to the Purchaser by overnight mail on the date of
receipt. The Seller shall cause the Originator to notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Originator forwards with its payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Seller shall cause
the Originator to assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Originator after the
Transfer Date with respect to related Mortgage Loans then in foreclosure or
bankruptcy; provided, for purposes of this Agreement, necessary and appropriate
legal application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the it
after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication errors;
(2) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after such Transfer
Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall or the
Seller shall cause the Originator to be liable for the amount of such
shortage. The Seller shall or the Seller shall cause the Originator to
reimburse the Purchaser for the amount of such shortage within thirty (30)
days after receipt of written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(5) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Originator with respect to the related Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall or shall cause the Originator to, on
or before the Transfer Date, reconcile principal balances and make any monetary
adjustments required by the Purchaser. Any such monetary adjustments will be
transferred between the Seller, the Originator and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Originator to file all
IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be filed on or
before the Transfer Date in relation to the servicing and ownership of the
related Mortgage Loans. The Seller or Originator shall provide copies of such
forms to the Purchaser upon request and shall reimburse the Purchaser for any
costs or penalties incurred by the Purchaser due to the Seller's or Originator's
failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that as of
the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Servicing Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder and thereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by the Seller, the sale of
the Mortgage Loans to the Purchaser, the consummation of the transactions
contemplated hereby and thereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Service. Originator has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Originator is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Originator acknowledges and agrees that
the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Originator,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the sale of the
Mortgage Loans will not cause the Seller to become insolvent. The sale of the
Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any
of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or order of,
or registration or filing with, or notice to any court or governmental agency or
body including HUD, the FHA or the Department of Veterans Affairs is required
for the execution, delivery and performance by the Seller of or compliance by
the Seller with this Agreement or the Mortgage Loans, the delivery of a portion
of the Mortgage Files to the Custodian or the sale of the Mortgage Loans or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's portfolio at the
related Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the related
Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any information,
statement, tape, diskette, report, form, or other document furnished or to be
furnished pursuant to this Agreement or any Reconstitution Agreement or in
connection with the transactions contemplated hereby (including any
Securitization Transaction or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of the
Mortgage Loans as a sale on the books and records of the Seller and the Seller
has determined that the disposition of the Mortgage Loans pursuant to this
Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each Mortgage
and the indebtedness evidenced by each Mortgage Note, except for the Assignments
of Mortgage which have been sent for recording, and upon recordation the Seller
will be the owner of record of each Mortgage and the indebtedness evidenced by
each Mortgage Note, and upon the sale of the Mortgage Loans to the Purchaser,
the Seller will retain the Mortgage Files with respect thereto in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
(q) Origination. The Originator's decision to originate any mortgage loan
or to deny any mortgage loan application is an independent decision based upon
Originator's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
(r) Compliance with Anti-Money Laundering Laws. The Seller has complied
with all applicable anti-money laundering laws and regulations, including,
without limitation, the USA Patriot Act of 2001 (collectively, the "Anti-Money
Laundering Laws"); and
(s) Credit Reporting. The Seller shall cause the Originator, as servicer,
to fully furnish, 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 (three of the credit repositories), on a monthly
basis. Additionally, the Seller shall cause the Originator, as servicer, to
transmit full-file credit reporting data for each Mortgage Loan pursuant to
Xxxxxx Xxx Guide Announcement 95-19 and that for each Mortgage Loan, the Seller
shall cause the Originator, as servicer, to report one of the following statuses
each month as follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as to
each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, from the
date of origination except by a written instrument which has been recorded, if
necessary to protect the interests of the Purchaser, and which has been
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as
well as all additional requirements set forth in Section 2.10 of the Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac, as well as all
additional requirements set forth in Section 2.10 of the Servicing Agreement.
All individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to the Illinois Interest Act and prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations, and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit B to the related Assignment and
Conveyance Agreement, a mobile home erected thereon or by a mixed-use property,
a property in excess of 10 acres, or other unique property types. As of the date
of origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes.
In the case of a Manufactured Home, (i) the related manufactured dwelling and
the related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming Seller as mortgagee, (ii) the applicable laws
of the jurisdiction in which the related Mortgaged Property is located will deem
the manufactured dwelling located on such Mortgaged Property to be a part of the
real property on which such dwelling is located, and (iii) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or a
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments not yet
due and payable;
(3) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal; and
(4) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage and
any other agreement executed and delivered by a Mortgagor in connection with a
Mortgage Loan are genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to prepayment penalties).
All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon the
sale of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files or any part thereof with respect thereto not delivered to the Custodian,
the Purchaser or the Purchaser's designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan. The Mortgage Loan
is not assigned or pledged, and the Seller has good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, or with respect to any Mortgage Loan for which the
related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (1), (2) and (3) of Paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, with respect to
Adjustable Rate Mortgage loans, the Lifetime Rate Cap and the Periodic Cap, are
as set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable
in equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with respect
to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The Mortgage Loan
was underwritten in accordance with the Underwriting Guidelines. The Mortgage
Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and
neither the Seller nor the Originator has made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing Date
the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in Paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage
File or the Mortgagor's credit standing that can reasonably be expected to cause
private institutional investors who invest in mortgage loans similar to the
Mortgage Loan to regard the Mortgage Loan as an unacceptable investment, cause
the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered under
the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged Property is
a condominium unit or a planned unit development (other than a de minimis
planned unit development) such condominium or planned unit development project
such Mortgage Loan was originated in accordance with, and the Mortgaged Property
meets the guidelines set forth in the Originator's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with respect
to each Mortgage Loan is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located.
The transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Seller are not subject to the bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage Loan, the
Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent Interests.
The Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are paid or partially paid with funds deposited in any separate account
established by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor,
or paid by any source other than the Mortgagor nor does it contain any other
similar provisions which may constitute a "buydown" provision. The Mortgage Loan
is not a graduated payment mortgage loan and the Mortgage Loan does not have a
shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first (with respect to a First Lien Loan) or a second (with respect to
a Second Lien Loan) lien priority by a title insurance policy, an endorsement to
the policy insuring the mortgagee's consolidated interest or by other title
evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal
amount does not exceed the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. There is
no proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property and the Seller has no knowledge of any
such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Seller and the
Originator with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and regulations,
and have been in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller or the Originator and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller or the Originator executed and delivered any and all notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments. Any
interest required to be paid pursuant to state, federal and local law has been
properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable Rate
Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has occurred
and no state of facts exists or has existed that has resulted or will result in
the exclusion from, denial of, or defense to coverage under any applicable,
special hazard insurance policy, or bankruptcy bond, irrespective of the cause
of such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Servicemembers Civil Relief Act. The Mortgagor has not notified the
Seller, and the Seller has no knowledge of any relief requested or allowed to
the Mortgagor under the Servicemembers Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan application
by a Qualified Appraiser, duly appointed by the Seller or the Originator, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and appraiser
both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to the
effect that the Mortgagor has received all disclosure materials required by, and
the Originator has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall cause the Originator to maintain such
statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or failed
to be taken, no event has occurred and no state of facts exists or has existed
on or prior to the related Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or the
Originator has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all material
respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien Loan,
the related First Lien Loan related thereto is in full force and effect, and
there is no default, breach, violation or event which would permit acceleration
existing under such first Mortgage or Mortgage Note, and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which would
permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien Loan, the
related first lien Mortgage contains a provision which provides for giving
notice of default or breach to the mortgagee under the Mortgage Loan and allows
such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a written
notice of default of any senior mortgage loan related to the Mortgaged Property
which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan is subject to a prepayment
penalty as provided in the related Mortgage Note and set forth on the related
Mortgage Loan Schedule. Such prepayment penalty is in an amount equal to the
lesser of (a) the maximum amount permitted under applicable state law, and (b)
if the Mortgaged Property is secured by residential real property located in a
state other than Arizona, Maine, Massachusetts, New York, South Carolina or
Wisconsin, six months interest on the related prepaid amount. No such prepayment
penalty may be imposed for a term in excess of (y) with respect to Mortgage
Loans originated prior to October 1, 2002, five (5) years from the date of
origination and (z) with respect to Mortgage Loans originated on or after
October 1, 2002, three (3) years from the date of origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost Loan
or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection with the
origination of the Mortgage Loan, no proceeds from such Mortgage Loan were used
to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(ddd) [Reserved];
(eee) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, 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 (three of the
credit repositories), on a monthly basis;
(fff) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each Mortgage
Loan is in compliance with the anti-predatory lending eligibility for purchase
requirements of Xxxxxx Mae Guides;
(ggg) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the Originator which is a higher cost
product designed for less creditworthy mortgagors, unless at the time of the
Mortgage Loan's origination, such Mortgagor did not qualify taking into account
credit history and debt to income ratios for a lower cost credit product then
offered by the Originator or any Affiliate of the Originator. If, at the time of
loan application, the Mortgagor may have qualified for a lower cost credit
product then offered by any mortgage lending Affiliate of the Originator, the
Originator referred the related Mortgagor's application to such Affiliate for
underwriting consideration;
(hhh) Underwriting Methodology. The methodology used in underwriting the
extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(iii) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, disability, property,
accident, unemployment or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single premium credit insurance policy (e.g., life,
disability, property, accident, unemployment, mortgage or health insurance) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage Loan
were disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation. Except in the case of a Mortgage Loan in an
original principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no Mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae Guides;
(lll) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July 1, 2004
requires the related Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties set
forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage Loans
to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
Seller of any such breach of a representation or warranty, which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (zz)(y), (zz)(z), (aaa), (bbb), (ccc), (eee),
(fff), (ggg), (hhh), (iii), (jjj), (kkk), (lll) and (mmm) of Subsection 9.02,
the Seller shall repurchase such Mortgage Loan at the Repurchase Price. In the
event that a breach shall involve any representation or warranty set forth in
Subsection 9.01, and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Seller of such breach, all of the
Mortgage Loans affected by such breach shall, at the Purchaser's option, be
repurchased by the Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 9.02 (except as
provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the Seller discovers or
receives notice of any such breach within 120 days of the related Closing Date,
the Seller shall, at the Purchaser's option and provided that the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after the
related Closing Date. If the Seller has no Qualified Substitute Mortgage Loan,
it shall repurchase the deficient Mortgage Loan at the Repurchase Price. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Subsection 9.03 shall be accomplished by either (a) if the Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price for distribution to the Purchaser
on the next scheduled Remittance Date, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Custodial Account for future distribution or (b) if the Servicing Agreement
has not been entered into or is no longer in effect, by direct remittance of the
Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the Seller
shall arrange for the reassignment of the Deleted Mortgage Loan to the Seller
and the delivery to the Seller of any documents held by the Custodian relating
to the Deleted Mortgage Loan. In the event of a repurchase or substitution, the
Seller shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, amend the
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect
the addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing for
such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Originator to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the Seller
shall indemnify the Purchaser and the Successor Servicer and hold such parties
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and the Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and the Successor
Servicer respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of the
breach of any representations and warranties made in Subsections 9.01 and 9.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by the
Seller to cure such breach or repurchase such Mortgage Loan as specified above,
and (iii) demand upon the Seller by the Purchaser for compliance with this
Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults.
If the related Mortgagor is delinquent with respect to the Mortgage Loan's
first Monthly Payment either (i) after origination of such Mortgage Loan, or
(ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
percentage of par as stated in the related Purchase Price and Terms Agreement
(subject to adjustment as provided therein) multiplied by the then outstanding
principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon from the date to which interest was last paid through the day prior to
the repurchase date at the applicable Mortgage Interest Rate, plus any
outstanding advances owed to any servicer in connection with such Mortgage Loan.
A Mortgage Loan's first Monthly Payment after the related Closing Date shall be
considered "delinquent" if such Monthly Payment has not been received by the
Purchaser by the fifteenth (15th) day of the month following the month in which
the Monthly Payment was due. The Purchaser shall have ninety (90) days following
any such delinquency to notify the Seller of any repurchase request and the
Seller shall repurchase such delinquent Mortgage Loan within thirty (30) days of
the date of such request.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the event
that any such Mortgage Loan prepays in full either (i) on or before a
Securitization Transaction or (ii) during the first six months following the
related Closing Date, the Seller shall pay the Purchaser, within three (3)
Business Days of such prepayment in full, the difference between the Purchase
Price for such Mortgage Loan and the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package shall
take place on the related Closing Date. At the Purchaser's option, each Closing
shall be either: by telephone, confirmed by letter or wire as the parties shall
agree, or conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing Date
shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date, the
Seller shall deliver to the Purchaser a magnetic diskette, or
transmit by modem, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans
delivered on such Closing Date (including accrued interest), and
prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under this
Agreement and of the Originator under the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein) shall be true
and correct as of the related Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute
a default under this Agreement or an Event of Default under the
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents as specified in
Section 11 of this Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other
than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian all
documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller
on the related Closing Date the Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the initial
Closing Date);
2. the related Mortgage Loan Schedule (one copy to be attached to the
Custodian's counterpart of the Custodial Agreement in connection
with the initial Closing Date, and one copy to be attached to the
related Assignment and Conveyance as the Mortgage Loan Schedule
thereto);
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial Agreement;
4. with respect to the initial Closing Date, an Officer's Certificate,
in the form of Exhibit C hereto with respect to each of the Seller
and the Originator, including all attachments thereto; with respect
to subsequent Closing Dates, an Officer's Certificate upon request
of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of Counsel of
the Seller (who may be an employee of the Seller), in the form of
Exhibit D hereto ("Opinion of Counsel of the Seller"); with respect
to subsequent Closing Dates, an Opinion of Counsel of the Seller
upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of Counsel of
the Custodian (who may be an employee of the Custodian), in the form
of an exhibit to the Custodial Agreement;
7. a Security Release Certification, in the form of Exhibit E or F, as
applicable, hereto executed by any person, as requested by the
Purchaser, if any of the Mortgage Loans have at any time been
subject to any security interest, pledge or hypothecation for the
benefit of such person;
8. a certificate or other evidence of merger or change of name, signed
or stamped by the applicable regulatory authority, if any of the
Mortgage Loans were acquired by the Seller by merger or acquired or
originated by the Seller while conducting business under a name
other than its present name, if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G; and
10. Assignment and Conveyance Agreement in the form of Exhibit H hereto,
and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents until such
time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the legal
fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all of the
Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program (Special
Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of one or
more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer, any
and all pool purchase contracts, and/or agreements reasonably acceptable to the
Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the case
may be) and any servicer in connection with a Whole Loan Transfer, a seller's
warranties and servicing agreement or a participation and servicing agreement in
form and substance reasonably acceptable to the Seller, and in connection with a
Securitization Transaction, a pooling and servicing agreement in form and
substance reasonably acceptable to the Seller (collectively the agreements
referred to herein are designated, the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement and the
Servicing Agreement as of the settlement or closing date in connection with such
Reconstitution that occurs on or prior to the date which is six (6) months
following the related Closing Date and in connection with any Reconstitution on
or after the date which is six (6) months following the related Closing Date, to
restate the representations and warranties set forth in this Agreement as of the
Closing Date (each, a "Reconstitution Date") or make the representations and
warranties set forth in the related selling/servicing guide of the master
servicer or issuer, as the case may be, in connection with such Reconstitution.
The Seller shall use its reasonable best efforts to provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Originator as are reasonably believed necessary by the Purchaser or any such
other participant; and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate designated
by the Purchaser and each Person who controls the Purchaser or such Affiliate
and hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may sustain
in any way related to any information provided by or on behalf of the Seller or
the Originator regarding the Seller, the Originator, the Seller's or other
originator's Static Pool Information, the Seller's and Originator's servicing
practices or performance, the Mortgage Loans or the Underwriting Guidelines set
forth in any offering document prepared in connection with any Reconstitution.
For purposes of the previous sentence, "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement. Moreover, the Seller agrees
to cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a Reconstitution
shall remain subject to this Agreement and, if the Servicing Agreement shall
remain in effect with respect to the related Mortgage Loan Package, shall
continue to be serviced in accordance with the terms of this Agreement and the
Servicing Agreement and with respect thereto this Agreement shall remain in full
force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third Party
Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer and
hold such parties 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 such parties may
sustain in any way related to the failure of the Seller to perform its duties
and the Originator to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13. The Seller immediately shall notify the Purchaser if a claim is made
by a third party with respect to this Agreement or any Reconstitution Agreement
or the Mortgage Loans, assume (with the prior written consent of the Purchaser)
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 the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Originator or the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation except as
permitted herein, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's marketing
of the Mortgage Loans, the Purchaser shall make available to prospective
purchasers audited financial statements of the Seller for the most recently
completed three fiscal years respecting which such statements are available, as
well as a Consolidated Statement of Condition of the Seller at the end of the
last two fiscal years covered by such Consolidated Statement of Operations. The
Seller shall also make available any comparable interim statements to the extent
any such statements have been prepared by the Seller (and are available upon
request to members or stockholders of the Seller or the public at large). The
Seller, if it has not already done so, agrees to furnish promptly to the
Purchaser copies of the statements specified above. The Seller shall also make
available information on its servicing performance with respect to loans
serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage Loans
described on the related Mortgage Loan Schedule is mandatory from and after the
date of the execution of the related Purchase Price and Terms Agreement, it
being specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans or (iii)
one or more Mortgage Loans otherwise acceptable to the Purchaser on or before
the related Closing Date. The Seller hereby grants to the Purchaser a lien on
and a continuing security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligations under the related Purchase Price and Terms Agreement,
and the Seller agrees that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (a) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (b) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, by registered or certified
mail, return receipt requested, or, if by other means, when received by the
other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx - Whole Loan Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx - RFPG
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed counterpart
thereof is received by the Purchaser in the State of New York and shall be
deemed to have been made in the State of New York. The Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing, and
the Seller is selling the Mortgage Loans and not a debt instrument of the Seller
or another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Seller and the Purchaser and the respective permitted successors and
assigns of the Seller and the successors and assigns of the Purchaser. This
Agreement shall not be assigned, pledged or hypothecated by the Seller to a
third party without the consent of the Purchaser. This Agreement may be
assigned, pledged or hypothecated by the Purchaser without the consent of the
Seller. In the event the Purchaser assigns this Agreement, and the assignee
assumes any of the Purchaser's obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN NOTIFIED;
AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN
ANY OTHER JURISDICTION.
SECTION 32. Compliance With Regulation AB.
Subsection 32.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose of
Section 32 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate fully
with the Purchaser to deliver to the Purchaser (including any of its assignees
or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Seller, any Third-Party Originator and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Purchaser or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller by providing timely notice of requests for information
under these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
Subsection 32.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to any
Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 32.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Interim Servicer has
not been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Interim Servicer as servicer has been disclosed or reported by the
Seller; (iv) no material changes to the Interim Servicer's policies or
procedures with respect to the servicing function it will perform under the
Interim Servicing Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Interim Servicer's financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 32.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 32.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall (i)
within five Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller shall
provide such information regarding (i) the Seller, as originator of the Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the originator's
origination portfolio; and information that may be material, in the good
faith judgment of the Purchaser or any Depositor, to an analysis of the
performance of the Mortgage Loans, including the originators'
credit-granting or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of compliance with
Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller and each
Third-Party Originator; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator and any of the following parties to a
Securitization Transaction, as such parties are identified to the Seller
by the Purchaser or any Depositor in writing in advance of such
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide) Static
Pool Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared in form and substance reasonably satisfactory to the Purchaser by the
Seller (or Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To
the extent that there is reasonably available to the Seller (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage loan
type, the Purchaser or any Depositor shall be entitled to specify whether some
or all of such information shall be provided pursuant to this paragraph. Such
Static Pool Information for each vintage origination year or prior securitized
pool, as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to the date of the prospectus
or other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static Pool
Information provided pursuant to the immediately preceding paragraph (including
an omission to include therein information required to be provided pursuant to
such paragraph), the Seller shall provide corrected Static Pool Information to
the Purchaser or any Depositor, as applicable, in the same format in which
Static Pool Information was previously provided to such party by the Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) [Reserved].
(d) If so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Seller shall (or shall cause each
Third-Party Originator to) (i) notify the Purchaser and any Depositor in writing
of (A) any material litigation or governmental proceedings pending against the
Seller or any Third-Party Originator and (B) any affiliations or relationships
that develop following the closing date of a Securitization Transaction between
the Seller or any Third-Party Originator and any of the parties specified in
clause (D) of paragraph (a) of this Section (and any other parties identified in
writing by the requesting party) with respect to such Securitization
Transaction, and (ii) provide to the Purchaser and any Depositor a description
of such proceedings, affiliations or relationships.
Subsection 32.04 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction; each broker dealer acting
as underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(1) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form under this
Section 32 by or on behalf of the Seller, or provided under this Section
32 by or on behalf of any Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission to state in
the Seller Information a material fact required to be stated in the Seller
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Seller Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Seller Information or any
portion thereof is presented together with or separately from such other
information;
(2) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or
other material when and as required under this Section 32; or
(3) any breach by the Seller of a representation or warranty set
forth in Subsection 32.02(a) or in a writing furnished pursuant to
Subsection 32.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(2) of
this Section, the Seller shall promptly reimburse the Purchaser, any Depositor,
as applicable, and each Person responsible for the preparation, execution or
filing of any report required to be filed with the Commission with respect to
such Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such party
in order to obtain the information, report, certification, accountants' letter
or other material not delivered as required by the Seller or any Third-Party
Originator.
(b) Any failure by the Seller or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material when
and as required under this Section 32, or any breach by the Seller of a
representation or warranty set forth in Subsection 32.02(a) or in a writing
furnished pursuant to Subsection 32.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:__________________________________
Title:_________________________________
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Purchaser
and any prospective Purchaser, and which shall be delivered to the Custodian, or
to such other Person as the Purchaser shall designate in writing, pursuant to
Section 6 of the Third Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(c) (a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(d) the original of any guarantee executed in connection with the Mortgage
Note;
(e) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(f) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(g) the original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording. The Assignment of Mortgage must be duly
recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(h) the originals of all intervening assignments of mortgage (if any)
evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(i) the original mortgagee policy of title insurance or, in the event such
original title policy is unavailable, a certified true copy of the related
policy binder or commitment for title certified to be true and complete by the
title insurance company;
(j) the original or, if unavailable, a copy of any security agreement,
chattel mortgage or equivalent document executed in connection with the
Mortgage; and
(k) if any of the above documents has been executed by a person holding a
power of attorney, an original or photocopy of such power certified by the
Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to the
Purchaser because of a delay caused by the public recording office in returning
any recorded document, the Seller shall deliver to the Purchaser, within 90 days
of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. An extension of the date specified in clause (iv) above may be
requested from the Purchaser, which consent shall not be unreasonably withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected [Vice]
President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Third Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of
_______ __, 200_, by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company (the "Purchase Agreement") and (b) the
Amended and Restated Interim Servicing Agreement, dated as of _______ __,
200_, by and between the Purchaser and New Century Mortgage Corporation
(the "Servicing Agreement"), [and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification since
____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated by
the agreements; or (ii) any required consent, approval, authorization or
order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement or the Servicing
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company or, to the best of my knowledge, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement or the Servicing Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement or the Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement or (c) any other document delivered
or on the date hereof in connection with any purchase described in the
agreements set forth above was, at the respective times of such signing
and delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the office set
forth opposite his or her name on Exhibit 5, and the signatures of such
persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Servicing
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General Counsel to
___________________ (the "Company"), with respect to certain matters in
connection with the sale by the Company of the Mortgage Loans pursuant to that
certain Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement") and
the Amended and Restated Interim Servicing Agreement, by and between the
Purchaser and New Century Mortgage Corporation (the "Originator"), dated as of
_________ __, 200_ (the "Servicing Agreement", and together with the Purchase
Agreement, the "Agreements"). which sale is in the form of whole loans.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Agreements;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed necessary
and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I] have
relied upon the representations and warranties of the Company and the Originator
contained in the Agreements. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Originator are [type of entity] duly organized,
validly existing and in good standing under the laws of the [United
States] and are qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. Each of the Company and the Originator has the power to engage in
the transactions contemplated by the Agreements and all requisite
power, authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions of
the Agreements.
3. Each Agreement has been duly authorized, executed and delivered by
the Company and the Originator, as applicable, and is a legal, valid
and binding agreement enforceable in accordance with its terms
against the Company and the Originator, as applicable, subject to
bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the
rules of equity, including those respecting the availability of
specific performance, none of which will materially interfere with
the realization of the benefits provided thereunder or with the
Purchaser's ownership of the Mortgage Loans.
4. Each of the Company and the Originator has been duly authorized to
allow any of its officers to execute any and all documents by
original signature in order to complete the transactions
contemplated by the Agreements.
[5. The Company has been duly authorized to allow any of its officers to
execute by original [or facsimile] signature the endorsements to the
Mortgage Notes and the Assignments of Mortgages, and the original
[or facsimile] signature of the officer at the Company executing the
endorsements to the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of the
Company].
6. Either (i) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Company or the Originator of or
compliance by the Company or the Originator with the Agreements and
the sale of the Mortgage Loans by the Company or the consummation of
the transactions contemplated by the Agreements or (ii) any required
consent, approval, authorization or order has been obtained by the
Company or the Originator.
7. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of, the Agreements conflicts or will
conflict with or results or will result in a breach of or
constitutes or will constitute a default under the charter or
by-laws of the Company or the Originator, as applicable, or, to the
best of my knowledge, the material terms of any indenture or other
agreement or instrument to which the Company or the Originator is a
party or by which it is bound or to which it is subject, or violates
any statute or order, rule, regulations, writ, injunction or decree
of any court, governmental authority or regulatory body to which the
Company or the Originator is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to
the best of [our] [my] knowledge, threatened against the Company or
the Originator which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties
or assets of the Company or the Originator or in any material
impairment of the right or ability of the Company or the Originator
to carry on its business substantially as now conducted or in any
material liability on the part of the Company or the Originator or
which would draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely
to impair materially the ability of the Company or the Originator to
perform under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement, is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes have
been duly endorsed as provided in the Custodial Agreement. The
Assignments of Mortgage are in recordable form, except for the
insertion of the name of the assignee, and upon the name of the
assignee being inserted, are acceptable for recording under the laws
of the state where each related Mortgaged Property is located. The
endorsement of the Mortgage Notes, the delivery to the Purchaser, or
its designee, of the Assignments of Mortgage, and the delivery of
the original endorsed Mortgage Notes to the Purchaser, or its
designee, are sufficient to permit the Purchaser to avail itself of
all protection available under applicable law against the claims of
any present or future creditors of the Company, and are sufficient
to prevent any other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by the Company
from being enforceable.
Except as otherwise set forth in the Agreements, I assume no obligation to
revise this opinion or alter its conclusions to update or support this letter to
reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of the date of this opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
____________________________
____________________________
____________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY] a
[type of entity], organized pursuant to the laws of [the State of incorporation]
(the "Company") has committed to sell to Xxxxxx Xxxxxxx Mortgage Capital Inc.
under the Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, certain mortgage loans originated by the
Association. The Company warrants that the mortgage loans to be sold to Xxxxxx
Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to Xxxxxx
Xxxxxxx Mortgage Capital Inc. shall not be used as additional or substitute
collateral for advances made by the Association. Xxxxxx Xxxxxxx Mortgage Capital
Inc. understands that the balance of the Company's mortgage loan portfolio may
be used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full and
complete release of any security interest, claim, or lien which the Association
may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage
Capital Inc.
Very truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and all
right, title, interest, lien or claim of any kind it may have in all mortgage
loans described on the attached Schedule A (the "Mortgage Loans"), to be
purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on the
next page (the "Company") pursuant to that certain Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __, 200_,
and certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Company or its designees, as of the date and time of the sale of such
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall be
effective automatically without any further action by any party upon payment in
one or more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name and Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ NC Capital
Corporation ("Seller"), as the Seller under (i) that certain Purchase Price and
Terms Agreement, dated as of ___________, _____ (the "PPTA"), and (ii) that
certain Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of December 1, 2005 (the "Purchase Agreement"), does hereby
sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital
Inc. ("Purchaser") as the Purchaser under the Agreements (as defined below),
without recourse, but subject to the terms of the Agreements, all right, title
and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A (the "Mortgage Loans"), together with the
Servicing Rights, and the Mortgage Files and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the documents
for each Mortgage Loan to be purchased as set forth in the Purchase Agreement.
The contents of each Servicing File required to be retained by New Century
Mortgage Corporation ("Servicer"), as Originator/Servicer under that certain
Amended and Restated Interim Servicing Agreement, dated as of December 1, 2005
(the "Servicing Agreement") to service the Mortgage Loans pursuant to the
Servicing Agreement and thus not delivered to the Purchaser are and shall be
held in trust by the Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer's possession of any portion of the Servicing File is at
the will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Servicing Agreement, and such retention
and possession by the Servicer shall be in a custodial capacity only. The
ownership of each Mortgage Note, Mortgage, the Servicing Rights and the contents
of the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Seller or the Servicer
shall immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in such custodial capacity
only. The PPTA, the Purchase Agreement and the Servicing Agreement shall
collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans subject
hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the Purchaser
accepts the Mortgage Loans listed on Exhibit A attached hereto. Notwithstanding
the foregoing the Purchaser does not waive any rights or remedies it may have
under the Agreements.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:____________________________________
Name:__________________________________
Title:_________________________________
[SERVICER]
By:____________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the
related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than __ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Adjustable Rate Mortgage Loan has an Index of
[_______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT V
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO XXXxx.Xxxxxxxxxxxxx@xx.xxx AND VIA OVERNIGHT MAIL TO THE
ADDRESS IMMEDIATELY BELOW
Deutsche Bank National Trust Company, as trustee
0000 Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Email: XXXxx.Xxxxxxxxxxxxx@xx.xxx
Attn.: Trust & Securities Services
RE: **Additional Form [10-D] [10-K] [8-K] Disclosure** Required
Ladies and Gentlemen:
In accordance with Section 8.12 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of March 1, 2006, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as depositor, HomEq Servicing Corporation, as servicer, JPMorgan Chase
Bank, National Association, as servicer, First NLC Financial Services, LLC, as
responsible party, and Deutsche Bank National Trust Company, as trustee, the
undersigned, as [_________________________] hereby notifies you that certain
events have come to our attention that we are required to report to you for
disclosure on Form [10-D] [10-K] [8-K].
Description of additional Form [10-D] [10-K] [8-K] Disclosure:
List of any attachments hereto to be included in the Additional Form [10-D]
[10-K] [8-K] Disclosure:
Each of the attachments hereto is being transmitted to the Trustee in an
XXXXX-compatible format.
Any inquiries related to this notification should be directed to
[_________________] phone number [___________________]; email address
[______________________].
[NAME OF PARTY],
As [Role]
By:________________________________
Name:
