Exhibit 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
LASALLE BANK NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
INDYMAC BANK, F.S.B.,
Servicer
WILSHIRE CREDIT CORPORATION,
Servicer
and
CITIBANK, N.A.,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-HE5
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.................................................... 11
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.. 60
SECTION 2.01. Conveyance of Mortgage Loans........................... 60
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans........ 62
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.............................................. 64
SECTION 2.04. Representations and Warranties of the Master Servicer;
the Servicers; the Securities Administrator;........... 69
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that
are not "Qualified Mortgages".......................... 73
SECTION 2.06. Authentication and Delivery of Certificates............ 73
SECTION 2.07. REMIC Elections........................................ 73
SECTION 2.08. Covenants of the Servicers............................. 79
SECTION 2.09. Permitted Activities of the Trust...................... 79
SECTION 2.10. Qualifying Special Purpose Entity...................... 79
SECTION 2.11. Depositor Notification of NIM Notes.................... 79
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 79
SECTION 3.01. Servicers to Service Mortgage Loans.................... 79
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of the Servicers........................... 81
SECTION 3.03. Rights of the Depositor, the Securities Administrator,
the Master Servicer and the Trustee in Respect of the
Servicers.............................................. 82
SECTION 3.04. Master Servicer to Act as Servicer..................... 82
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Accounts; Master Servicer Collection Account;
Certificate Account.................................... 83
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts........................................ 87
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans........................... 88
SECTION 3.08. Permitted Withdrawals from the Collection Accounts,
Master Servicer Collection Account and Certificate
Account................................................ 88
SECTION 3.09. [RESERVED]............................................. 91
SECTION 3.10. Maintenance of Hazard Insurance........................ 91
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements............................................. 92
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds; Special Loss
Mitigation............................................. 92
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TABLE OF CONTENTS
(continued)
PAGE
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SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files........ 95
SECTION 3.14. Documents, Records and Funds in Possession of Servicers
to be Held for the Trustee............................. 97
SECTION 3.15. Servicing Compensation................................. 97
SECTION 3.16. Access to Certain Documentation........................ 98
SECTION 3.17. Annual Statement as to Compliance...................... 98
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements........................ 98
SECTION 3.19. Rights of the NIMs Insurer............................. 101
SECTION 3.20. Periodic Filings....................................... 102
SECTION 3.21. Indemnification by Securities Administrator............ 105
SECTION 3.22. Indemnification by Servicers........................... 106
SECTION 3.23. Prepayment Charge Reporting Requirements............... 106
SECTION 3.24. Information to the Master Servicer..................... 106
SECTION 3.25. Indemnification........................................ 106
SECTION 3.26. Nonsolicitation........................................ 108
SECTION 3.27. High Cost Mortgage Loans............................... 108
SECTION 3.28. Special Servicing Agreements........................... 109
SECTION 3.29. Subordination of Liens................................. 109
ARTICLE IV DISTRIBUTIONS................................................. 109
SECTION 4.01. Advances............................................... 109
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls......................... 110
SECTION 4.03. Distributions on the REMIC Interests................... 110
SECTION 4.04. Distributions.......................................... 111
SECTION 4.05. Monthly Statements to Certificateholders............... 119
ARTICLE V THE CERTIFICATES............................................... 123
SECTION 5.01. The Certificates....................................... 123
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates............................... 125
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...... 129
SECTION 5.04. Persons Deemed Owners.................................. 129
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.............................................. 129
SECTION 5.06. Book-Entry Certificates................................ 130
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TABLE OF CONTENTS
(continued)
PAGE
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SECTION 5.07. Notices to Depository.................................. 131
SECTION 5.08. Definitive Certificates................................ 131
SECTION 5.09. Maintenance of Office or Agency........................ 131
SECTION 5.10. Authenticating Agents.................................. 132
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SERVICERS AND THE
SECURITIES ADMINISTRATOR...................................... 132
SECTION 6.01. Respective Liabilities of the Depositor, the Master
Servicer, the Servicers and the Securities
Administrator.......................................... 132
SECTION 6.02. Merger or Consolidation of the Depositor, the Master
Servicer, the Servicers or the Securities
Administrator.......................................... 133
SECTION 6.03. Limitation on Liability of the Depositor, the
Securities Administrator, the Master Servicer, the
Servicers and Others................................... 133
SECTION 6.04. Limitation on Resignation of a Servicer................ 134
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds......... 135
SECTION 6.06. Limitation on Resignation of the Master Servicer....... 135
SECTION 6.07. Assignment of Master Servicing......................... 136
ARTICLE VII DEFAULT; TERMINATION OF SERVICER............................. 136
SECTION 7.01. Events of Default...................................... 136
SECTION 7.02. Master Servicer to Act; Appointment of Successor....... 138
SECTION 7.03. Notification to Certificateholders..................... 139
ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR..... 139
SECTION 8.01. Duties of the Trustee and the Securities
Administrator.......................................... 139
SECTION 8.02. Certain Matters Affecting the Trustee and the
Securities Administrator............................... 140
SECTION 8.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans......................... 142
SECTION 8.04. Trustee and Securities Administrator May Own
Certificates........................................... 142
SECTION 8.05. Trustee's and Securities Administrator's Fees and
Expenses............................................... 142
SECTION 8.06. Indemnification and Expenses of Trustee................ 143
SECTION 8.07. Eligibility Requirements for Trustee................... 144
SECTION 8.08. Resignation and Removal of Trustee..................... 144
SECTION 8.09. Successor Trustee...................................... 145
SECTION 8.10. Merger or Consolidation of Trustee..................... 145
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.......... 146
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TABLE OF CONTENTS
(continued)
PAGE
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SECTION 8.12. Tax Matters............................................ 147
ARTICLE IX TERMINATION................................................... 149
SECTION 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans......................................... 149
SECTION 9.02. Final Distribution on the Certificates................. 151
SECTION 9.03. Additional Termination Requirements.................... 152
ARTICLE X MISCELLANEOUS PROVISIONS....................................... 153
SECTION 10.01. Amendment.............................................. 153
SECTION 10.02. Counterparts........................................... 155
SECTION 10.03. Governing Law.......................................... 155
SECTION 10.04. Intention of Parties................................... 155
SECTION 10.05. Notices................................................ 156
SECTION 10.06. Severability of Provisions............................. 157
SECTION 10.07. Assignment............................................. 157
SECTION 10.08. Limitation on Rights of Certificateholders............. 158
SECTION 10.09. Inspection and Audit Rights............................ 159
SECTION 10.10. Certificates Nonassessable and Fully Paid.............. 159
SECTION 10.11. Compliance with Regulation AB.......................... 159
SECTION 10.12. Third Party Rights..................................... 159
SECTION 10.13. Additional Rights of the NIMs Insurer.................. 160
ARTICLE XI ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS..... 160
SECTION 11.01. Master Servicer........................................ 160
SECTION 11.02. Monitoring of Servicers................................ 161
SECTION 11.03. Fidelity Bond.......................................... 162
SECTION 11.04. Power to Act; Procedures............................... 162
SECTION 11.05. Documents, Records and Funds in Possession of Master
Servicer to Be Held for Trustee........................ 163
SECTION 11.06. Trustee to Retain Possession of Certain Insurance
Policies and Documents................................. 164
SECTION 11.07. Compensation for the Master Servicer and the Securities
Administrator.......................................... 164
SECTION 11.08. Annual Statement as to Compliance...................... 164
-iv-
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF INITIAL CERTIFICATION
EXHIBIT E-1 FORM OF CLASS R TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF CLASS R TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT M-2 FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT M-3 FORM OF SUBORDINATE CERTIFICATES CAP CONTRACT
EXHIBIT N-1 ONE-MONTH LIBOR CAP TABLE -- CLASS A-1 CAP CONTRACT
EXHIBIT N-2 ONE-MONTH LIBOR CAP TABLE -- CLASS A-2 CAP CONTRACT
EXHIBIT N-3 ONE-MONTH LIBOR CAP TABLE -- SUBORDINATE CERTIFICATES CAP
CONTRACT
EXHIBIT O FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER TO
REGULATION S BOOK-ENTRY CERTIFICATE FROM A HOLDER OF A RULE 144A
BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
EXHIBIT P FORM OF TRANSFEROR REPRESENTATION LETTER FOR TRANSFER PURSUANT TO
RULE 144A FROM A HOLDER OF A REGULATION S BOOK-ENTRY CERTIFICATE
OR DEFINITIVE CERTIFICATE
EXHIBIT Q FORM OF SWAP AGREEMENT
EXHIBIT R FORM OF ASSESSMENT OF COMPLIANCE
EXHIBIT S SERVICING CRITERIA TO BE ADDRESSED
EXHIBIT T FORM OF XXXXXXXX-XXXXX CERTIFICATION
EXHIBIT U FORM OF ITEM 1123 CERTIFICATION OF SERVICER
SCHEDULE X
SCHEDULE Y
SCHEDULE Z
-v-
POOLING AND SERVICING AGREEMENT, (the "Agreement") dated as of September 1,
2006, among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), LASALLE BANK NATIONAL ASSOCIATION, a national
banking association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), INDYMAC BANK, F.S.B., a national
savings bank, as a servicer ("IndyMac"), WILSHIRE CREDIT CORPORATION, a Nevada
corporation, as a servicer (("Wilshire") and together with IndyMac, each a
("Servicer") and together, the ("Servicers")), and CITIBANK, N.A., a national
banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. The Trust Fund for federal income tax
purposes will consist of (i) three real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and the Cap
Contract Account, (iv) the grantor trusts described in Section 2.07 hereof and
(v) the Supplemental Interest Trust, which in turn will hold the Swap Agreement.
The SWAP REMIC will consist of all of the assets constituting the Trust Fund
(other than the assets described in clauses (ii), (iii), (iv) and (v) above,
other than the SWAP REMIC Regular Interests and other than the Lower Tier REMIC
Regular Interests) and will be evidenced by the SWAP REMIC Regular Interests
(which will be uncertificated and will represent the "regular interests" in the
SWAP REMIC) and the Class SWR Interest as the single "residual interest" in the
SWAP REMIC. The Lower Tier REMIC will consist of SWAP REMIC Regular Interests
and will be evidenced by the Lower Tier REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular Interests (which will represent the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in the Upper Tier REMIC. The Class R Certificate will
represent beneficial ownership of the Class SWR Interest, the Class LTR Interest
and the Residual Interest. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest Possible
Maturity Date.
All covenants and agreements made by the Sponsor in the Sale Agreement and
by the Depositor and the Trustee herein with respect to the Mortgage Loans and
the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates and, to the extent provided
herein, the NIMs Insurer.
THE SWAP REMIC
The following table sets forth the designations, initial principal balances and
interest rates for each interest in the SWAP REMIC:
Class Initial Principal Balance Interest Rate
----- ------------------------- -------------
1-SW1 $ 36,062,479.170 (1)
1-SW1A $ 3,592,195.968 (2)
1-SW1B $ 3,592,195.968 (3)
1-SW2A $ 3,888,097.411 (2)
1-SW2B $ 3,888,097.411 (3)
1-SW3A $ 4,382,224.467 (2)
1-SW3B $ 4,382,224.467 (3)
1-SW4A $ 4,616,407.312 (2)
1-SW4B $ 4,616,407.312 (3)
1-SW5A $ 4,466,578.010 (2)
1-SW5B $ 4,466,578.010 (3)
1-SW6A $ 4,122,434.512 (2)
1-SW6B $ 4,122,434.512 (3)
1-SW7A $ 3,887,739.951 (2)
1-SW7B $ 3,887,739.951 (3)
1-SW8A $ 3,628,025.902 (2)
1-SW8B $ 3,628,025.902 (3)
1-SW9A $ 3,370,710.032 (2)
1-SW9B $ 3,370,710.032 (3)
1-SW10A $ 3,120,553.464 (2)
1-SW10B $ 3,120,553.464 (3)
1-SW11A $ 2,914,680.479 (2)
1-SW11B $ 2,914,680.479 (3)
1-SW12A $ 2,768,529.357 (2)
1-SW12B $ 2,768,529.357 (3)
1-SW13A $ 2,710,585.575 (2)
1-SW13B $ 2,710,585.575 (3)
1-SW14A $ 2,762,821.495 (2)
1-SW14B $ 2,762,821.495 (3)
1-SW15A $ 3,065,704.338 (2)
1-SW15B $ 3,065,704.338 (3)
1-SW16A $ 3,526,051.400 (2)
1-SW16B $ 3,526,051.400 (3)
1-SW17A $ 3,669,772.420 (2)
1-SW17B $ 3,669,772.420 (3)
1-SW18A $ 3,122,128.025 (2)
1-SW18B $ 3,122,128.025 (3)
1-SW19A $ 2,496,295.751 (2)
1-SW19B $ 2,496,295.751 (3)
1-SW20A $ 2,063,577.600 (2)
1-SW20B $ 2,063,577.600 (3)
1-SW21A $ 1,760,710.127 (2)
1-SW21B $ 1,760,710.127 (3)
1-SW22A $ 989,858.940 (2)
1-SW22B $ 989,858.940 (3)
1-SW23A $ 481,584.167 (2)
1-SW23B $ 481,584.167 (3)
1-SW24A $ 1,124,552.482 (2)
1-SW24B $ 1,124,552.482 (3)
1-SW25A $ 1,113,749.919 (2)
1-SW25B $ 1,113,749.919 (3)
1-SW26A $ 1,478,648.521 (2)
1-SW26B $ 1,478,648.521 (3)
1-SW27A $ 1,428,871.158 (2)
-2-
1-SW27B $ 1,428,871.158 (3)
1-SW28A $ 1,283,017.592 (2)
1-SW28B $ 1,283,017.592 (3)
1-SW29A $ 931,537.361 (2)
1-SW29B $ 931,537.361 (3)
1-SW30A $ 792,317.429 (2)
1-SW30B $ 792,317.429 (3)
1-SW31A $ 693,672.317 (2)
1-SW31B $ 693,672.317 (3)
1-SW32A $ 628,050.343 (2)
1-SW32B $ 628,050.343 (3)
1-SW33A $ 571,920.112 (2)
1-SW33B $ 571,920.112 (3)
1-SW34A $ 520,375.073 (2)
1-SW34B $ 520,375.073 (3)
1-SW35A $ 473,587.768 (2)
1-SW35B $ 473,587.768 (3)
1-SW36A $ 435,331.358 (2)
1-SW36B $ 435,331.358 (3)
1-SW37A $ 402,241.300 (2)
1-SW37B $ 402,241.300 (3)
1-SW38A $ 373,336.250 (2)
1-SW38B $ 373,336.250 (3)
1-SW39A $ 347,334.948 (2)
1-SW39B $ 347,334.948 (3)
1-SW40A $ 321,610.629 (2)
1-SW40B $ 321,610.629 (3)
1-SW41A $ 297,386.067 (2)
1-SW41B $ 297,386.067 (3)
1-SW42A $ 283,414.361 (2)
1-SW42B $ 283,414.361 (3)
1-SW43A $ 5,544,740.848 (2)
1-SW43B $ 5,544,740.848 (3)
2-SW2 $192,694,640.870 (4)
2-SW1A $ 19,194,379.532 (5)
2-SW1B $ 19,194,379.532 (6)
2-SW2A $ 20,775,486.089 (5)
2-SW2B $ 20,775,486.089 (6)
2-SW3A $ 23,415,782.533 (5)
2-SW3B $ 23,415,782.533 (6)
2-SW4A $ 24,667,104.688 (5)
2-SW4B $ 24,667,104.688 (6)
2-SW5A $ 23,866,513.490 (5)
2-SW5B $ 23,866,513.490 (6)
2-SW6A $ 22,027,632.488 (5)
2-SW6B $ 22,027,632.488 (6)
2-SW7A $ 20,773,576.049 (5)
2-SW7B $ 20,773,576.049 (6)
-3-
2-SW8A $ 19,385,831.598 (5)
2-SW8B $ 19,385,831.598 (6)
2-SW9A $ 18,010,901.468 (5)
2-SW9B $ 18,010,901.468 (6)
2-SW10A $ 16,674,226.036 (5)
2-SW10B $ 16,674,226.036 (6)
2-SW11A $ 15,574,173.521 (5)
2-SW11B $ 15,574,173.521 (6)
2-SW12A $ 14,793,236.143 (5)
2-SW12B $ 14,793,236.143 (6)
2-SW13A $ 14,483,621.925 (5)
2-SW13B $ 14,483,621.925 (6)
2-SW14A $ 14,762,737.005 (5)
2-SW14B $ 14,762,737.005 (6)
2-SW15A $ 16,381,147.662 (5)
2-SW15B $ 16,381,147.662 (6)
2-SW16A $ 18,840,945.600 (5)
2-SW16B $ 18,840,945.600 (6)
2-SW17A $ 19,608,898.080 (5)
2-SW17B $ 19,608,898.080 (6)
2-SW18A $ 16,682,639.475 (5)
2-SW18B $ 16,682,639.475 (6)
2-SW19A $ 13,338,595.249 (5)
2-SW19B $ 13,338,595.249 (6)
2-SW20A $ 11,026,428.400 (5)
2-SW20B $ 11,026,428.400 (6)
2-SW21A $ 9,408,099.873 (5)
2-SW21B $ 9,408,099.873 (6)
2-SW22A $ 5,289,168.060 (5)
2-SW22B $ 5,289,168.060 (6)
2-SW23A $ 2,573,275.333 (5)
2-SW23B $ 2,573,275.333 (6)
2-SW24A $ 6,008,883.518 (5)
2-SW24B $ 6,008,883.518 (6)
2-SW25A $ 5,951,161.581 (5)
2-SW25B $ 5,951,161.581 (6)
2-SW26A $ 7,900,944.479 (5)
2-SW26B $ 7,900,944.479 (6)
2-SW27A $ 7,634,966.342 (5)
2-SW27B $ 7,634,966.342 (6)
2-SW28A $ 6,855,618.908 (5)
2-SW28B $ 6,855,618.908 (6)
2-SW29A $ 4,977,535.139 (5)
2-SW29B $ 4,977,535.139 (6)
2-SW30A $ 4,233,633.571 (5)
2-SW30B $ 4,233,633.571 (6)
2-SW31A $ 3,706,537.683 (5)
2-SW31B $ 3,706,537.683 (6)
-4-
2-SW32A $ 3,355,896.157 (5)
2-SW32B $ 3,355,896.157 (6)
2-SW33A $ 3,055,972.388 (5)
2-SW33B $ 3,055,972.388 (6)
2-SW34A $ 2,780,548.927 (5)
2-SW34B $ 2,780,548.927 (6)
2-SW35A $ 2,530,547.732 (5)
2-SW35B $ 2,530,547.732 (6)
2-SW36A $ 2,326,130.142 (5)
2-SW36B $ 2,326,130.142 (6)
2-SW37A $ 2,149,318.200 (5)
2-SW37B $ 2,149,318.200 (6)
2-SW38A $ 1,994,868.250 (5)
2-SW38B $ 1,994,868.250 (6)
2-SW39A $ 1,855,934.052 (5)
2-SW39B $ 1,855,934.052 (6)
2-SW40A $ 1,718,479.871 (5)
2-SW40B $ 1,718,479.871 (6)
2-SW41A $ 1,589,039.433 (5)
2-SW41B $ 1,589,039.433 (6)
2-SW42A $ 1,514,383.639 (5)
2-SW42B $ 1,514,383.639 (6)
2-SW43A $ 29,627,520.652 (5)
2-SW43B $ 29,627,520.652 (6)
SWR (7) (7)
(1) The interest rate on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group One Net WAC.
(2) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation
"A" shall be a per annum rate equal to 2 times the Group One Net WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for such
Distribution Date.
(3) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation
"B" shall be a per annum rate equal to the greater of (x) the excess, if
any, of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC Swap
Rate for such Distribution Date and (y) 0.00%.
(4) The interest rate on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group Two Net WAC.
(5) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation
"A" shall be a per annum rate equal to 2 times the Group Two Net WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for such
Distribution Date.
(6) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation
"B" shall be a per annum rate equal to the greater of (x) the excess, if
any, of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC Swap
Rate for such Distribution Date and (y) 0.00%.
(7) The Class SWR Interest shall have no principal amount and shall bear no
interest.
-5-
THE LOWER TIER REMIC
The following table sets forth the designations, initial principal balances,
interest rates, Corresponding Classes of Certificates and related Mortgage Group
for each interest in the Lower Tier REMIC:
Class(es) of
Corresponding
Certificates or Related
Class Initial Principal Balance Interest Rate Mortgage Group
----- ------------------------- ------------- -----------------------
LTA-1 (1) (8) A-1, R
LTA-2A (1) (8) A-2A
LTA-2B (1) (8) A-2B
LTA-2C (1) (8) A-2C
LTA-2D (1) (8) A-2D
LTM-1 (1) (8) M-1
LTM-2 (1) (8) M-2
LTM-3 (1) (8) M-3
LTM-4 (1) (8) M-4
LTM-5 (1) (8) M-5
LTM-6 (1) (8) M-6
LTB-1 (1) (8) B-1
LTB-2 (1) (8) B-2
LTB-3 (1) (8) B-3
LTIX (2) (8) N/A
LTII1A (3) (8) Group One
LTII1B (4) (9) Group One
LTII2A (5) (8) Group Two
LTII2B (6) (10) Group Two
LTIIX (7) (8) N/A
LT-IO (11) (11) N/A
LTR (12) (12) N/A
(1) The initial principal balance of each of these Lower Tier REMIC Regular
Interests shall equal 1/4 of the initial Certificate Principal Balance of
its Corresponding Certificates.
(2) The initial principal balance of the Class LTIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance of the
Mortgage Loans over (ii) the initial principal balance of the Lower Tier
REMIC I Marker Interests.
(3) The initial principal balance of the Class LTII1A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal Balance of
the Group One Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group One.
(4) The initial principal balance of the Class LTII1B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group One
Mortgage Loans.
(5) The initial principal balance of the Class LTII2A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal Balance of
the Group Two Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group Two.
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(6) The initial principal balance of the Class LTII2B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group Two
Mortgage Loans.
(7) The initial principal balance of the Class LTIIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance of the
Mortgage Loans over (ii) the initial principal balance of the Lower Tier
REMIC II Marker Interests.
(8) For each Distribution Date, the interest rate for each of the Lower Tier
REMIC Regular Interests (other than the Class LTII1B, the Class LTII2B and
the Class LT-IO Interests) shall be a per annum rate (but not less than
zero) equal to the product of (i) the weighted average of the interest
rates on the SWAP REMIC Regular Interests for such Distribution Date and
(ii) a fraction the numerator of which is 30 and the denominator of which
is the actual number of days in the Accrual Period for the LIBOR
Certificates, provided however, that for any Distribution Date on which the
Class LT-IO Interest is entitled to a portion of interest accruals on a
SWAP REMIC Regular Interest ending with a designation "A" as described in
footnote 11 below, such weighted average shall be computed by first
subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
Swap LIBOR for such Distribution Date.
(9) For each Distribution Date, the interest rate for the Class LTII1B Interest
shall be a per annum rate equal to the product of (i) the weighted average
of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "1" for such Distribution Date and (ii) a fraction the
numerator of which is 30 and the denominator of which is the actual number
of days in the Accrual Period for the LIBOR Certificates, provided,
however, that for any Distribution Date on which the Class LT-IO Interest
is entitled to a portion of interest accruals on a SWAP REMIC Regular
Interest ending with a designation "A" as described in footnote 11 below,
such weighted average shall be computed by first subjecting the rate on
such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such
Distribution Date.
(10) For each Distribution Date, the interest rate for the Class LTII2B Interest
shall be a per annum rate equal to the product of (i) the weighted average
of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "2" for such Distribution Date and (ii) a fraction the
numerator of which is 30 and the denominator of which is the actual number
of days in the Accrual Period for the LIBOR Certificates, provided,
however, that for any Distribution Date on which the Class LT-IO Interest
is entitled to a portion of interest accruals on a SWAP REMIC Regular
Interest ending with a designation "A" as described in footnote 11 below,
such weighted average shall be computed by first subjecting the rate on
such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such
Distribution Date.
(11) The Class LT-IO Interest is an interest-only class that does not have a
principal balance. For only those Distribution Dates listed in the first
column of the table below, the Class LT-IO Interest shall be entitled to
interest accrued on the SWAP REMIC Regular Interest listed in the second
column below at a per annum rate equal to the excess, if any, of (i) the
interest rate for such SWAP REMIC Regular Interest for such Distribution
Date over (ii) Swap LIBOR for such Distribution Date.
SWAP REMIC
Distribution Date Regular Interest
----------------- ----------------
7 Class 1-SW1A
Class 2-SW1A
7-8 Class 1-SW2A
Class 2-SW2A
7-9 Class 1-SW3A
Class 2-SW3A
7-10 Class 1-SW4A
Class 2-SW4A
7-11 Class 1-SW5A
Class 2-SW5A
7-12 Class 1-SW6A
Class 2-SW6A
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7-13 Class 1-SW7A
Class 2-SW7A
7-14 Class 1-SW8A
Class 2-SW8A
7-15 Class 1-SW9A
Class 2-SW9A
7-16 Class 1-SW10A
Class 2-SW10A
7-17 Class 1-SW11A
Class 2-SW11A
7-18 Class 1-SW12A
Class 2-SW12A
7-19 Class 1-SW13A
Class 2-SW13A
7-20 Class 1-SW14A
Class 2-SW14A
7-21 Class 1-SW15A
Class 2-SW15A
7-22 Class 1-SW16A
Class 2-SW16A
7-23 Class 1-SW17A
Class 2-SW17A
7-24 Class 1-SW18A
Class 2-SW18A
7-25 Class 1-SW19A
Class 2-SW19A
7-26 Class 1-SW20A
Class 2-SW20A
7-27 Class 1-SW21A
Class 2-SW21A
7-28 Class 1-SW22A
Class 2-SW22A
7-30 Class 1-SW23A
Class 2-SW23A
7-31 Class 1-SW24A
Class 2-SW24A
7-32 Class 1-SW25A
Class 2-SW25A
7-33 Class 1-SW26A
Class 2-SW26A
7-34 Class 1-SW27A
Class 2-SW27A
7-35 Class 1-SW28A
Class 2-SW28A
7-36 Class 1-SW29A
Class 2-SW29A
7-37 Class 1-SW30A
Class 2-SW30A
7-38 Class 1-SW31A
Class 2-SW31A
7-39 Class 1-SW32A
Class 2-SW32A
7-40 Class 1-SW33A
Class 2-SW33A
7-41 Class 1-SW34A
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Class 2-SW34A
7-42 Class 1-SW35A
Class 2-SW35A
7-43 Class 1-SW36A
Class 2-SW36A
7-44 Class 1-SW37A
Class 2-SW37A
7-45 Class 1-SW38A
Class 2-SW38A
7-46 Class 1-SW39A
Class 2-SW39A
7-47 Class 1-SW40A
Class 2-SW40A
7-48 Class 1-SW41A
Class 2-SW41A
7-49 Class 1-SW42A
Class 2-SW42A
7-50 Class 1-SW43A
Class 2-SW43A
(12) The Class LTR Interest shall have no principal amount and shall bear no
interest.
UPPER TIER REMIC
The following table sets forth the designation, the initial principal balances,
the interest rates and Classes of Related Certificates for each of the interests
in the Upper Tier REMIC.
Initial Principal Class of
Class Balance Rate Related Certificates
----- ----------------- ---- --------------------
UTA-1 (1) (2) A-1
UTA-2A (1) (2) A-2A
UTA-2B (1) (2) A-2B
UTA-2C (1) (2) A-2C
UTA-2D (1) (2) A-2D
UTM-1 (1) (2) M-1
UTM-2 (1) (2) M-2
UTM-3 (1) (2) M-3
UTM-4 (1) (2) M-4
UTM-5 (1) (2) M-5
UTM-6 (1) (2) M-6
UTB-1 (1) (2) B-1
UTB-2 (1) (2) B-2
UTB-3 (1) (2) B-3
Uncertificated
Class C Interest (3) (3) N/A
UT-IO (4) (4) N/A
Residual Interest (1) (2) R
(1) The initial principal balance of each of these REMIC Regular Interests
shall equal the initial principal balance of its Class of Related
Certificates.
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(2) The interest rates on each of these REMIC Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the Class of Related
Certificates, provided that in lieu of the applicable Available Funds Caps
set forth in the definition of an applicable Pass-Through Rate, the
applicable Upper Tier REMIC Net WAC Cap shall be used.
(3) The Uncertificated Class C Interest shall have an initial principal balance
equal to the initial Overcollateralization Amount. The Uncertificated Class
C Interest shall accrue interest on a notional balance set forth in the
definition of Class C Current Interest at a rate equal to the Class C
Distributable Interest Rate. The Uncertificated Class C Interest shall be
represented by the Class C Certificates.
(4) The Class UT-IO Interest shall have no principal amount and will not have
an interest rate, but will be entitled to 100% of the interest accrued with
respect to the Class LT-IO Interest. The Class UT-IO Interest shall be
represented by the Class C Certificates.
THE CERTIFICATES
The following table sets forth the Class designation, interest rate and initial
Class principal amount for each Class of Certificates comprising interests in
the Trust Fund.
Class Initial Class Principal Amount Interest Rate
----- ------------------------------ -------------
A-1 (1) (2)
A-2A (1) (2)
A-2B (1) (2)
A-2C (1) (2)
A-2D (1) (2)
M-1 (1) (2)
M-2 (1) (2)
M-3 (1) (2)
M-4 (1) (2)
M-5 (1) (2)
M-6 (1) (2)
B-1 (1) (2)
B-2 (1) (2)
B-3 (1) (2)
C (3) (3)
P (4) (4)
R (1) (2)(5)
(1) Each of these Classes of Certificates shall have initial principal balances
as set forth in Section 5.01 hereof.
(2) Each of these Classes of Certificates shall bear interest at a per annum
rate equal to the Pass-Through Rate for such Certificates set forth in the
definitions herein.
(3) For federal income tax purposes, the Class C Certificate shall represent
(i) the right to receive all distributions with respect to the REMIC
Regular Interests represented by the Uncertificated Class C Interest and
the Class UT-IO Interest and (ii) certain rights and obligations with
respect to notional principal contracts as described in Section 2.07.
(4) The Class P Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC regular
interest.
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(5) The Class R Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Servicers and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent master servicing institutions that master service mortgage loans of the
same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to a Servicer), or (y) as provided
in Section 11.01 hereof, but in no event below the standard set forth in clause
(x) of this definition.
Accepted Servicing Practices: Each Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions that service for their own account mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Accountant's Attestation: As defined in Section 3.18.
Accrual Period: With respect to each Class of Class A, Class M and Class B
Certificates, their Corresponding REMIC Regular Interests and the Lower Tier
REMIC Interests and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date and with respect to the SWAP REMIC Regular Interests and
any Distribution Date, the calendar month immediately preceding the month in
which such Distribution Date occurs. All calculations of interest on each Class
of Class A, Class M and Class B Certificates, their Corresponding REMIC Regular
Interests and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year
and all calculations of interest on the SWAP REMIC Regular Interests will be
made on the basis of a 360-day year consisting of twelve 30-day months.
Additional Form 10-D Disclosure: Has the meaning set forth in Section 3.20.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by each Servicer
or the Master Servicer, as applicable, with respect to any Distribution Date
pursuant to Section 4.01, the amount of any such advances being equal to the sum
of the aggregate amount of all payments of principal and interest (or, with
respect to the interest-only Mortgage Loans, payments of scheduled interest)
(net of the Servicing Fee) on the related Mortgage Loans that were due during
the applicable Due Period and not
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received as of the close of business on the related Determination Date, except
as provided in Section 4.01 hereof, less the aggregate amount of any such
Delinquent payments that the applicable Servicer or Master Servicer, as
applicable, has determined would constitute a Non-Recoverable Advance were an
advance to be made with respect thereto; provided, however, that with respect to
(i) any Mortgage Loan which is not a first lien Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property) (ii) any shortfalls due to bankruptcy proceedings or the
application of the Relief Act or similar state legislation or regulations, or
(iii) the principal portion of any amount paid on a Balloon Loan, there will be
no obligation to make advances and, provided further, however, that with respect
to any Mortgage Loan that has been converted to an REO Property, which is less
that 150 days delinquent, the obligation to make Advances shall only be to
payments of interest (subject to the exceptions described above and net of the
related Servicing Fees), to be calculated after taking into account rental
income.
Advance Facility: A financing or other facility as described in Section
10.07.
Advancing Person: A Person to whom the relevant Servicer's rights under
this Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A Certificate
Principal Balance, the Class A-2B Certificate Principal Balance, the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance and the Class B-3 Certificate Principal Balance, in each case as of such
date of determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which were
used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Sponsor by an independent fee appraiser at the time of
the origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assessment of Compliance: As defined in Section 3.18.
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Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Mortgage Loan to the Trustee, which
assignment, notice of transfer or equivalent instrument may, if permitted by
law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.
Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 9.01(b) hereof.
Auction Date: The date on which the Auction occurs.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap or the Weighted Average Available Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 or 30 years which provides for level monthly payments of
principal and interest based on a 30- 40- or 50-year amortization schedule, with
a balloon payment of the remaining outstanding principal balance due on such
Mortgage Loan at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A (other than the Class R Certificate), Class M and Class B
Certificates constitutes a Class of Book-Entry Certificates.
Bring Down Letters: Those certain letter agreements, each dated as of
September 28, 2006 between each related Transferor and MLML.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of Oregon, State of California, State
of Illinois or in the City of New York, New York are authorized or obligated by
law or executive order to be closed.
Cap Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap Contract
or the Subordinate Certificates Cap Contract.
Cap Contract Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 4.04(k)(i) in the name of
the Trustee for the benefit of the Supplemental Interest Trust and designated
"LaSalle Bank National Association, as securities administrator for Citibank,
N.A., as trustee, in trust for registered holders of the Supplemental Interest
Trust." Funds in the Cap Contract Account shall be held in trust for the
Supplemental Interest Trust for the uses and purposes set forth in this
Agreement.
Cap Contract Counterparty: The Royal Bank of Scotland plc and its
successors.
Cap Contract Notional Balance: Any of the Class A-1 Cap Contract Notional
Balance, the Class A-2 Cap Contract Notional Balance or the Subordinate
Certificates Cap Contract Notional Balance.
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Cap Contract Termination Date: The Distribution Date in March 2007.
Certificate: Any one of the certificates of any Class executed by the
Securities Administrator and authenticated by the Securities Administrator in
substantially the forms attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account or Accounts created and
maintained by the Securities Administrator pursuant to Section 3.05(f) in the
name of the Trustee for the benefit of the Certificateholders and designated
"LaSalle Bank National Association, as securities administrator for Citibank,
N.A. as trustee, in trust for registered holders of Xxxxxxx Xxxxx Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-HE5."
Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For purposes
of Section 2.07 hereof, Certificate Group One shall be related to Group One.
Certificate Group Two: The Class A-2 Certificates. For purposes of Section
2.07 hereof, Certificate Group Two shall be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the immediately preceding sentence, however, to the extent any
excess referred to in the immediately preceding sentence is attributable to
distributions of proceeds of the Swap Agreement, such sentence shall be applied
by substituting "Class C Unpaid Realized Loss Amount" for "Class C Interest
Carry Forward Amount". Notwithstanding the foregoing on any Distribution Date
relating to a Due Period in which a Subsequent Recovery has been received by the
related Servicer, the Certificate Principal Balance of any Class of Certificates
then outstanding for which any Applied Realized Loss Amount has been allocated
will be increased, in order of seniority, by an amount equal to the lesser of
(i) the Unpaid Realized Loss Amount for such Class of Certificates and (ii) the
total of any Subsequent Recovery distributed on such date to the
Certificateholders (reduced by the amount of the increase in the Certificate
Principal Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the
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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
Securities Administrator and the Trustee are 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
Section 5.01 hereof.
Class A Certificate Principal Balance: As of any date of determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A Certificate
Principal Balance, the Class A-2B Certificate Principal Balance, the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal Balance and
the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the related Stepdown Date or any Distribution Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution Amount for
such Distribution Date and (2) on or after the Stepdown Date where a Stepdown
Trigger Event does not exist, the excess of (A) the Class A Certificate
Principal Balance immediately prior to such Distribution Date over (B) the
lesser of (i) 55.80% of the aggregate Stated Principal Balance of the Mortgage
Loans as of such Distribution Date and (ii) the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount; provided, however, that in no
event will the Class A Principal Distribution Amount with respect to any
Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest on the Mortgage Loans in Group One based on the Net Mortgage
Rates, less the pro rata portion (calculated based on the ratio of the Group One
Mortgage Loans to the total pool of Mortgage Loans) allocable to the Group One
Mortgage Loans of any Net Swap Payments or Swap Termination Payments (other than
Defaulted Swap Termination Payments) owed to the Swap Counterparty for such
Distribution Date in effect on the related Due Date divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group One as of the first day
of the related Accrual Period (or, in the case of the first Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of which is 30, and
the denominator of which is the actual number of days in the related Accrual
Period.
Class A-1 Cap Contract: The master agreement, credit support annex and
confirmation between the Securities Administrator on behalf of the Supplemental
Interest Trust and the Cap Contract Counterparty (in the form of Exhibit M-1
hereto).
Class A-1 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table attached hereto as
Exhibit N-1.
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Class A-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1 Certificates.
Class A-1 Certificates: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1 Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.1500% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.3000% per annum.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group One Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Group One Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group One Mortgage Loans of any Net Swap Payments or
Swap Termination Payments owed to the Swap Counterparty for such Distribution
Date (other than Defaulted Swap Termination Payments), divided by (y) the
aggregate Stated Principal Balance of the Group One Mortgage Loans as of the
first day of the related Accrual Period and (iii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-1 Pass-Through Rate: For the first Distribution Date, 5.47375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such Distribution
Date.
Class A-2 Available Funds Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12 and (ii) the quotient of (x) the total
scheduled interest on the Group Two Mortgage Loans based on the Net Mortgage
Rates in effect on the related Due Date, less the pro rata portion (calculated
based on the ratio of the Group Two Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap Payments or
Swap Termination Payments (other than Defaulted Swap Termination Payments) owed
to the Swap Counterparty for such Distribution Date, divided by (y) the
aggregate Stated Principal Balance of the Group Two Mortgage Loans as of the
first day of the related Accrual Period and multiplied by a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
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Class A-2 Cap Contract: The master agreement, credit support annex and
confirmation between the Securities Administrator on behalf of the Supplemental
Interest Trust and the Cap Contract Counterparty (in the form of Exhibit M-2
hereto).
Class A-2 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table attached hereto as
Exhibit N-2.
Class A-2 Certificates: Any of the Class A-2A, Class A-2B, Class A-2C and
Class A-2D Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12 and (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group Two Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Group Two Mortgage Loans to the total pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap Payments or
Swap Termination Payments owed to the Swap Counterparty for such Distribution
Date (other than Defaulted Swap Termination Payments), divided by (y) the
aggregate Stated Principal Balance of the Group Two Mortgage Loans as of the
first day of the related Accrual Period and multiplied by a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.
Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.0600% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.1200% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date, 5.38375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the
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Class A-2 Available Funds Cap for such Distribution Date and (3) the Class A-2
Maximum Rate Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.
Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.1100% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.2200% per annum.
Class A-2B Pass-Through Rate: For the first Distribution Date, 5.43375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C Certificates.
Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2C Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates
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and (2) interest on such excess (to the extent permitted by applicable law) at
the Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.1500% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.3000% per annum.
Class A-2C Pass-Through Rate: For the first Distribution Date, 5.47375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class A-2D Certificate: Any Certificate designated as a "Class A-2D
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2D Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2D Certificates.
Class A-2D Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2D Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2D Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2D Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2D Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2D Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2D Certificates with respect to interest on such prior Distribution Dates
and (2) interest on such excess (to the extent permitted by applicable law) at
the Class A-2D Pass-Through Rate for the related Accrual Period.
Class A-2D Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.2400% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.4800% per annum.
Class A-2D Pass-Through Rate: For the first Distribution Date, 5.56375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such Distribution
Date.
Class B Certificates: Any of the Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
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Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1 Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.8000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.2000% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 6.12375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M Certificate Principal Balance, have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date, (D) the Class
M-5 Certificate Principal Balance (after taking into account distributions of
the Class M-5 Principal Distribution Amount on such Distribution Date, (E) the
Class M-6 Certificate Principal Balance (after taking into account distributions
of the Class M-6 Principal Distribution Amount on such Distribution Date and (F)
the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 86.60% of the Stated Principal
Balance of the Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated Principal Balance of the Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Class A Certificates and Class M
Certificates has been reduced to zero, the Class B-1 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A and Class M
Certificates and (II) in no event will the Class B-1 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-1 Certificate
Principal Balance.
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Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-1 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.0000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 1.5000% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 6.32375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance and the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-1/M-2/M-3 Principal
Distribution Amount on such Distribution Date), (C) the Class M-4 Certificate
Principal Balance (after taking into account distributions of the Class M-4
Principal Distribution Amount on such Distribution Date), (D) the Class M-5
Certificate Principal Balance (after taking into account distributions of the
Class M-5 Principal Distribution Amount on such Distribution Date), (E) the
Class M-6 Certificate Principal Balance (after taking into account distributions
of the Class
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M-6 Principal Distribution Amount on such Distribution Date), (F) the Class B-1
Certificate Principal Balance (after taking into account distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date) and (G) the
Class B-2 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 89.40% of the Stated Principal Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Class A, Class M and Class B-1 Certificates
has been reduced to zero, the Class B-2 Principal Distribution Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of the Class B-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M and Class B-1 Certificates and (II)
in no event will the Class B-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-2 Certificate Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-2 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3 Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 2.0000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 3.0000% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 7.32375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
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Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance and the Class B-2 Certificate Principal Balance have been reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event
does not exist, the excess of (1) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal Balance and
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-1/M-2/M-3 Principal Distribution Amount on such
Distribution Date), (C) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (D) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date), (E) the Class M-6 Certificate Principal
Balance (after taking into account distributions of the Class M-6 Principal
Distribution Amount on such Distribution Date), (F) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date), (G) the Class B-2
Certificate Principal Balance (after taking into account distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date) and (H) the
Class B-3 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 91.60% of the Stated Principal Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Class A, Class M, Class B-1 and Class B-2
Certificates has been reduced to zero, the Class B-3 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M, Class B-1 and
Class B-2 Certificates and (II) in no event will the Class B-3 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class B-3 Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance".
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class C Certificates.
Class C Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class C Distributable Interest Rate on
a notional amount equal to the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date, plus the
interest portion of any previous distributions on such Class that is recovered
as a voidable
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preference by a trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on such Distribution Date to the Class C Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
(other than the Class LT-IO Interest) over (b) two times the weighted average of
the interest rates on the Lower Tier REMIC I Marker Interests and the Class LTIX
Interest (treating for purposes of this clause (b) the interest rate on each of
the Lower Tier REMIC I Marker Interests as being subject to a cap and a floor
equal to the interest rate of the Corresponding REMIC Regular Interest of the
Corresponding Certificates (as adjusted, if necessary, to reflect the length of
the Accrual Period for the LIBOR Certificates) and treating the Class LTIX
Interest as being capped at zero). The averages described in the preceding
sentence shall be weighted on the basis of the respective principal balances of
the Lower Tier REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates (other than amounts so
added attributable to Subsequent Recoveries or proceeds of the Swap Agreement).
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant (A) to the last sentence
of the definition of "Certificate Principal Balance" or (B) attributable to
distributions of proceeds of the Swap Agreement.
Class LTA-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificates and an interest rate equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTA-2D Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
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Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LT-IO Interest: An uncertificated regular interest in the Lower Tier
REMIC with the characteristics set forth in the description of the Lower Tier
REMIC in the Preliminary Statement.
Class LTIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC I Marker Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC II Marker Interests, and with
an interest rate equal to the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage Loans over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% the aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an interest
rate equal to the rate set forth in footnote 9 to the description of the Lower
Tier REMIC in the Preliminary Statement.
Class LTII2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage Loans over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans and with an interest rate
equal to the rate set forth in footnote 10 to the description of the Lower Tier
REMIC in the Preliminary Statement.
Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
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Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Certificate Principal Balance: For any date of determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2 Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class M-4
Certificate Principal Balance, Class M-5 Certificate Principal Balance and Class
M-6 Certificate Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
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Class M-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.2600% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.3900% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 5.58375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-1/M-2/M-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance has been reduced to zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date) and (B) the Class M-1, Class M-2 and Class M-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
73.40% of the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1/M-2/M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1, Class M-2 and Class
M-3 Certificates and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A Certificates and (II) in no event will
the Class M-1/M-2/M-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-1, Class M-2 and Class M-3 Certificate
Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount
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actually distributed to the Class M-2 Certificates with respect to interest on
such prior Distribution Dates and (2) interest on such excess (to the extent
permitted by applicable law) at the Class M-2 Pass-Through Rate for the related
Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.3000% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.4500% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 5.62375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.3300% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.4950% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 5.65375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
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Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4 Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.3800% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.5700% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 5.70375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance and
Class M-3 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1, Class M-2 and M-3 Certificate
Principal Balance (after taking into account distributions of the Class
M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-4 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 77.00% of the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date and (B) the excess of the Stated
Principal Balances for the Mortgage Loans as of such Distribution Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the
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Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates has been reduced to zero, the Class M-4 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-4 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class
M-1, Class M-2 and Class M-3 Certificates and (II) in no event will the Class
M-4 Principal Distribution Amount with respect to any Distribution Date exceed
the Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5 Certificates.
Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5 Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.4100% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.6150% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 5.73375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not
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exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1, Class M-2 and
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution
Date), (C) the Class M-4 Certificate Principal Balance (after taking into
account distributions of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-5 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 80.40% of
the Stated Principal Balances of the Mortgage Loans as of such Distribution Date
and (B) the excess of the Stated Principal Balances for the Mortgage Loans as of
such Distribution Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the
Class M-3 Certificates and the Class M-4 Certificates has been reduced to zero,
the Class M-5 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-5 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates and
(II) in no event will the Class M-5 Principal Distribution Amount with respect
to any Distribution Date exceed the Class M-5 Certificate Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6 Certificates.
Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6 Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.4700% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.7050% per annum.
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Class M-6 Pass-Through Rate: For the first Distribution Date, 5.79375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin, (2) the Weighted Average Available Funds Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1, Class M-2 and
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution
Date), (C) the Class M-4 Certificate Principal Balance (after taking into
account distributions of the Class M-4 Principal Distribution Amount on such
Distribution Date), (D) the Class M-5 Certificate Principal Balance (after
taking into account distributions of the Class M-5 Principal Distribution Amount
on such Distribution Date), and (E) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 83.60% of
the Stated Principal Balances of the Mortgage Loans as of such Distribution Date
and (B) the excess of the Stated Principal Balances for the Mortgage Loans as of
such Distribution Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the
Class M-3 Certificates, the Class M-4 Certificates and the Class M-5
Certificates has been reduced to zero, the Class M-6 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-6 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates and (II) in no event will the
Class M-6 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-6 Certificate Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P Certificate on
the face thereof, executed by the Securities Administrator and authenticated by
the Securities Administrator in substantially the form set forth in Exhibit A,
representing the right to distributions as set forth herein.
Class Payment Shortfall: As defined in Section 2.07(d)(ii) herein.
Class R Certificate: The Class R Certificate executed by the Securities
Administrator and authenticated by the Securities Administrator in substantially
the form set forth in Exhibit A.
Class R Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such Distribution Date plus the portion of
any previous distributions on such Class in respect of Current
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Interest or a Class R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R Certificate. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the Initial
Optional Termination Date for the Certificates, 0.1500% per annum and, as of any
Distribution Date after the Initial Optional Termination Date, 0.3000% per
annum.
Class R Pass-Through Rate: For the first Distribution Date, 5.47375% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such Distribution
Date.
Class SWR Interest: The sole class of "residual interest" in the SWAP
REMIC.
Closing Date: September 28, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Accounts: The separate Eligible Accounts created and initially
maintained by each Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated, "Wilshire
Credit Corporation, as servicer for Citibank, N.A., as trustee, in trust for
registered holders of Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2006-HE5" and "IndyMac Bank F.S.B., as
servicer for Citibank N.A., as trustee, in trust for registered holders of
Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates,
Series 2006-HE5". Funds in each Collection Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the sum of (1) the original principal balance of the
related Mortgage Loan and (2) any outstanding principal balances of Mortgage
Loans the liens on which are senior to the lien on such related Mortgage Loan
(such sum calculated at the date of origination of such related Mortgage Loan)
and the denominator of which is the lesser of (A) the Appraised Value of the
related Mortgaged Property and (B) the sales price of the related Mortgaged
Property at time of origination.
Commission: The Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a Mortgage Loan that are received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by a
Servicer in an amount not to exceed the product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, equal to the amount of interest at the Net Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th day of such
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preceding calendar month; provided that any month consisting of less than 30
days shall be deemed to consist of 30 days.
Corresponding Certificates: With respect to the Class LTA-1 Interest, the
Class A-1 and Class R Certificates. With respect to the Class LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest, the Class
A-2C Certificates. With respect to the Class LTA-2D Interest, the Class A-2D
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates.
Corresponding REMIC Regular Interest: For each Class of Certificates, the
interest in the Upper Tier REMIC listed on the same row in the table entitled
"Upper Tier REMIC" in the Preliminary Statement.
Current Interest: Any of the Class A-1 Current Interest, the Class A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C Current
Interest, the Class A-2D Current Interest, the Class R Current Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5 Current
Interest, the Class M-6 Current Interest, the Class B-1 Current Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest and the Class C
Current Interest.
Custodian: LaSalle Bank National Association.
Cut-off Date: September 1, 2006.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap
Agreement as a result of an event of default under the Swap Agreement with
respect to which the Swap Counterparty is the defaulting party or a termination
event (including a Downgrade Termination Event) under that agreement (other than
illegality or a tax event) with respect to which the Swap Counterparty is the
sole Affected Party (as defined in the Swap Agreement).
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such
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payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Principal Balance of this Certificate."
Deposit Date: With respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Securities Administrator and the initial Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such 25th day
is not a Business Day, the next succeeding Business Day, commencing in October
2006.
Downgrade Termination Event: An event whereby (x) the Swap Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term debt ratings
at least equal to the levels specified in the Swap Agreement, and (y) at least
one of the following events has not occurred (except to the extent otherwise
approved by the Rating Agencies): (i) within the time period specified in the
Swap Agreement with respect to such downgrade, the Swap Counterparty shall
transfer the Swap Agreement, in whole, but
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not in part, to a substitute swap counterparty that satisfies the requirements
set forth in the Swap Agreement, subject to the satisfaction of the Rating
Agency Condition or (ii) within the time period specified in the Swap Agreement
with respect to such downgrade, the Swap Counterparty shall collateralize its
exposure to the Trust Fund pursuant to an ISDA Credit Support Annex, subject to
the satisfaction of the Rating Agency Condition; provided that such ISDA Credit
Support Annex shall be made a credit support document for the Swap Counterparty
pursuant to an amendment to the Swap Agreement.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: An account that is (1) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (2) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (B) is either the Depositor or the corporate trust
department of a national banking association or banking corporation which has a
rating of at least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable to each Rating Agency without reduction or withdrawal of
the rating of any Class of Certificates, as evidenced in writing, by a
depository institution in which such accounts are insured by the FDIC (to the
limit established by the FDIC), the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
and acceptable to the Securities Administrator, the Trustee and each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account and a perfected first security interest against any collateral (which
shall be limited to Permitted Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, or (v) maintained at an eligible
institution whose commercial paper, short-term debt or other short-term deposits
are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi) maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by S&P, F-1 by Fitch or Prime-1 by Xxxxx'x
at the time any deposits are held on deposit therein, or (vii) a segregated
trust account or accounts maintained with the corporate trust department of a
federal or state chartered depository institution or trust company having
capital and surplus of not less than $50,000,000 or (viii) otherwise acceptable
to each Rating Agency, as evidenced by a letter from each Rating Agency to the
Securities Administrator and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements would
satisfy the requirements of Prohibited Transaction Exemption 90-29, Exemption
Application No. D-8012, 55 Fed. Reg. 21459 (1990), as amended, granted by the
United States Department of Labor (or any other applicable underwriter's
exemption granted by the United States Department of Labor), except, in relevant
part, for the requirement that the certificates have received a rating at the
time of acquisition that is in one of the three (or four, in the case of a
"designated transaction") highest generic rating categories by at least one of
S&P, Xxxxx'x or Fitch.
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ERISA Restricted Certificates: The Class C Certificates and Class P
Certificates and any other Certificate, as long as the acquisition and holding
of such Certificate is not covered by and exempt under an underwriter's
exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the Class A,
Class M and Class B Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date over (2) the amount of interest such Class of Certificates would have been
entitled to receive on such Distribution Date at an interest rate equal to the
REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the related Servicer) up to the Due
Date in the month in which such Liquidation Proceeds are required to be
distributed on the unpaid principal balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately preceding such Distribution Date
reduced by the Principal Funds with respect to such Distribution Date and (ii)
$57,804,922.86 and over (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of such Distribution Date and (2) on and after the Stepdown
Date, (A) the sum of (x) the Aggregate Certificate Principal Balance immediately
preceding such Distribution Date, reduced by the Principal Funds with respect to
such Distribution Date and (y) the greater of (a) 8.40% of the aggregate Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however, that if on
any Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current aggregate Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.
Xxxxxx Xxx: A federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate that is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a class of Offered Certificates is
based upon the related Available Funds Cap or the related Maximum Rate Cap, the
sum of (A) the excess of (1) the amount of interest that such Class would have
been entitled to receive on such Distribution Date had the Pass-Through Rate for
that Class
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not been calculated based on the related Available Funds Cap or the related
Maximum Rate Cap, up to but not exceeding greater of (x) the related Maximum
Rate Cap or (y) the sum of (i) the related Available Funds Cap and (ii) the
product of (A) a fraction, the numerator of which is 360 and the denominator of
which is the actual number of days in the related Accrual Period and (B) the sum
of (x) the quotient obtained by dividing (I) an amount equal to the proceeds, if
any, payable under the related Cap Contract with respect to such Distribution
Date by (II) the aggregate Certificate Principal Balance of each of the Classes
of Certificates to which such Cap Contract relates for such Distribution Date
and (y) the quotient obtained by dividing (I) an amount equal to any Net Swap
Payments owed by the Swap Counterparty for such Distribution Date by (II) the
aggregate Stated Principal Balance of the Mortgage Loans as of the immediately
preceding Distribution Date over (2) the amount of interest such class was
entitled to receive on such Distribution Date based on the related Available
Funds Cap, (B) the unpaid portion of any such excess from prior Distribution
Dates (and interest accrued thereon at the then applicable Pass-Through Rate for
such class, without giving effect to the applicable Available Funds Cap or the
related Maximum Rate Cap) and (C) any amount previously distributed with respect
to Floating Rate Certificate Carryover for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Xxxxxxx Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified in the
Group One Mortgage Loan Schedule attached hereto as Exhibit B-2.
Group One Net WAC: The Net WAC of Group One.
Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x) the Group One
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
the Class A-1 and Class R Certificates are outstanding and the Certificate
Principal Balance of the Class A-2 Certificates has been reduced to zero, the
Group One Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group One and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group Two" in
the Prospectus Supplement.
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Group Two Mortgage Loan: Any Mortgage Loan at any time identified in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit B-3.
Group Two Net WAC: The Net WAC of Group Two.
Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that (A) with respect to any Distribution Date on which the
Class A-2 Certificates are outstanding and the Certificate Principal Balances of
the Class A-1 and Class R Certificates is reduced to zero, the Group One
Principal Distribution Amount in excess of the amount necessary to reduce the
Certificate Principal Balance of the Class A-1 Certificates and Class R
Certificates to zero will be applied to increase the Group Two Principal
Distribution Amount and (B) with respect to any Distribution Date thereafter,
the Group Two Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group Two and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of notes guaranteed by the
NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate, the
Certificate Principal Balance of such Certificate or any predecessor Certificate
on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (or if such Mortgage
Loan is an REO Property, the fair market value of such REO Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property included in the Trust Fund, any insurance policy, including
all riders and endorsements thereto in effect with respect to such Mortgage Loan
or Mortgaged Property, including any replacement policy or policies for any
insurance policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or the
related Mortgaged Property pursuant to any Insurance Policy or any other
insurance policy covering such Mortgage Loan or Mortgaged Property, to the
extent such proceeds are payable to the mortgagee under the Mortgage, a Servicer
or the trustee under the deed of trust and are not applied to the restoration of
the related Mortgaged Property or released either to the Mortgagor or to the
holder of a senior lien on the related Mortgaged Property in accordance with the
procedures that the related Servicer would follow in servicing mortgage loans
held for its own account, in each case other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
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Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property.
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount, the Class
A-2D Interest Carry Forward Amount, the Class R Interest Carry Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3 Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount, as the case
may be.
Interest Determination Date: With respect to the Offered Certificates, (i)
for any Accrual Period other than the first Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period and (ii) for the
first Accrual Period, September 28, 2006.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee, (2) all Advances
relating to interest with respect to the Mortgage Loans, (3) all Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation Proceeds with
respect to the Mortgage Loans (to the extent such Liquidation Proceeds relate to
interest) collected during the related Prepayment Period, (5) all proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related Prepayment
Period or pursuant to Section 9.01 not later than the related Determination Date
(to the extent that such proceeds relate to interest) less the Servicing Fee and
(6) all Prepayment Charges received with respect to the Mortgage Loans during
the related Prepayment Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable (including without limitation
indemnity payments) to the Servicers, the Master Servicer, the Securities
Administrator and the Trustee pursuant to this Agreement allocable to interest.
Issuing Entity: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London, England,
Chicago, Illinois and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
LIBOR Certificates: The Class A, Class M and Class B Certificates.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the related Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation
or (b) as to which is not a first lien Mortgage Loan and is delinquent 180 days
or longer, the related Servicer has certified in a certificate of an officer of
the related Servicer delivered to the Depositor and Master Servicer that it does
not believe that there is a reasonable likelihood that any further net proceeds
will be received or recovered with respect to such Mortgage Loan.
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Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, whether
through trustee's sale, foreclosure sale, sale by a Servicer pursuant to this
Agreement or otherwise or amounts received in connection with any condemnation
or partial release of a Mortgaged Property and any other proceeds received in
connection with an REO Property, less the sum of related unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property and (Y) the sales
price of the related Mortgaged Property at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest, the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest, the Class
LTB-3 Interest, the Class LTIX Interest, the Class LTIIX Interest, the Class
LTII1A Interest, the Class LTII1B Interest, the Class LTII2A Interest, the Class
LTII2B Interest, the Class LT-IO Interest and the Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower Tier
REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class LTII2B Interest and the Class LT-IO Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the principal
balance of the Class LTII1A Interest to (ii) the principal balance of the Class
LTII2A Interest that is equal to the ratio of (i) the excess of (A) the
aggregate Stated Principal Balance of Group One over (B) the current Certificate
Principal Balance of the Class A-1 and Class R Certificates to (ii) the excess
of (A) the aggregate Stated Principal Balance of Group Two over (B) the current
Certificate Principal Balance of the Class A-2 Certificates.
Master Servicer: LaSalle Bank National Association, a national banking
association, or any successor in interest.
Master Servicer Collection Account: The separate Eligible Account created
and initially maintained by the Master Servicer pursuant to Section 3.05(e) in
the name of the Trustee for the benefit of the Certificateholders and
designated, "LaSalle Bank National Association, as master servicer for Citibank,
N.A., as trustee, in trust for registered holders of Xxxxxxx Xxxxx Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-HE5".
Funds in the Master Servicer Collection Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
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Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class A-2
Maximum Rate Cap or the Weighted Average Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
MIN: The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or its
successors in interest.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such Mortgage Loan and its successors and
assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument with all riders thereto creating a first or second lien or a
first or second priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee or the Custodian on its behalf to be added to the Mortgage File
pursuant to this Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Custodian on behalf of the Trustee to reflect the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, attached hereto as
Exhibits X-0, X-0 and B-3, setting forth the following information with respect
to each Mortgage Loan:
(i) the loan number;
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(ii) the borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
(x) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) THE FREQUENCY OF EACH ADJUSTMENT DATE;
(B) THE NEXT ADJUSTMENT DATE;
(C) THE MAXIMUM MORTGAGE RATE;
(D) THE MINIMUM MORTGAGE RATE;
(E) THE MORTGAGE RATE AS OF THE CUT-OFF DATE;
(F) THE RELATED PERIODIC RATE CAP;
(G) THE GROSS MARGIN;
(H) THE LIFETIME RATE CAP;
(xiii) location of the related Mortgaged Property;
(xiv) a code indicating whether a Prepayment Charge is applicable;
(A) THE PERIOD DURING WHICH SUCH PREPAYMENT CHARGE IS IN EFFECT;
(B) THE AMOUNT OF SUCH PREPAYMENT CHARGE;
(C) ANY LIMITATIONS OR OTHER CONDITIONS ON THE ENFORCEABILITY OF
SUCH PREPAYMENT CHARGE; AND
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(D) ANY OTHER INFORMATION PERTAINING TO THE PREPAYMENT CHARGE
SPECIFIED IN THE RELATED MORTGAGE NOTE;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Issuing Entity.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan and all
amendments, modifications and attachments thereto with all riders attached
thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
Net Rate: The per annum rate set forth in footnote 8 to the description of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate being based
on the weighted average of the interest rates on the SWAP REMIC Regular
Interests as adjusted and as set forth in such footnote).
Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on the related
Fixed Rate Payer Payment Date (as defined in the Swap Agreement) or made by the
Swap Counterparty to the Supplemental Interest Trust on the related Floating
Rate Payer Payment Date (as defined in the Swap Agreement). In each case, the
Net Swap Payment shall not be less than zero.
Net WAC: With respect to any Distribution Date and for any Mortgage Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in such Mortgage
Group calculated based on the respective Net Mortgage Rates and the Stated
Principal Balances of such Mortgage Loans as of the preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off Date).
NIM Notes: The notes to be issued pursuant to the Indenture.
NIMs Insurer: Any of the one or more insurers, if any, that is guaranteeing
certain payments under any NIM Notes; provided, that upon the payment in full of
the NIM Notes, all rights of the NIMs Insurer hereunder shall terminate.
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NIMs Insurer Default: As defined in Section 10.13.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by a Servicer (or Master Servicer in its capacity as
Successor Servicer) that, in the good faith judgment of such Servicer (or Master
Servicer in its capacity as Successor Servicer), will not or, in the case of a
current delinquency, would not, be ultimately recoverable by such Servicer (or
Master Servicer in its capacity as Successor Servicer) from the related
Mortgagor, related Liquidation Proceeds or otherwise related to the Mortgage
Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by a Servicer (or Master Servicer in its
capacity as Successor Servicer) that, in the good faith judgment of such
Servicer (or Master Servicer in its capacity as Successor Servicer), will not
or, in the case of a current Servicing Advance, would not, be ultimately
recoverable by such Servicer (or Master Servicer in its capacity as Successor
Servicer) from the related Mortgagor, related Liquidation Proceeds or otherwise
related to the Mortgage Loans.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A, Class M and Class B Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Master Servicer, the Servicers or the Securities Administrator (or any other
officer customarily performing functions similar to those performed by any of
the above designated officers and to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with a particular subject) or (2), if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Depositor, the
Master Servicer, the Servicers, the Securities Administrator or the Trustee, as
the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Securities Administrator on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest
whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Master Servicer, either Servicer, the Trustee or the
Securities Administrator reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor, the Master Servicer, either Servicer or
the Securities Administrator, (2) not have any direct
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financial interest in the Depositor, the Master Servicer, either Servicer, the
Trustee or the Securities Administrator or in any Affiliate of either such
party, and (3) not be connected with the Depositor, the Master Servicer, either
Servicer, the Trustee or the Securities Administrator as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The repurchase price received by the
Securities Administrator in connection with any repurchase of all of the
Mortgage Loans pursuant to Section 9.01.
Optional Termination Price: On any date after the Initial Optional
Termination Date an amount equal to the sum of (i) the then aggregate
outstanding Stated Principal Balance of the Mortgage Loans (or, if such Mortgage
Loan is an REO Property, the fair market value of such REO Property) plus
accrued interest thereon at the applicable Mortgage Rate through the Due Date in
the month in which the proceeds of the auction will be distributed on the
Certificates; (ii) any unreimbursed fees, indemnity amounts and out-of-pocket
costs and expenses owed to the Master Servicer, the Servicers, the Trustee or
the Securities Administrator and all unreimbursed Advances and Servicing
Advances, in each case incurred by such party in the performance of its
obligations; (iii) any unreimbursed costs, penalties and/or damages incurred by
the Trust Fund in connection with any violation relating to any of the Mortgage
Loans of any predatory or abusive lending law; and (iv) any unpaid Net Swap
Payments and any Swap Termination Payment owed to the Swap Counterparty.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(2) Certificates in exchange for which or in lieu of which other Certificates
have been executed by the Securities Administrator and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate Principal Balance
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of such Class divided by the aggregate Certificate Principal
Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of the
related Class shall equal the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class; except that in
the case of any Class P Certificates, the Percentage Interest
with respect to such Certificate shown on the face of such
Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:
(i) holding the Mortgage Loans transferred from the Depositor and
other assets of the Issuing Entity, including the Cap Contracts
and the Supplemental Interest Trust subtrust, which in turn holds
the Swap Agreement, and any credit enhancement and passive
derivative financial instruments that pertain to beneficial
interests issued or sold to parties other than the Depositor, its
Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) through the appropriate subtrust, as applicable, receiving
collections on the Mortgage Loans and the Swap Agreement and
making payments on such Certificates and interests in accordance
with the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities cannot be
contrary to the status of the Issuing Entity as a qualified
special purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
the timely payment of such obligations is backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor, the Securities
Administrator or any of its Affiliates, which is then receiving
the highest commercial or finance company paper rating of each
such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by the
Securities Administrator or any of its Affiliates) issued by any
depository institution or trust company incorporated
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under the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or
long term unsecured debt obligations of such depository
institution or trust company are then rated one of the two
highest long-term and the highest short-term ratings of each such
Rating Agency for such securities;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Securities
Administrator or any of its Affiliates, incorporated under the
laws of the United States or any state thereof which, at the time
of such investment, have one of the two highest long term ratings
of each Rating Agency;
(ix) interests in any money market fund (including those offered by
the Securities Administrator, the Trustee or its Affiliates),
which at the date of acquisition of the interests in such fund
and throughout the time such interests are held in such fund has
the highest applicable long term rating by each Rating Agency
rating such fund; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, other than the Securities
Administrator or any of its Affiliates, which on the date of
acquisition has been rated by each such Rating Agency in their
respective highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicers but not
yet deposited in the Collection Accounts) may be invested
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in investments (other than money market funds) treated as equity interests for
Federal income tax purposes, unless such Servicer shall receive an Opinion of
Counsel, at the expense of the party requesting that such investment be made, to
the effect that such investment will not adversely affect the status of the any
REMIC provided for herein as a REMIC under the Code or result in imposition of a
tax on the Issuing Entity or any REMIC provided for herein and (II) each such
investment must be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Securities Administrator with a duly
completed Internal Revenue Service Form W-8ECI or applicable successor form. The
terms "United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j) hereof.
Preliminary Statement: The paragraphs in the preamble to this Agreement
that precede the heading "The SWAP REMIC."
Prepayment Assumption: A rate of prepayment, as described in the Prospectus
Supplement in the definition of "Modeling Assumptions," relating to the Offered
Certificates.
Prepayment Charges: Any prepayment premium or charge payable by a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.
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Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the calendar month in which such Servicer Remittance Date occurs and the
last day of the related Prepayment Period, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Servicer Remittance Date occurs and ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first day to and including the 14th day of the month of such
Distribution Date), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.
Prepayment Period: With respect to any Distribution Date, the period
beginning with the opening of business on the 15th day of the calendar month
preceding the month in which such Distribution Date occurs (or in the case of
the first Distribution Date, beginning with the opening of business on the
Cut-off Date) and ending on the close of business on the 14th day of the month
in which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) the scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) prepayments
in full collected in the related Prepayment Period, (3) the Stated Principal
Balance of each Mortgage Loan that was purchased by the Depositor during the
related Prepayment Period or, in the case of a purchase pursuant to Section
9.01, on the Business Day prior to such Distribution Date, (4) the amount, if
any, by which the aggregate unpaid principal balance of any Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related Deleted Mortgage
Loans delivered by the Sponsor in connection with a substitution of a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds collected during
the related Prepayment Period (to the extent such Liquidation Proceeds relate to
principal and represent payment in full), (6) all Subsequent Recoveries received
during the related Due Period and (7) all other collections and recoveries in
respect of principal during the related Due Period, less (A) all Non-Recoverable
Advances relating to principal with respect to the Mortgage Loans and (B) other
amounts reimbursable (including without limitation indemnity payments) to the
Servicers, the Master Servicer, the Securities Administrator and the Trustee
pursuant to this Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the related Servicer in
accordance with the terms of the related Mortgage Note.
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Prospectus Supplement: The Prospectus Supplement dated September 26, 2006,
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Sponsor or the Transferor pursuant to Section 2.02 or 2.03
hereof, an amount equal to the sum of (i) 100% of the unpaid principal balance
of the Mortgage Loan as of the date of such purchase together with any
unreimbursed Servicing Advances, (ii) accrued interest thereon at the applicable
Mortgage Rate from (a) the date through which interest was last paid by the
Mortgagor to (b) the Due Date in the month in which the Purchase Price is to be
distributed to Certificateholders and (iii) any unreimbursed costs, penalties
and/or damages incurred by the Issuing Entity in connection with any violation
relating to such Mortgage Loan of any predatory or abusive lending law. With
respect to any REO Property purchased by a Servicer pursuant to Section 3.12(c)
hereof, an amount equal to the fair market value of such REO Property, as
determined in good faith by such Servicer.
QIB: A "qualified institutional buyer" within the meaning of Rule 144A.
Rating Agency: Either of S&P or Xxxxx'x. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Rating Agency Condition: As defined in the Swap Agreement.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the related Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Loan or (2) with respect to a
Mortgage Loan which is not a Liquidated Loan, any amount of principal that the
Mortgagor is no longer legally required to pay (except for the extinguishment of
debt that results from the exercise of remedies due to default by the
Mortgagor).
Record Date: With respect to the first Distribution Date, the Closing Date.
With respect to any other Distribution Date, the close of business on the last
Business Day of the month preceding the month in which the applicable
Distribution Date occurs.
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Securities Administrator which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, England, (ii) whose quotations appear
on the Reuters Screen LIBO Page on the relevant Interest Determination Date and
(iii) which have been designated as such by the Securities Administrator.
Regular Certificate: Any one of the Class A, Class M and Class B
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities,
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Securities Act Release No. 33-8518, 70 Fed Reg. 1,506, 1.531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
Regulation S Book-Entry Certificates: Certificates sold in offshore
transactions in reliance on Regulation S in the form of one or more permanent
global Certificates in definitive, fully registered form without interest
coupons, which shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Securities Administrator, as custodian
for DTC and registered in the name of a nominee of DTC.
Related Certificates: For each interest in the Upper Tier REMIC, the Class
of Certificates listed on the same row in the table entitled "Upper Tier REMIC"
in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the SWAP REMIC, the Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: In the case of a Class of the Class A, Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the Corresponding
REMIC Regular Interest.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
REMIC Regular Interests: Each of the interests in the Upper Tier REMIC as
set forth in the Preliminary Statement other than the Residual Interest.
REMIC SWAP Rate: For each Distribution Date (and the related Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap Agreement for
such Distribution Date, as set forth in the Prospectus Supplement.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by either Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor for
a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release,
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substantially in the form of Exhibit I (1) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (2) with respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan and, with
respect to any Adjustable Rate Mortgage Loan: (A) have a Maximum Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage Rate of the
Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no more than 1% per
annum higher or lower than the Minimum Mortgage Rate of the Deleted Mortgage
Loan; (C) have the same index and Periodic Rate Cap as that of the Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher or lower than
that of the Deleted Mortgage Loan; (D) not permit conversion of the related
Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing interest at
a rate not more than 1% per annum higher or lower than that of the Deleted
Mortgage Loan; (3) have a similar or higher FICO score or credit grade than that
of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or Combined
Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted by a
Servicer to the Trustee (or the Custodian on its behalf), substantially in the
form of Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement.
Required Percentage: As of any Distribution Date following the Stepdown
Date, the quotient of (1) the excess of (A) the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date, over (B) the
Certificate Principal Balance of the most senior Class of Certificates
outstanding as of such Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution Date.
Requirements: Any rules or regulations promulgated pursuant to the
Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Reserve Interest Rate: With respect to any Interest Determination Date, the
rate per annum that the Securities Administrator determines to be (1) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the one-month United States dollar lending rates which New York
City banks selected by the Securities Administrator are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (2) in the event that the Securities
Administrator can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class SWR Interest and Class LTR Interest
and distributions on the Class R Certificate in respect of Excess Interest.
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Responsible Officer: When used with respect to the Securities
Administrator, the Master Servicer, the Trustee or the Servicers, any officer of
the Securities Administrator, the Master Servicer, Trustee or the Servicers,
with direct responsibility for the administration of this Agreement and any
other officer to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service) for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as of
September 1, 2006, between the Depositor and the Sponsor.
Xxxxxxxx-Xxxxx Certification: Has the meaning set forth in Section 3.20.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: LaSalle Bank National Association, a national
banking association, or any successor in interest.
Securities Administrator Fee: The Securities Administrator is entitled to
the investment income earned on amounts on deposit in the Certificate Account as
set forth in Section 3.05(f) hereof.
Servicers: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest and IndyMac Bank, F.S.B., a national savings bank, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Remittance Date: With respect to Wilshire, with respect to any
Distribution Date, the later of two Business Days after the 15th day of the
month in which such Distribution Date occurs and the 18th day (or if such day is
not a Business Day, the next preceding Business Day) of the month in which such
Distribution Date occurs, and with respect to IndyMac, with respect to any
Distribution Date, the 18th day (or if such day is not a Business Day, the next
preceding Business Day) of the month in which such Distribution Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by each Servicer of its servicing
obligations hereunder (including the Master Servicer to the extent it is
required to make such Advance hereunder), including, but not limited to, the
cost of (1) the preservation, inspection, restoration and protection of a
Mortgaged Property, including without limitation advances in respect of prior
liens, real estate taxes and assessments, (2) any collection, enforcement or
judicial proceedings, including without limitation foreclosures, collections and
liquidations, (3) the conservation, management, sale and liquidation of any REO
Property, (4) executing and recording instruments of satisfaction, deeds of
reconveyance, substitutions of trustees on deeds of trust or Assignments of
Mortgage to the extent not otherwise recovered from the related Mortgagors or
payable under this Agreement, (5) correcting errors of prior servicers; costs
and expenses charged to the related Servicer by the Trustee, Master Servicer or
Securities Administrator; tax tracking;
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title research; flood certifications; and lender paid mortgage insurance, (6)
obtaining or correcting any legal documentation required to be included in the
Mortgage Files and reasonably necessary for each Servicer to perform their
obligations under this Agreement and (7) compliance with the obligations under
Sections 3.01 and 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: means 0.50% for each Mortgage Loan serviced by Wilshire
and 0.375% for each Mortgage Loan serviced by IndyMac Bank..
Servicing Officer: Any officer of a Servicer, as applicable 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 Master Servicer, the Securities Administrator and the Trustee by such
Servicer on the Closing Date pursuant to this Agreement, as such lists may from
time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by either Servicer,
to which the related Servicer may pledge and assign all of its right, title and
interest in, to and under this Agreement.
Servicing Transfer Costs: In the event that either Servicer does not
reimburse the Master Servicer under this Agreement, all costs associated with
the transfer of servicing from such predecessor Servicer, including, without
limitation, any costs or expenses associated with the termination of such
predecessor Servicer, the appointment of a successor servicer, the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Master Servicer or any successor
servicer to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Master Servicer or successor servicer to service the
Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Significance Estimate: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be an amount determined based
on the reasonable good-faith estimate by the Depositor or its Affiliate (and
reported to the Securities Administrator) of the aggregate maximum probable
exposure of the outstanding Certificates to the Swap Agreement.
Significance Percentage: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be a percentage equal to the
Significance Estimate divided by the aggregate outstanding Certificate Principal
Balance of the Certificates, prior to the distribution of the Principal
Distribution Amount on such Distribution Date.
Sponsor: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
its successor in interest.
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Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the related Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on the Servicer Advance Date prior to
such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the related
Servicer as recoveries of principal in accordance with Section 3.12 with respect
to such Mortgage Loan, that were received by such Servicer as of the close of
business on the last day of the related Due Period. Notwithstanding the
foregoing, the Stated Principal Balance of a Liquidated Loan shall be deemed to
be zero.
Stepdown Date: The earlier of: (A) the first Distribution Date on which the
aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero; and (B) the later to occur of (1) the Distribution Date in
October 2009 or (2) the first Distribution Date on which (A) the Class A
Certificate Principal Balance (reduced by the Principal Funds with respect to
such Distribution Date) is less than or equal to (B) 55.80% of the aggregate
Stated Principal Balances of the Mortgage Loans as of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ --------------------------------------
October 2008 -- September 2009 1.55% with respect to October 2008,
plus an additional 1/12th of 1.80% for
each month thereafter
October 2009 -- September 2010 3.30% with respect to October 2009,
plus an additional 1/12th of 1.90% for
each month thereafter
October 2010 -- September 2011 5.20% with respect to October 2010,
plus an additional 1/12th of 1.55% for
each month thereafter
October 2011 -- September 2012 6.75% with respect to October 2011,
plus an additional 1/12th of 0.80% for
each month thereafter
October 2012 and thereafter 7.55%
Stepdown Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans that are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 36.15%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month
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preceding such Distribution Date and (B) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date exceeds the Stepdown Required Loss
Percentage.
Subcontractor: Any outsourcer that performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to 5% or more of the
Mortgage Loans under the direction or authority of a Servicer (measured by
aggregate Stated Principal Balance of the Mortgage Loans, annually at the
commencement of the calendar year prior to the year in which an Assessment of
Compliance is required to be delivered, multiplied by a fraction, the numerator
of which is the number of months during which such Subcontractor performs such
discrete functions and the denominator of which is 12, or, in the case of the
year in which the Closing Date occurs, the number of months elapsed in such
calendar year).
Subordinate Certificates: Each of the Class M and Class B Certificates.
Subordinate Certificates Cap Contract: The master agreement, credit support
annex and confirmation between the Securities Administrator on behalf of the
Supplemental Interest Trust and the Cap Contract Counterparty (in the form of
Exhibit M-3 hereto).
Subordinate Certificates Cap Contract Notional Balance: With respect to any
Distribution Date, the Subordinate Certificates Cap Contract Notional Balance
set forth for such Distribution Date in the Subordinate Certificates One-Month
LIBOR Cap Table attached hereto as Exhibit N-3.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
reimbursed to the related Servicer related to Liquidated Loans) subsequent to
such Mortgage Loan being determined to be a Liquidated Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of either
Servicer pursuant to a Subservicing Agreement and is responsible for the
performance of the material servicing functions required to be performed by the
related Servicer under this Agreement that are identified in Item 1122(d) of
Regulation AB with respect to 10% or more of the Mortgage Loans under the
direction or authority of such Servicer (measured by aggregate Stated Principal
Balance of the Mortgage Loans, annually at the commencement of the calendar year
prior to the year in which an Assessment of Compliance is required to be
delivered, multiplied by a fraction, the numerator of which is the number of
months during which such Subservicer services the related Mortgage Loans and the
denominator of which is 12, or, in the case of the year in which the Closing
Date occurs, the number of months elapsed in such calendar year). Any
subservicer shall meet the qualifications set forth in Section 3.02.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Supplemental Interest Trust: The separate trust, established pursuant to
Section 4.04(l) of this Agreement and held by the Securities Administrator on
behalf of the Trustee for the benefit of the holders of the Certificates as a
segregated subtrust of the Trust Fund, in which the Swap Agreement will be held,
out of which any Swap Termination Payments or Net Swap Payments owed to the Swap
Counterparty will be paid, certain distributions to Certificateholders will be
made, and into which any Swap Termination Payments or Net Swap Payments received
from the Swap Counterparty will be deposited as set forth in Section 4.04
hereof.
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Swap Agreement: The swap agreement, dated as of September 28, 2006, between
the Swap Counterparty and the Supplemental Interest Trust evidenced by the
master agreement, credit support annex and confirmation.
Swap Counterparty: The Royal Bank of Scotland plc or any successor
counterparty who meets the requirements set forth in the Swap Agreement.
Swap LIBOR: With respect to any Distribution Date (and the related Accrual
Period) the product of (i) the Floating Rate Option (as defined in the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii) the quotient of
(a) the actual number of days in the Accrual Period for the Lower Tier REMIC
Interests divided by (b) 30.
Swap Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the second Business Day (as defined in the
Swap Agreement) immediately preceding each Distribution Date.
SWAP REMIC: As described in the Preliminary Statement and Section 2.07.
SWAP REMIC Interests: Each of the interests in the SWAP REMIC as set forth
in the Preliminary Statement.
SWAP REMIC Regular Interests: Each of the SWAP REMIC Interests other than
the Class SWR Interest.
Swap Termination Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Counterparty upon termination of the Swap Agreement.
Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Transfer Agreement: Each document set out on Exhibit J hereto pursuant to
which the Sponsor acquired any Mortgage Loan from the Transferor of such
Mortgage Loan.
Transferor: Each originator of a Mortgage Loan.
Trust Fund: The corpus of the Issuing Entity (the "Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2006-HE5") created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Collection Accounts; (ii) the Collection Accounts, the Master
Servicer Collection Account and the Certificate Account and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights under the
Insurance Policies with respect to the Mortgage Loans; (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; (vi) the Cap Contracts and Cap Contract Account and (vii) the
Supplemental Interest Trust, which in turn holds the Swap Agreement.
Trustee: Citibank, N.A., a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor
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thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
Uncertificated Class C Interest: An uncertificated REMIC Regular Interest
having the characteristics described in the Preliminary Statement.
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Persons.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1 Interest and
the Residual Interest, a per annum rate equal to the weighted average of the
interest rate of the Class LTII1B Interest for such Distribution Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate for the
Class LTII2B for such Distribution Date. In the case of the Class UTM-1, Class
UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class UTM-6, Class UTB-1, Class
UTB-2 and Class UTB-3 Interests, a per annum rate equal to the weighted average
of the interest rates of Class LTII1B and Class LTII2B Interests for such
Distribution weighted, respectively, on the basis of the uncertificated
principal balances of the Class LTII1A and the Class LTII2A Interests.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes and (2) each Class of the Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.
Weighted Average Available Funds Cap: With respect to a Distribution Date,
the per annum rate equal to the weighted average of the Class A-1 Available
Funds Cap and the Class A-2 Available Funds Cap (weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of each
Mortgage Group, the current Certificate Principal Balance of the Class A-1 and
Class R Certificates,
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in the case of Group One, or the Class A-2A, Class A-2B, Class A-2C and Class
A-2D Certificates, in the case of Group Two).
Weighted Average Maximum Rate Cap: With respect to a Distribution Date, the
per annum rate equal to the weighted average (weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of each
Mortgage Group, the current Certificate Principal Balance of the Class A-1 and
Class R Certificates, in the case of Group One, or the Class A-2A, Class A-2B,
Class A-2C and Class A-2D Certificates, in the case of Group Two) of the Class
A-1 Maximum Rate Cap and the Class A-2 Maximum Rate Cap.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
It is agreed and understood by the Depositor, the Master Servicer, the
Servicers, the Securities Administrator and the Trustee that it is not intended
that any Mortgage Loan be included in the Trust that is, without limitation,
either (i) a "High-Cost Home Loan" as defined in the New Jersey Home Ownership
Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004; (iii) a
"High-Cost Home Mortgage Loan" as defined in the Massachusetts Predatory Home
Loan Practices Act effective November 7, 2004; (iv) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan Law effective January 1, 2005 or (v)
a "High-Cost Home Loan" as defined by the Illinois High Risk Home Loan Act
effective January 1, 2004.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with the Trustee or the Custodian on its behalf the following
documents or instruments with respect to each Mortgage Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the order
of Citibank, N.A., as trustee, without recourse" together with all riders
thereto. The Mortgage Note shall include all intervening endorsements
showing a complete chain of the title from the Transferor to
[____________________].
(B) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage together with all riders thereto,
with evidence of recording thereon, or, if the original Mortgage has not
yet been returned from the recording office, a copy of the original
Mortgage together with all riders thereto certified to be a true copy of
the original of the Mortgage that has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged
Property is located and in the case of each MERS Loan, the original
Mortgage together with all riders thereto, noting the presence of the MIN
of the Loan and either language indicating that the Mortgage Loan is a MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with
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evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage in blank or, to "Citibank, N.A., as
trustee."
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has not
been received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located.
(F) Originals of all assumption and modification agreements, if any.
(G) If in connection with any Mortgage Loan, the Depositor cannot
deliver the Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, with evidence of recording thereon, if
applicable, concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee or the
Custodian on its behalf written notice stating that such Mortgage or
assumption, consolidation or modification, as the case may be, has been
delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to the
Trustee or the Custodian on its behalf such Mortgage, Assignments of
Mortgage or assumption, consolidation or modification, as the case may be,
with evidence of recording indicated thereon, if applicable, upon receipt
thereof from the public recording office. To the extent any required
endorsement is not contained on a Mortgage Note or an Assignment of
Mortgage, the Depositor shall make or cause to be made such endorsement.
(H) With respect to any Mortgage Loan, none of the Depositor, the
Master Servicer, the Servicers, the Securities Administrator or the Trustee
shall be obligated to cause to be recorded the Assignment of Mortgage
referred to in this Section 2.01. In the event an Assignment of Mortgage is
not recorded, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee shall have no liability for their failure to
receive and act on notices related to such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. None of the Depositor, the Master Servicer, the Servicers or
the Securities Administrator shall take any action inconsistent with such
ownership and shall not claim any ownership interest therein. The Depositor, the
Master Servicer, the Servicers or the Securities Administrator shall respond to
any third party inquiries with respect to ownership of the Mortgage Loans by
stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee or the Custodian on its behalf are and shall be held in
trust by the related Servicer, for the benefit of the Trustee as the owner
thereof, and such Servicer's possession of the contents of each Mortgage File so
retained is for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by such Servicer, is in a custodial capacity only.
The Depositor agrees to take no action inconsistent with
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the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Sponsor to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Sponsor deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Sponsor to the Depositor deemed to be secured by said pledge and that the
Trustee shall be deemed to be an independent custodian for purposes of
perfection of the security interest granted to the Depositor. If the conveyance
of the Mortgage Loans from the Depositor to the Trustee is characterized as a
pledge, it is the intention of this Agreement that this Agreement shall
constitute a security agreement under applicable law, and that the Depositor
shall be deemed to have granted to the Trustee a first priority security
interest in all of the Depositor's right, title and interest in, to and under
the Mortgage Loans, all payments of principal of or interest on such Mortgage
Loans, all other rights relating to and payments made in respect of the Trust
Fund, and all proceeds of any thereof. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person in any
Certificates, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreements described therein, and the benefit of the repurchase
obligations and the obligation of the Sponsor contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Sponsor, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans
Except as set forth in the exception report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it or the Custodian on its behalf in trust for the
use and benefit of all present and future Certificateholders. The Depositor will
cause the Sponsor to repurchase any Mortgage Loan to which a material exception
was taken in the Exception Report unless such exception is cured within 45
Business Days of the Closing Date.
The Securities Administrator acknowledges receipt of the three Cap
Contracts (forms of which are attached hereto as Exhibits M-1, M-2 and M-3) and
is hereby authorized and instructed to enter into such contracts not in its
individual capacity but solely as Securities administrator on behalf of the
trustee
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for the Supplemental Interest Trust, and is further directed to execute and
deliver the Transfer Agreements and the Sale Agreement.
The Securities Administrator acknowledges receipt of the Swap Agreement
that will be held in the Supplemental Interest Trust and is hereby instructed to
enter into the Swap Agreement, not in its individual capacity, but solely as
trustee for the Supplemental Interest Trust.
The Trustee or the Custodian on its behalf agrees, for the benefit of
Certificateholders, and the NIMs Insurer, to review each Mortgage File delivered
to it within 60 days after the Closing Date, to ascertain and to certify, within
70 days of the Closing Date, to the NIMs Insurer, the Depositor the Master
Servicer and the Servicers that all documents required by Section 2.01 (A)-(B),
(C) (if applicable), and (D)-(E), and the documents if actually received by it,
under Section 2.01(F), have been executed and received, and that such documents
relate to the Mortgage Loans identified in Exhibit B-1 that have been conveyed
to it. It is herein acknowledged that, in conducting such review, the Trustee or
Custodian shall not be under any duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable or appropriate for the represented
purpose, that they have actually been recorded or that they are other than what
they purport to be on their face. If the Trustee or the Custodian on its behalf
finds any document or documents constituting a part of a Mortgage File to be
missing or defective (that is, mutilated, damaged, defaced or unexecuted) in any
material respect, the Trustee or the Custodian on its behalf shall promptly (and
in any event within no more than five Business Days) after such finding so
notify the NIMs Insurer, the Servicers, the Master Servicer the Sponsor and the
Depositor. In addition, the Trustee or the Custodian on its behalf shall also
notify the NIMs Insurer, the Servicers, the Master Servicer, the Sponsor and the
Depositor if the original Mortgage with evidence of recording thereon with
respect to a Mortgage Loan is not received within 70 days of the Closing Date;
if it has not been received because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee or the Custodian on its
behalf written notice stating that such Mortgage has been delivered to the
appropriate public recording office for recordation and thereafter the Depositor
shall deliver or cause to be delivered such Mortgage with evidence of recording
thereon upon receipt thereof from the public recording office. The Trustee or
the Custodian on its behalf shall request that the Sponsor correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant
to the provisions of Section 2.03(c), within 90 days from the date the Sponsor
was notified of such omission or defect and, if the Sponsor does not correct or
cure such omission or defect within such period, that the Sponsor purchase such
Mortgage Loan from the Issuing Entity within 90 days from the date the Trustee
or the Custodian on its behalf notified the Sponsor of such omission, defect or
other irregularity at the Purchase Price of such Mortgage Loan. The Purchase
Price for any Mortgage Loan purchased pursuant to this Section 2.02 shall be
paid to the related Servicer and deposited by the related Servicer in the Master
Servicer Collection Account or related Collection Account, as appropriate,
promptly upon receipt, and upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer or receipt of such deposit by the
Trustee or the Custodian on its behalf, upon receipt of a Request for Release
and certification of the related Servicer of such required deposit, shall
promptly release to the Sponsor the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, without
recourse, as shall be requested by the Sponsor and necessary to vest in the
Sponsor or its designee, as the case may be, any Mortgage Loan released pursuant
hereto, and the Trustee shall have no further responsibility with regard to such
Mortgage Loan. It is understood and agreed that the obligation of the Sponsor to
purchase, cure or substitute any Mortgage Loan as to which a material defect in
or omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to the Trustee on behalf of
Certificateholders and the NIMs Insurer. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the NIMs
Insurer, the Depositor or the Trustee pursuant to the Sale Agreement, the
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Transfer Agreements and or the Bring Down Letters. Neither the Trustee nor the
Custodian on its behalf shall be under any duty or obligation to inspect, review
and examine such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, recordable, duly authorized,
sufficient, legal, valid or appropriate to the represented purpose, or that they
have actually been recorded, or that they are other than what they purport to be
on their face. The Servicers, the Master Servicer, the Securities Administrator
and the Trustee shall keep confidential the name of each Mortgagor except as
required for performance of this Agreement and the Servicers, the Master
Servicer, the Securities Administrator and the Trustee shall not solicit any
such Mortgagor for the purpose of refinancing the related Mortgage Loan;
notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Trustee, the Servicers,
the Master Servicer or the Securities Administrator from sources other than the
other parties hereto, (ii) disclosure of any and all information (A) if required
to do so by any applicable law, rule or regulation, (B) to any government agency
or regulatory body having or claiming authority to regulate or oversee any
aspects of the business of the Trustee, the Servicers or that of any Affiliate,
(C) pursuant to any subpoena, civil investigation demand or similar demand or
request of any court, regulatory authority, arbitrator or arbitration to which
the Trustee, the Servicers or any Affiliate or an officer, director, employer or
shareholder thereof is a party or (D) to any Affiliate, independent or internal
auditor, agent, employee or attorney of the Trustee, the Servicers, the Master
Servicer or the Securities Administrator having a need to know the same,
provided that the Trustee, the Servicers, the Master Servicer or the Securities
Administrator, as applicable, advises such recipient of the confidential nature
of the information being disclosed, or (iii) any other disclosure authorized by
the Depositor.
Within 70 days of the Closing Date, the Trustee (or the Custodian on its
behalf) shall deliver to the NIMs Insurer, the Depositor, the Master Servicer
and each Servicer the Initial Certification, substantially in the form of
Exhibit D attached hereto, evidencing the completeness of the Mortgage Files,
with any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the Depositor
(a) The Depositor hereby represents and warrants to the Servicers, the
Master Servicer, the Securities Administrator, the NIMs Insurer and the Trustee
as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement and the Sale
Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and has
duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
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(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor; and the Depositor is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or meet
any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and the Sale Agreement or the ability of the Depositor to perform
its obligations under this Agreement and the Sale Agreement in accordance
with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each Mortgage
Loan as of the Closing Date, and following the transfer of the Mortgage
Loans to it by the Sponsor, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims, liens,
mortgage, pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of each Transferor with respect
to the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement and brought forward to the Closing Date
pursuant to the related Bring Down Letter. The representations and warranties of
each Transferor with respect to the Mortgage Loans contained in the Bring Down
Letter were made as of the Closing Date. The representations and warranties of
the Sponsor with respect to the Mortgage Loans contained in the Sale Agreement
were made as of the Closing Date. To the extent that any fact, condition or
event with respect to a Mortgage Loan constitutes a breach of (i) both
representation or warranty of the applicable Transferor under the applicable
Transfer Agreements or Bring Down Letters and (ii) a representation or warranty
of the Sponsor under the Sale Agreement, the obligations of the Sponsor under
the Sale Agreement shall be enforced against the Transferor or the Sponsor, as
applicable, as set forth in the Sale Agreement. The Trustee is hereby directed
to and does acknowledge that the Sponsor shall have no obligation or liability
with respect to any breach of a representation or warranty made by it with
respect to any related Mortgage Loans, except as otherwise set forth in the Sale
Agreement, if (as certified to the Trustee by the Sponsor) the fact, condition
or event constituting such breach also constitutes a breach of a representation
or warranty made by the related Transferor in the related Transfer Agreement or
Bring Down Letter, without regard to whether the related Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee also is hereby directed to and does acknowledge that the Sponsor shall
have no obligation or liability with respect to any breach of a
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representation or warranty made solely by the Transferors with respect to the
Mortgage Loans, without regard to whether the related Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(iv)) under
any circumstances.
In addition to the representations and warranties of the Transferors in the
Transfer Agreements that were brought forward to the Closing Date pursuant to
the related Bring Down Letter, with respect to each Mortgage Loan, each
Transferor made certain additional covenants regarding such Mortgage Loan, as
set forth in the related Transfer Agreement. With respect to any breach of such
additional covenants that materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the Sponsor shall (1) use reasonable
efforts to enforce such covenant against the related Transferor and (2) if the
Sponsor successfully enforces any obligation of the related Transferor to
repurchase such Mortgage Loan, the Sponsor shall repurchase such Mortgage Loan
in accordance with this Section 2.03. If the Sponsor does not successfully
enforce the obligation, if any, of the Transferor to repurchase a Mortgage Loan
with respect to any breach of any such additional covenants, the Sponsor shall
have no obligation or right to repurchase or cure such Mortgage Loan.
(c) Upon discovery by any of the NIMs Insurer, the Master Servicer,
the Securities Administrator, the Depositor, the Servicers or the Trustee of a
breach of any of such representations and warranties that adversely and
materially affects the value of the related Mortgage Loan, Prepayment Charges or
the interests of the Certificateholders, the party discovering such breach shall
give prompt written notice to the other parties. Within 90 days of the discovery
of such breach of any representation or warranty, the applicable Transferor or
the Sponsor, as applicable, shall either (a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan or any property acquired in respect
thereof from the Trustee at the Purchase Price or (c) within the two year period
following the Closing Date, substitute a Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of any Transferor or the Sponsor, the Trustee's
rights shall be enforced under applicable Transfer Agreement and the Sale
Agreement for the benefit of Certificateholders and the NIMs Insurer. If a
breach of the representations and warranties set forth in a Transfer Agreement
hereof exists solely due to the unenforceability of a Prepayment Charge, the
Trustee (if it has had actual notice thereof) or the other party having notice
thereof shall notify the related Servicer thereof and not seek to enforce the
repurchase remedy provided for herein unless such Mortgage Loan is not current.
In the event of a breach of the representations and warranties with respect to
the Mortgage Loans set forth in the Transfer Agreement, the Trustee shall use
reasonable efforts to enforce the right of the Issuing Entity to be indemnified
for such breach of representation and warranty. In the event that such breach
relates solely to the unenforceability of a Prepayment Charge, amounts received
in respect of such indemnity up to the amount of such Prepayment Charge shall be
distributed pursuant to Section 4.04(b)(i). As provided in the Sale Agreement,
if the Sponsor substitutes for a Mortgage Loan for which there is a breach of
any representations and warranties in the related Transfer Agreement which
adversely and materially affects the value of such Mortgage Loan and such
substitute mortgage loan is not a Replacement Mortgage Loan, under the terms of
the Sale Agreement, the Sponsor will, in exchange for such substitute Mortgage
Loan, (i) provide the applicable Purchase Price for the affected Mortgage Loan
or (ii) within two years of the Closing Date, substitute such affected Mortgage
Loan with a Replacement Mortgage Loan. Any such substitution shall not be
effected prior to the additional delivery to the Trustee or the Custodian on its
behalf of a Request for Release substantially in the form of Exhibit I and shall
not be effected unless it is within two years of the Startup Day. The Sponsor
indemnifies and holds the Issuing Entity, the Trustee, the Depositor, the
Servicers, the NIMs Insurer, the Master Servicer, the Securities Administrator
and each Certificateholder harmless against any and all taxes, claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Issuing Entity, the
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Trustee, the Depositor, the Servicers, the NIMs Insurer, the Master Servicer,
the Securities Administrator and any Certificateholder may sustain in connection
with any actions of the Sponsor relating to a repurchase of a Mortgage Loan
other than in compliance with the terms of this Section 2.03 and the Sale
Agreement, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Issuing Entity or any REMIC provided for herein,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup day" under Section 860G(d)(1) of the Code, or (ii) any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificate is
outstanding. In furtherance of the foregoing, if the Transferor or the Sponsor,
as applicable, is not a member of MERS and repurchases a Mortgage Loan which is
registered on the MERS System, the Transferor or the Sponsor, as applicable, at
its own expense and without any right of reimbursement, shall cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to transfer
the Mortgage from MERS to the Transferor or the Sponsor, as applicable, and
shall cause such Mortgage to be removed from registration on the MERS System in
accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Sponsor pursuant to
the Sale Agreement, or by any Transferor pursuant to the applicable Transfer
Agreement, the principal portion of the funds received by the related Servicer
in respect of such repurchase of a Mortgage Loan will be considered a Principal
Prepayment and shall be deposited in the related Collection Account pursuant to
Section 3.05. Upon receipt by the Trustee or the Custodian on its behalf, upon
receipt of notice from the related Servicer of receipt by the related Servicer
of the full amount of the Purchase Price for a Deleted Mortgage Loan, and upon
receipt of the Mortgage File for a Replacement Mortgage Loan substituted for a
Deleted Mortgage Loan, shall release and reassign to the Sponsor or the
applicable Transferor, as applicable, the related Mortgage File for the Deleted
Mortgage Loan and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as shall
be necessary to vest in such party or its designee or assignee title to any
Deleted Mortgage Loan released pursuant hereto, free and clear of all security
interests, liens and other encumbrances created by this Agreement, which
instruments shall be prepared by the applicable Transferor, and neither the
Trustee, the Custodian on its behalf nor the Securities Administrator shall have
any further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee (or the Custodian on its behalf) pursuant to the terms of this Article
II in exchange for a Deleted Mortgage Loan: (i) the applicable Transferor or the
Sponsor, as applicable, must deliver to the Trustee (or the Custodian on its
behalf) the Mortgage File for the Replacement Mortgage Loan containing the
documents set forth in Section 2.01 along with a written certification
certifying as to the Mortgage Loan satisfying all requirements under the
definition of Replacement Mortgage Loan and the delivery of such Mortgage File
and containing the granting language set forth in Section 2.01; and (ii) the
Depositor will be deemed to have made, with respect to such Replacement Mortgage
Loan, each of the representations and warranties made by it with respect to the
related Deleted Mortgage Loan. The Trustee (or the Custodian on its behalf)
shall review the Mortgage File with respect to each Replacement Mortgage Loan
and certify to the Depositor that all documents required by Section 2.01(A)-(B),
(C) (if applicable), and (D)-(E) have been executed and received.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans.
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An amount equal to the aggregate of the deficiencies described in the preceding
sentence (such amount, the "Substitution Adjustment Amount") plus an amount
equal to any unreimbursed costs, penalties and/or damages incurred by the
Issuing Entity in connection with any violation relating to such Deleted
Mortgage Loan of any predatory or abusive lending law shall be remitted by the
Sponsor to the related Servicer for deposit into the related Collection Account
by the Sponsor on the Determination Date for the Distribution Date relating to
the Prepayment Period during which the related Mortgage Loan became required to
be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the Securities
Administrator and the NIMs Insurer shall each have received an Opinion of
Counsel (at the expense of the party seeking to make the substitution) that,
under current law, such substitution will not (A) affect adversely the status of
any REMIC established hereunder as a REMIC, or of the related "regular
interests" as "regular interests" in any such REMIC, or (B) cause any such REMIC
to engage in a "prohibited transaction" or prohibited contribution pursuant to
the REMIC Provisions.
The Depositor shall amend the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans and
shall deliver a copy of such amended Mortgage Loan Schedule to the NIMs Insurer,
the Servicers, the Master Servicer, the Securities Administrator and the
Trustee. Upon such substitution by the Sponsor, such Replacement Mortgage Loan
or Replacement Mortgage Loans shall constitute part of the Mortgage Pool and
shall be subject in all respects to the terms of this Agreement and the
applicable Sale Agreement, including all applicable representations and
warranties thereof included in the applicable Sale Agreement as of the date of
substitution.
(d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the Sponsor and
the Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of each Transferor, assigned by the Sponsor to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee or the Custodian on
its behalf and shall continue throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the related Servicer on the Closing Date.
(f) The Depositor shall notify the Servicers, the Master Servicer, the
Securities Administrator and the Trustee when any NIM Notes are issued and when
such NIM Notes are no longer outstanding.
SECTION 2.04. Representations and Warranties of the Master Servicer; the
Servicers; the Securities Administrator;
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicers, and the Trustee as follows, as of the date hereof:
(i) The Master Servicer is duly organized and is validly existing as a
national banking association and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Master Servicer.
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(ii) The Master Servicer has the power and authority to master service
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of the Master Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Master Servicer, enforceable against the Master Servicer in accordance with
its terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought.
(iii) The execution and delivery of this Agreement by the Master
Servicer, the master servicing of the Mortgage Loans under this Agreement,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Master Servicer and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of the Master Servicer or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument to
which the Master Servicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Master Servicer; and the Master Servicer is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Master Servicer's
ability to perform or meet any of its obligations under this Agreement..
(iv) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened, against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or its performance of any of its other obligations under this
Agreement in accordance with the terms hereof. No consent, approval,
authorization or order of any court or governmental agency or body is
required for the execution, delivery and performance by the Master Servicer
of, or compliance by the Master Servicer with, this Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Master Servicer
has obtained the same.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Master Servicer has obtained the same.
(b) Wilshire hereby represents and warrants to the Depositor, the
Master Servicer, the Securities Administrator, IndyMac and the Trustee as
follows, as of the date hereof:
(i) Wilshire is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Oregon and is
duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by Wilshire in any state in which a
Mortgaged Property is located or is otherwise not required under applicable
law to effect
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such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(ii) Wilshire has the corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of Wilshire the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of
Wilshire, enforceable against Wilshire in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
(iii) The execution and delivery of this Agreement by Wilshire, the
servicing of the Mortgage Loans under this Agreement, the consummation of
any other of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof are in the ordinary
course of business of Wilshire and will not (A) result in a material breach
of any term or provision of the charter or by-laws of Wilshire or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Wilshire is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to Wilshire of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Wilshire; and Wilshire is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Wilshire's ability
to perform or meet any of its obligations under this Agreement.
(iv) Wilshire is an approved servicer of mortgage loans for Xxxxxx Xxx
and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of Wilshire's knowledge,
threatened, against Wilshire that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of
Wilshire to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Wilshire of, or compliance by Wilshire with, this Agreement
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, Wilshire has
obtained the same.
(vii) Wilshire has fully furnished and will fully furnish (for the
period it serviced the Mortgage Loans), in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower
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credit files to Equifax, Experian and Trans Union Credit Information
Company on a monthly basis.
(c) IndyMac hereby represents and warrants to the Depositor, the
Master Servicer, the Securities Administrator, Wilshire and the Trustee as
follows, as of the date hereof:
(i) IndyMac is duly organized and is validly existing as a national
banking association and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by IndyMac
in any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such state, to
the extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this Agreement
in accordance with the terms hereof.
(ii) IndyMac has the power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by this Agreement and has duly authorized by
all necessary corporate action on the part of IndyMac the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of IndyMac,
enforceable against IndyMac in accordance with its terms, except that (a)
the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefore
may be brought.
(iii) The execution and delivery of this Agreement by IndyMac, the
servicing of the Mortgage Loans under this Agreement, the consummation of
any other of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof are in the ordinary
course of business of IndyMac and will not (A) result in a material breach
of any term or provision of the charter or by-laws of IndyMac or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which IndyMac is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to IndyMac of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
IndyMac; and IndyMac is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the IndyMac's ability to perform or meet
any of its obligations under this Agreement.
(iv) IndyMac is an approved servicer of mortgage loans for Xxxxxx Xxx
and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of IndyMac's knowledge,
threatened, against IndyMac that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of
IndyMac to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
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(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by IndyMac of, or compliance by IndyMac with, this Agreement or
the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, IndyMac has obtained
the same.
(vii) IndyMac has fully furnished and will fully furnish (for the
period it serviced the Mortgage Loans), in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files
to Equifax, Experian and Trans Union Credit Information Company on a
monthly basis.
(d) The Securities Administrator hereby represents and warrants to the
Depositor, the Servicers and the Trustee as of the date hereof:
(i) The Securities Administrator is duly organized and is validly
existing as a national banking association and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by the Securities Administrator
(ii) The Securities Administrator has the full corporate power and
authority to execute, deliver and perform, and to enter into and
consummate, the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Securities
Administrator the execution, delivery and performance of this Agreement;
and this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and binding
obligation of the Securities Administrator, enforceable against the
Securities Administrator in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally
and (b) the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding hereunder may be
brought.
(iii) The execution and delivery of this Agreement by the Securities
Administrator, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Securities
Administrator and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Securities Administrator or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Securities
Administrator is a party or by which it may be bound, or (C) constitute a
material violation of any statute, order or regulation applicable to the
Securities Administrator of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Securities
Administrator; and the Securities Administrator is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Securities Administrator's ability to perform or meet any of its
obligations under this Agreement.
(iv) No litigation is pending or, to the best of the Securities
Administrator's knowledge, threatened, against the Securities Administrator
that would materially and adversely
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affect the execution, delivery or enforceability of this Agreement or the
ability of the Securities Administrator to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Securities Administrator of, or compliance by the
Securities Administrator with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Securities Administrator has
obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that are not
"Qualified Mortgages"
Upon discovery by the Depositor, the Master Servicer, the Securities
Administrator, either Servicer or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within five Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Depositor shall, at the Depositor's
option, either (i) substitute, if the conditions in Section 2.03(c) with respect
to substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 2.03. The Trustee, or the
Custodian on its behalf upon the written direction of the Depositor, shall
reconvey to the Depositor the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.
SECTION 2.06. Authentication and Delivery of Certificates
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Securities
Administrator has caused to be authenticated and delivered to or upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates duly
authenticated by the Securities Administrator in authorized denominations
evidencing ownership of the entire Trust Fund. The Trustee agrees to hold the
Trust Fund and exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform its duties set
forth in this Agreement in accordance with the provisions hereof.
SECTION 2.07. REMIC Elections
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper Tier REMIC, the Lower Tier
REMIC and the SWAP REMIC as a REMIC. The Trustee, upon written direction of the
Securities Administrator, shall sign the returns providing for such elections
and such other tax or information returns that are required to be signed by the
Trustee under applicable law. This Agreement shall be construed so as to carry
out the intention of the parties that each of the Upper Tier REMIC, the Lower
Tier REMIC and the SWAP REMIC be treated as a REMIC at all times prior to the
date on which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar year.
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The SWAP REMIC shall consist of all of the assets of the Trust Fund, other
than (i) amounts distributable to the Class P Certificates pursuant to Section
4.04(b)(i) hereof, (ii) the interests issued by the SWAP REMIC and the interests
issued by the Lower Tier REMIC, (iii) the grantor trusts described in Section
2.07 hereof, (iv) each Cap Contract and the Cap Contract Account and (v) the
Swap Agreement and the Supplemental Interest Trust. The SWAP REMIC shall issue
the SWAP REMIC Regular Interests, which shall be designated as regular interests
of such REMIC, and shall issue the Class SWR Interest, which shall be designated
as the sole class of residual interest in the SWAP REMIC. Each of the SWAP REMIC
Regular Interests shall have the characteristics set forth in the Preliminary
Statement and this Section 2.07.
The Lower Tier REMIC shall consist of the SWAP REMIC Regular Interests. The
Lower Tier REMIC shall issue the Lower Tier REMIC Regular Interests, which shall
be designated as regular interests of such REMIC and shall issue the Class LTR
Interest, which shall be designated as the sole class of residual interest in
the Lower Tier REMIC. Each of the Lower Tier REMIC Regular Interests shall have
the characteristics set forth in its definition and the Preliminary Statement.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC Regular
Interests. The REMIC Regular Interests shall be designated as the regular
interests in the Upper Tier REMIC and the Residual Interest shall be designated
as the sole class of residual interest in the Upper Tier REMIC. For federal
income tax purposes, the pass-through rate on each REMIC Regular Interest (other
than the Uncertificated Class C Interest and the Class UT-IO Interest) and on
the sole class of residual interest in the Upper Tier REMIC shall be subject to
a cap equal to the Upper Tier REMIC Net WAC Cap.
The beneficial ownership of the Class SWR Interest, Class LTR Interest and
the Residual Interest shall be represented by the Class R Certificate. The Class
SWR Interest and Class LTR Interest shall not have a principal balance or bear
interest.
(c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of the Class R Certificate, by
its acceptance thereof, irrevocably appoints the Securities Administrator as its
agent and attorney-in-fact to act as "tax matters person" with respect to each
such REMIC for purposes of the REMIC Provisions. If there is more than one
beneficial owner of the Class R Certificate, the "tax matters person" shall be
the Person with the greatest percentage interest in the Class R Certificate and,
if there is more than one such Person, shall be determined under Treasury
regulation Section 1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
(d) (i) It is intended that the rights of each Class of the Class A,
Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A Certificates (other than the Class R
Certificate), Class M Certificates, Class B Certificates and the residual
interest in the Upper Tier REMIC held by the holder of the Class R Certificate.
For information reporting requirements, the rights of the Class A, Class M and
Class B Certificates to receive payments in respect of Excess Interest shall be
assumed to have zero or a de minimis value. This provision is intended to
satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with REMIC interests to be separately
respected and shall be interpreted consistently with such regulation. On each
Distribution Date, to the extent that any of the Class A, Class M and Class B
Certificates receive payments in respect of Excess Interest, such amounts, to
the extent not derived from payments on the Cap Contracts or the Swap Agreement,
will be treated as distributed by the Upper Tier
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REMIC to the Class C Certificates pro rata in payment of the amounts specified
in Section 4.04(g) and then paid to the relevant Class of Certificates pursuant
to the related interest rate cap agreement.
(ii) It is intended that the beneficial owners of the Certificates
(other than the Class P and Class C Certificates) shall be treated as having
entered into a notional principal contract with respect to the beneficial owners
of the Class C Certificates. Pursuant to each such notional principal contract,
all beneficial owners of each Class of Certificates (other than the Class P and
Class C Certificates) shall be treated as having agreed to pay, on each
Distribution Date, to the beneficial owners of the Class C Certificates an
aggregate amount equal to the excess, if any, of (i) the amount payable on such
Distribution Date on the Corresponding REMIC Regular Interest of such Class of
Certificates over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a "Class Payment Shortfall"). A Class Payment
Shortfall shall be allocated to each Class of Certificates to the extent that
interest accrued on such Class for the related Accrual Period at the
Pass-Through Rate for a Class, computed by substituting "Upper Tier REMIC Net
WAC Cap" for the Available Funds Cap set forth in the definition thereof,
exceeds the amount of interest accrued on such Certificate at the Pass-Through
Rate (without such substitution) for the related Accrual Period, and a Class
Payment Shortfall payable from principal collections shall be allocated to the
most subordinate Class of Certificates with an outstanding principal balance to
the extent of such balance.
(e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class C Interest, the uncertificated Class UT-IO Interest,
the rights to receive payments deemed made by the Class A, Class M and Class B
Certificates in respect of notional principal contracts described in Section
2.07(d)(ii), the Supplemental Interest Trust which holds the Swap Agreement, the
Cap Contracts, the Cap Contract Account and the obligation of the holders of the
Class C Certificates to pay amounts in respect of Excess Interest to the holders
of the Class A, Class M and Class B Certificates shall be treated as a "grantor
trust" under the Code, for the benefit of the holders of the Class C
Certificates, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Securities Administrator
shall (i) furnish or cause to be furnished to the holders of the Class C
Certificates information regarding their allocable share, if any, of the income
with respect to such grantor trust, (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and
such other forms as may be applicable and (iii) comply with such information
reporting obligations with respect to payments from such grantor trust to the
holders of Class A, Class M, Class B and Class C Certificates as may be
applicable under the Code.
(f) The parties intend that the portion of the Trust Fund consisting
of the right to receive amounts distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the Code, for the benefit of the holders of the Class P Certificates, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Securities Administrator shall (i) furnish or
cause to be furnished to the holders of the Class P Certificates information
regarding their allocable share of the income with respect to such grantor trust
and (ii) file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(g) The parties intend that amounts paid to the Swap Counterparty
under the Swap Agreement shall be deemed for federal income tax purposes to be
paid by the Class C Certificates first, out of funds deemed received in respect
of the Class UT-IO Interest, second, out of funds deemed received in respect of
the Uncertificated Class C Interest and third, out of funds deemed received in
respect of notional principal contracts described in Section 2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this intention. On
each Distribution Date, to the extent that amounts paid to the Swap Counterparty
are deemed paid out of funds received in respect of the Uncertificated Class C
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Interest, such amounts will be treated as distributed by the Upper Tier REMIC to
the Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the Swap Counterparty pursuant to the Swap Agreement.
The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class C Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.
(h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received by the SWAP REMIC
with respect to the Mortgage Loans shall be paid to the SWAP REMIC Regular
Interests until the principal balance of all such interests have been reduced to
zero and any losses allocated to such interests have been reimbursed. Any
available funds remaining in the SWAP REMIC on a Distribution Date after
distributions to the SWAP REMIC Regular Interests shall be distributed to the
Class R Certificates on account of the Class SWR Interest. On each Distribution
Date, the Securities Administrator shall distribute the aggregate Interest Funds
(net of expenses and payments to the Class P Certificates) with respect to each
of the SWAP REMIC Regular Interests based on the interest rates for each such
SWAP REMIC Regular Interest. On each Distribution Date, the Securities
Administrator shall distribute the aggregate Principal Funds with respect to the
Group One Mortgage Loans first to the Class 1-SW1 Interest until its principal
balance is reduced to zero and then sequentially to each of the other SWAP REMIC
Regular Interests beginning with designation "1" in ascending order of their
numerical class designation, in equal amounts to each such class in such
numerical designation, until the principal balance of each such class is reduced
to zero. All losses with respect to the Group One Mortgage Loans shall be
allocated among the SWAP REMIC Regular Interests beginning with the designation
"1" in the same manner that principal distributions are allocated. On each
Distribution Date, the Securities Administrator shall distribute the aggregate
Principal Funds with respect to the Group Two Mortgage Loans first to the Class
2-SW2 Interest until its principal balance is reduced to zero and then
sequentially to each of the other SWAP REMIC Regular Interests beginning with
designation "2" in ascending order of their numerical class designation, in
equal amounts to each such class in such numerical designation, until the
principal balance of each such class is reduced to zero. All losses with respect
to the Group Two Mortgage Loans shall be allocated among the SWAP REMIC Regular
Interests beginning with the designation "2" in the same manner that principal
distributions are allocated. Subsequent Recoveries with respect to the Group One
and Group Two Mortgage Loans shall be allocated in the reverse fashion from the
manner in which losses are allocated.
All payments received by the Lower Tier REMIC with respect to the SWAP
REMIC Regular Interests shall be paid to the Lower Tier REMIC Regular Interests
until the principal balance of all such interests have been reduced to zero and
any losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date,
payments and losses shall be allocated among the Lower Tier REMIC Regular
Interests so that (i) each of the Lower Tier REMIC I Marker Interests shall have
a principal balance equal to 25% of the principal balance of the Corresponding
Certificates, (ii) the Class LTIX Interest has a principal balance equal to the
excess of (x) 50% of the remaining principal balance of the Mortgage Loans over
(y) the aggregate principal balance of the Lower Tier REMIC I Marker Interests
(if necessary to reflect an increase in overcollateralization, accrued and
unpaid interest on the Class LTIX interest may be added to its principal amount
to achieve this result) and (iii) the aggregate principal amount of the Class
LTII1A Interest, Class LTII1B Interest, Class LTII2A Interest, Class LTII2B
Interest and the Class LTIIX Interest shall equal 50% of the remaining principal
balance of the Mortgage Loans. Distributions and losses allocated to the Lower
Tier REMIC Regular Interests described in clause (iii) of the preceding sentence
will be allocated among such
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Xxxxx Xxxx REMIC Regular Interests in the following manner: (x) such
distributions shall be deemed made to such Lower Tier REMIC Regular Interests
first, so as to keep the principal balance of the each such Lower Tier REMIC
Regular Interest with "B" at the end of its designation equal to 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group and second, to such Lower Tier REMIC Regular Interests with "A"
at the end of its designation so that the uncertificated principal balance of
each such Lower Tier REMIC Regular Interest is equal to 0.05% of the excess of
(I) the aggregate scheduled principal balance of the Mortgage Loans in the
related Mortgage Group over (II) the aggregate principal balance of Certificate
Group One, in the case of the Class LTII1A Interest, or Certificate Group Two,
in the case of the Class LTII2A Interest (except that if 0.05% of any such
excess is greater than the principal amount of the related Lower Tier REMIC II
Marker Interest with "A" at the end of its designation, the least amount of
principal shall be distributed to each Lower Tier REMIC II Marker Interest with
"A" at the end of its designation such that the Lower Tier REMIC Subordinated
Balance Ratio is maintained) and finally, any remaining distributions of
principal to the Class LTIIX Interest and (y) such losses shall be allocated
among the Lower Tier REMIC Regular Interests described in clause (iii) of the
preceding sentence first, so as to keep the principal balance of the each such
Lower Tier REMIC Regular Interest with "B" at the end of its designation equal
to 0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group; second, to such Lower Tier REMIC Regular Interests
with "A" at the end of its designation so that the uncertificated principal
balance of each such Lower Tier REMIC Regular Interest is equal to 0.05% of the
excess of (I) the aggregate scheduled principal balance of the Mortgage Loans in
the related Mortgage Group over (II) the aggregate principal balance of
Certificate Group One, in the case of the Class LTII1A Interest, or Certificate
Group Two, in the case of the Class LTII2A Interest (except that if 0.05% of any
such excess is greater than the principal amount of the related Lower Tier REMIC
II Marker Interest with "A" at the end of its designation, the least amount of
losses shall be allocated to each Lower REMIC II Marker Interest with "A" at the
end of its designation such that the Lower Tier REMIC Subordinated Balance Ratio
is maintained) and finally, any remaining losses to the Class LTIIX Interest.
Notwithstanding the preceding two sentences, however, losses not allocated to
any Class of Certificates will not be allocated to any Lower Tier REMIC Regular
Interests. All computations with respect to the Lower Tier REMIC Regular
Interests shall be taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a Distribution
Date after distributions to the Lower Tier REMIC Regular Interests shall be
distributed to the Class R Certificates in respect of the Class LTR Interest.
If on any Distribution Date the Certificate Principal Balance of any Class
of Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amounts of the Lower Tier REMIC Regular Interests, with such
increase allocated (before the making of distributions and the allocation of
losses on the Lower Tier REMIC Regular Interests on such Distribution Date)
among the Lower Tier REMIC Regular Interests so that, to the greatest extent
possible, (i) each of the Lower Tier REMIC I Marker Interests has a principal
balance equal to 25% of the principal balance of the Corresponding Certificates,
(ii) the Class LTIX Interest has a principal balance equal to the excess of (x)
50% of the remaining principal balance of the Mortgage Loans over (y) the
aggregate principal balance of the Lower Tier REMIC I Marker Interests and (iii)
the aggregate principal amount of the Lower Tier REMIC II Marker Interests and
the Class LTIIX Interest shall equal 50% of the remaining principal balance of
the Mortgage Loans. Allocations in connection with clause (iii) shall be made so
that, to the greatest extent possible, (a) the principal balance of each Lower
Tier REMIC II Marker Interest with "B" at the end of its designation equals
0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
related Mortgage Group, (b) the principal balance of each Lower Tier REMIC II
Marker Interest with "A" at the end of its designation equals 0.05% of the
excess of (x) the aggregate scheduled principal balance of the Mortgage Loans in
related
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Mortgage Group over (y) the aggregate principal balance of Certificate Group One
in the case of the Class LTII1A Interest, or Certificate Group Two in the case
of the Class LTII2A Interest and (c) any remaining allocations are made to the
Class LTIIX Interest.
(i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by either Servicer of its
duties and obligations set forth herein, the related Servicer shall indemnify
the NIMs Insurer, the Trustee, the Master Servicer, the Securities Administrator
and the Issuing Entity against any and all Losses resulting from such
negligence; provided, however, that the related Servicer shall not be liable for
any such Losses attributable to the action or inaction of the Trustee, the
Master Servicer, the Securities Administrator, the Depositor or the Holder of
the residual interest in such REMIC, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of the residual interest in
such REMIC on which the related Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of the
residual interest in such REMIC now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the related Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than those
arising out of a negligent performance by the related Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
(j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Securities
Administrator of its duties and obligations set forth herein, the Securities
Administrator shall indemnify the NIMs Insurer, the Trustee and the Issuing
Entity against any and all Losses resulting from such negligence; provided,
however, that the Securities Administrator shall not be liable for any such
Losses attributable to the action or inaction of the Master Servicer, the
Servicers, the Trustee, the Depositor or the Holder of the residual interest in
such REMIC, as applicable, nor for any such Losses resulting from misinformation
provided by the Holder of the residual interest in such REMIC on which the
Securities Administrator has relied. The foregoing shall not be deemed to limit
or restrict the rights and remedies of the Holder of the residual interest in
such REMIC now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Securities Administrator have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than those arising out of a
negligent performance by the Securities Administrator of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
SECTION 2.08. Covenants of the Servicers
Each Servicer hereby covenants to each of the other parties to this
Agreement that such Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy.
SECTION 2.09. Permitted Activities of the Trust
The Issuing Entity is created for the object and purpose of engaging in the
Permitted Activities. In furtherance of the foregoing, the Securities
Administrator is hereby authorized and directed to execute
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and deliver on behalf of the Issuing Entity, and to perform the duties and
obligations of the Issuing Entity under, the Cap Contracts, an insurance and
indemnity agreement with a NIMs Insurer and any other agreement or instrument
related thereto, in each case in such form as the Depositor shall direct or
shall approve, the execution and delivery of any such agreement by the Depositor
to be conclusive evidence of its approval thereof.
SECTION 2.10. Qualifying Special Purpose Entity
For purposes of SFAS 140, the parties hereto intend that the Issuing Entity
shall be treated as a "qualifying special purpose entity" as such term is used
in SFAS 140 and any successor rule thereto and its power and authority as stated
in Section 2.09 of this Agreement shall be limited in accordance with paragraph
35 or SFAS 140.
SECTION 2.11. Depositor Notification of NIM Notes
The Depositor shall notify the Servicers, the Master Servicer, the
Securities Administrator and the Trustee in writing when NIM Notes are issued
and of the identity of the NIMs Insurer, if applicable, and when all previously
issued NIM Notes are no longer outstanding.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicers to Service Mortgage Loans
For and on behalf of the Certificateholders, the Servicers shall service
and administer the related Mortgage Loans in accordance with the Accepted
Servicing Practices. In connection with such servicing and administration, the
Servicers shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.02 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 6.03, the
Servicers shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement except as otherwise required by this Agreement or by
law. Notwithstanding anything in this Agreement to the contrary, the Servicers
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicers shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, each Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the
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Trustee, when such Servicer believes it appropriate in its reasonable judgment,
to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, subordinations and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. Each Servicers shall prepare and deliver to the Depositor,
the Securities Administrator and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable such Servicer to service and administer the Mortgage Loans, to the extent
that such Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor, the Securities Administrator and/or the Trustee shall execute such
documents and deliver them to such Servicer. For purposes of this Section 3.01,
the Trustee hereby grants to each Servicer a limited power of attorney to
execute and file any and all documents necessary to fulfill the obligations of
each Servicer under this Section 3.01.
The Servicers shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicers shall have at least 30 days' notice of the appointment of a
NIMs Insurer prior to being required to deliver any notices pursuant to this
Agreement to such NIMs Insurer.
The Servicers shall deliver a list of Servicing Officers to the Master
Servicer and the Trustee by the Closing Date.
The Servicers will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and for each
Mortgage Loan, each Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
Each Servicer is further authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when such Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS System,
shall be subject to withdrawal by the related Servicer from the related
Collection Account (provided that such expenses constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
With respect to any Mortgage Loan, the related Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
(b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and
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(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
the Servicers
(a) Each Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate, pursuant to a subservicing
agreement (each, a "Subservicing Agreement"); provided, however, that (i) such
subservicing arrangement and the terms of the related Subservicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder, (ii) that such agreement
would not result in a withdrawal or downgrading by any Rating Agency of the
ratings of any Certificates or any of the NIM Notes evidenced by a letter to
that effect delivered by each Rating Agency to the Depositor and the NIMs
Insurer and (iii) the NIMs Insurer shall have consented to such Subservicing
Agreement, which consent shall not be unreasonably withheld. Notwithstanding the
provisions of any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between a Servicer and a
subservicer or reference to actions taken through a subservicer or otherwise,
such Servicer shall remain obligated and liable to the Depositor, the Securities
Administrator, the Master Servicer, the Trustee and the Certificateholders for
the servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the subservicer and to the same extent and under the same
terms and conditions as if such Servicer alone were servicing and administering
the Mortgage Loans. Every Subservicing Agreement entered into by either Servicer
shall contain a provision giving any successor servicer the option to terminate
such agreement, with the consent of the NIMs Insurer (which consent shall not be
unreasonably withheld), in the event a successor servicer is appointed. All
actions of the each subservicer performed pursuant to the related Subservicing
Agreement shall be performed as an agent of the related Servicer with the same
force and effect as if performed directly by such Servicer. The Servicers shall
deliver to the NIMs Insurer and the Master Servicer copies of all Subservicing
Agreements. The Trustee, the Master Servicer and the Securities Administrator
shall have no obligations, duties or liabilities with respect to a subservicer,
including, without limitation, any obligation, duty or liability to monitor such
subservicer or to pay a subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicers shall be deemed to
have received any collections, recoveries or payments with respect to the
related Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the related Servicer.
(c) Each Servicer shall not permit a Subservicer to perform any
servicing responsibilities hereunder with respect to the Mortgage Loans unless
that Subservicer first agrees in writing with the related Servicer to deliver an
Assessment of Compliance and an Accountant's Attestation in such manner and at
such times that permits that related Servicer to comply with Section 3.17 of
this Agreement.
SECTION 3.03. Rights of the Depositor, the Securities Administrator, the
Master Servicer and the Trustee in Respect of the Servicers
None of the Securities Administrator, the Master Servicer, the Trustee or
the Depositor shall have any responsibility or liability for any action or
failure to act by the Servicers, and none of them is obligated to supervise the
performance of the Servicers hereunder or otherwise except with respect to the
Master Servicer, as otherwise expressly provided herein.
SECTION 3.04. Master Servicer to Act as Servicer
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Subject to Sections 6.04, 7.02 and 11.02, in the event that either Servicer
shall for any reason no longer be a servicer hereunder (including by reason of
an Event of Default), the Master Servicer or its designee shall, within a period
of time not to exceed ninety (90) days from the date of notice of termination or
resignation, thereupon assume all of the rights and obligations of such Servicer
hereunder arising thereafter (except that the Master Servicer shall not be (i)
liable for losses arising out of any acts or omissions of the predecessor
servicer hereunder, (ii) obligated to make Advances or Servicing Advances if it
is prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for any expenses of the Servicers
pursuant to Section 2.03 or (v) deemed to have made any representations and
warranties hereunder, including pursuant to Section 2.04 or the first paragraph
of Section 6.02 hereof; provided, however that the Master Servicer (subject to
clause (ii) above) or its designee, in its capacity as the successor servicer,
shall immediately assume the terminated or resigning Servicer's obligation to
make Advances and Servicing Advances). No such termination or resignation shall
affect any obligation of the related Servicer to pay amounts owed under this
Agreement and to perform its duties under this Agreement until its successor
assumes all of its rights and obligations hereunder. If a Servicer shall for any
reason no longer be a servicer (including by reason of any Event of Default),
the Master Servicer (or any other successor servicer) may, at its option,
succeed to any rights and obligations of the related Servicer under any
subservicing agreement in accordance with the terms thereof; provided, however,
that the Master Servicer (or any other successor servicer) shall not incur any
liability or have any obligations in its capacity as a 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 related
Servicer thereunder; and such Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession. To the extent any costs or expenses, including without
limitation, Servicing Transfer Costs incurred by the Master Servicer in
connection with this Section 3.04, Section 7.02 or Section 11.02, are not paid
by the related Servicer pursuant to this Agreement within 30 days of the date of
the Master Servicer's invoice thereof, such amounts shall be payable out of the
Certificate Account; provided that if the related Servicer has been terminated
by reason of an Event of Default, the terminated servicer shall reimburse the
Issuing Entity for any such expense incurred by the Issuing Entity upon receipt
of a reasonably detailed invoice evidencing such expenses. If the Master
Servicer is unwilling or unable to act as a servicer, the Master Servicer shall
seek to appoint a successor servicer that is eligible in accordance with the
criteria specified in this Agreement and reasonably acceptable to the NIMs
Insurer.
The Servicers shall, upon request of the Master Servicer, but at the
expense of the related Servicer if such Servicer has been terminated by reason
of an Event of Default, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Accounts;
Master Servicer Collection Account; Certificate Account
(a) The Servicers shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, each Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below;
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provided, further, that the NIMs Insurer's prior written consent shall be
required for any modification, waiver or amendment after the Cut-off Date if the
aggregate number of outstanding Mortgage Loans which have been modified, waived
or amended exceeds 5% of the number of Mortgage Loans as of the Cut-Off Date. In
the event of any such arrangement pursuant to clause (ii) above, subject to
Section 4.01, the related Servicer shall make any Advances on the related
Mortgage Loan during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of such Servicer, such default is reasonably
foreseeable, such Servicer, consistent with the standards set forth in Section
3.01, may also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in determining
which course of action permitted by this sentence it shall pursue, such Servicer
shall adhere to the standards of Section 3.01. The Servicers' analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of Section 3.01 shall be reflected in writing in the Mortgage File.
(b) The Servicers will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the related Servicer
has not been provided with information sufficient to enable it to collect the
Prepayment Charge, or (iv) in the related Servicer's reasonable judgment as
described in Section 3.01 hereof, (x) such waiver relates to a default or a
reasonably foreseeable default, (y) such waiver would maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and related
Mortgage Loan and (z) doing so is standard and customary in servicing similar
Mortgage Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default), or (v) the collection of the Prepayment Charge or of a
similar type of prepayment premium would be considered "predatory" or "illegal"
pursuant to written guidance published by any applicable federal, state or local
regulatory authority having jurisdiction over such matters or has been
challenged by any such authority, or (vi) only to the extent that the Depositor
has notified the related Servicer that there are no NIM Notes outstanding, there
is a certified class action in which a similar type of prepayment premium is
being challenged. Except as provided in the preceding sentence, in no event will
the related Servicer waive a Prepayment Charge in connection with a refinancing
of a Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If a Servicer waives or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of such Servicer, other than as provided above, such
Servicer shall deposit the amount of such Prepayment Charge (or such portion
thereof as had been waived for deposit) into the related Collection Account for
distribution in accordance with the terms of this Agreement.
(c) The Servicers shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
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(d) Each Servicer shall establish and maintain, in the name of the
Trustee for the benefit of the Certificateholders, a Collection Account. Each
Servicer shall deposit into such Collection Account daily, within two Business
Days of receipt thereof, in immediately available funds, the following payments
and collections received or made by it on and after the Cut-off Date with
respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the
Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans net of
the Servicing Fee permitted under Section 3.15, other than (x) interest due
on the Mortgage Loans on or prior to the Cut-off Date and (y) Prepayment
Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the related Servicer's normal servicing
procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by such Servicer pursuant to
Section 3.05(g) in connection with any losses on Permitted Investments;
(vii) any amounts required to be deposited by such Servicer pursuant
to Section 3.10 hereof;
(viii) all Advances made by such Servicer pursuant to Section 4.01;
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicers into the related
Collection Accounts shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and other similar ancillary fees (other than
Prepayment Charges) if collected, and any Prepayment Interest Excess) need not
be remitted by the Servicers. Rather, such fees and charges may be retained by
the Servicers as additional servicing compensation. In the event that a Servicer
shall remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the Securities Administrator, or such other institution maintaining the
related Collection Account, to withdraw such amount from the related Collection
Account, any provision herein to the contrary notwithstanding. The Servicers
shall maintain adequate records with respect to all withdrawals made pursuant to
this Section. All funds deposited in the Collection Accounts shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
3.08. In no event shall the Trustee, the Securities Administrator or the Master
Servicer incur liability for withdrawals from the related Collection Account at
the direction of the related Servicer.
The Servicers shall give notice to the NIMs Insurer, the Master Servicer,
the Securities Administrator and the Trustee of the location of the Collection
Account maintained by it when established
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and prior to any change thereof. Not later than twenty days after each
Distribution Date, the Servicers shall forward to the NIMs Insurer, Master
Servicer, the Securities Administrator, the Trustee and the Depositor the most
current available bank statement for the Collection Accounts. Copies of such
statement shall be provided by the Securities Administrator to any
Certificateholder and to any Person identified to the Securities Administrator
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the related Servicer
to the Securities Administrator.
(e) The Master Servicer shall establish and maintain, in the name of
the Trustee for the benefit of the Certificateholders, the Master Servicer
Collection Account. The Master Servicer shall, promptly upon receipt, deposit or
cause to be deposited in the Master Servicer Collection Account and retain
therein the following:
(i) the aggregate amount withdrawn by the Servicers from the
Collection Accounts for deposit in the Master Servicer Collection Account;
and
(ii) any amounts received by or on behalf of the Master Servicer and
required to be deposited in the Master Servicer Collection Account.
Any amounts received by the Master Servicer prior to 4:00 p.m. New York
City time (or such earlier deadline for investment in the Permitted Investments
designated by the Securities Administrator) which are required to be deposited
in the Master Servicer Collection Account by the Servicers may be invested for
the benefit of the Master Servicer in Permitted Investments on the Business Day
on which they were received. The requirements for remittance by the Servicers in
Section 3.08 hereof and deposit by the Master Servicer into the Master Servicer
Collection Account shall be exclusive. If a Servicer fails to remit any funds
due by the time designated herein, the Servicer shall pay to the Master
Servicer, for its own account, interest accrued on such funds at the prime rate
as set forth in The Wall Street Journal from and including the applicable due
date, to but excluding the day such funds are paid to the Master Servicer. In
the event that a Servicer shall remit any amount not required to be remitted and
not otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at
any time withdraw or direct the Master Servicer, or such other institution
maintaining the Master Servicer Collection Account, to withdraw such amount from
the Master Servicer Collection Account, any provision herein to the contrary
notwithstanding. All funds deposited in the Master Servicer Collection Account
shall be held by the Master Servicer in trust for the Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the Master Servicer
incur liability for withdrawals from the Master Servicer Collection Account at
the direction of a Servicer. The Master Servicer shall give notice to each
Servicer of the location of the Master Servicer Collection Account maintained by
it when established and prior to any change thereof.
The Master Servicer shall give notice to the NIMs Insurer, the Securities
Administrator and the Trustee of the location of the Master Servicer Collection
Account maintained by it when established and prior to any change thereof. Not
later than twenty days after each Distribution Date, the Master Servicer shall
forward to the NIMs Insurer, the Securities Administrator, the Trustee and the
Depositor the most current available bank statement for the Master Servicer
Collection Account. Copies of such statement shall be provided by the Securities
Administrator to any Certificateholder and to any Person identified to the
Securities Administrator as a prospective transferee of a Certificate, upon
request at the expense of the requesting party, provided such statement is
delivered by the Master Servicer to the Securities Administrator.
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(f) The Securities Administrator shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account. The Securities
Administrator shall, promptly upon receipt, deposit or cause to be deposited in
the Certificate Account and retain therein the following:
(i) the aggregate amount withdrawn by the Master Servicer from the
Master Servicer Collection Account for deposit in the Certificate Account;
(ii) the Purchase Price and any Substitution Adjustment Amount;
(iii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iv) the Optional Termination Amount paid by the winning bidder at the
Auction or by Wilshire pursuant to Section 9.01.
Any amounts received by the Securities Administrator prior to 4:00 p.m. New
York City time (or such earlier deadline for investment in the Permitted
Investments designated by the Securities Administrator) which are required to be
deposited in the Certificate Account by the Master Servicer may be invested for
the benefit of the Securities Administrator in Permitted Investments on the
Business Day on which they were received. The foregoing requirements for
remittance by the Master Servicer and deposit by the Securities Administrator
into the Certificate Account shall be exclusive. If the Master Servicer fails to
remit any funds due by the time designated herein, the Servicers or Master
Servicer shall pay to the Securities Administrator, for its own account,
interest accrued on such funds at the prime rate as set forth in The Wall Street
Journal from and including the applicable due date, to but excluding the day
such funds are paid to the Securities Administrator. In the event that the
Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. All funds deposited in the Certificate Account
shall be held by the Securities Administrator in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Securities
Administrator incur liability for withdrawals from the Certificate Account at
the direction of the Master Servicer. The Securities Administrator shall give
notice to the NIMs Insurer and the Master Servicer of the location of the
Certificate Account maintained by it when established and prior to any change
thereof.
(g) Each institution that maintains a Collection Account, the Master
Servicer Collection Account and the Certificate Account may but shall not be
required to, invest the funds in each such account, as directed by the
Servicers, the Master Servicer or the Securities Administrator, as applicable,
in writing, in Permitted Investments, which shall mature not later than (i) in
the case of the Collection Accounts, the Business Day preceding the related
Servicer Remittance Date (except that if such Permitted Investment is an
obligation of the institution that maintains such Collection Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than the Servicer Remittance Date) (iii) in the case of the Master
Servicer Collection Account, one Business Day prior to the Distribution Date (or
such other time as may be mutually agreed to between the Master Servicer and the
Securities Administrator so long as such time it is not later than one Business
Day prior to the Distribution Date) and (iii) in the case of the Certificate
Account, the Business Day immediately preceding the first Distribution Date that
follows the date of such investment (except that if such Permitted Investment is
an obligation of the institution that maintains such Certificate Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the related Servicer, the Master Servicer or the
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Securities Administrator, as applicable, for the benefit of the
Certificateholders. All income and gain net of any losses realized from amounts
on deposit in the Collection Accounts shall be for the benefit of the related
Servicer as servicing compensation and shall be remitted to it monthly as
provided herein. All income and gain net of any losses realized from amounts on
deposit in the Master Servicer Collection Account shall be for the benefit of
the Master Servicer as servicing compensation and shall be remitted to it
monthly as provided herein. The amount of any losses incurred in the Collection
Accounts in respect of any such investments shall be deposited by the related
Servicer in the related Collection Account out of such Servicer's own funds
immediately as realized. The amount of any losses incurred in the Master
Servicer Collection Account in respect of any such investments shall be
deposited by the Master Servicer in the Master Servicer Collection Account out
of the Master Servicers Servicer's own funds immediately as realized. All income
and gain net of any losses realized from amounts on deposit in the Certificate
Account shall be for the benefit of the Securities Administrator and shall be
remitted to or withdrawn by it monthly as provided herein. The amount of any
losses incurred in the Certificate Account in respect of any such investments
shall be deposited by the Securities Administrator in the Certificate Account
out of the Securities Administrator's own funds immediately as realized.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts
To the extent required by the related Mortgage Note, the related Servicer
shall establish and maintain one or more accounts (each, an "Escrow Account")
and deposit and retain therein all collections from the Mortgagors (or advances
by the related Servicer) for the payment of taxes, assessments, hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Servicers to compel a Mortgagor to establish an Escrow Account
in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
related Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans
Upon reasonable advance notice in writing if required by federal
regulation, each Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that such Servicer shall be entitled
to be reimbursed by each such Certificateholder for actual expenses incurred by
such Servicer in providing such reports and access.
The Servicers may from time to time provide the Depositor, and any Person
designated by the Depositor, with reports and information regarding the Mortgage
Loans, including without limitation, information requested by the Depositor or
an originator of the Mortgage Loans for required institutional risk control. In
addition, subject to limitations of applicable privacy laws, the Servicers may
make public information regarding performance of the Mortgage Loans.
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SECTION 3.08. Permitted Withdrawals from the Collection Accounts, Master
Servicer Collection Account and Certificate Account
(a) The Servicers may from time to time, make withdrawals from the
related Collection Account for the following purposes:
(i) to pay to the related Servicer (to the extent not previously paid
to or withheld by such Servicer), as servicing compensation in accordance
with Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment
was made, and, as additional servicing compensation, those other amounts
set forth in Section 3.15;
(ii) to reimburse the related Servicer (including the Master Servicer
as Successor Servicer) for Advances made by it (or to reimburse the advance
financing person for Advances made by it) with respect to the Mortgage
Loans, such right of reimbursement pursuant to this subclause (ii) being
limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds) that represent late recoveries of
payments of principal and/or interest on such particular Mortgage Loan(s)
in respect of which any such Advance was made;
(iii) to reimburse the related Servicer and the Master Servicer (in
its capacity as successor Servicer) for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made
to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the related Servicer earnings on or investment income
with respect to funds in or credited to the related Collection Account;
(v) to reimburse the related Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) [reserved];
(vii) to pay the related Servicer (or the Master Servicer as
successor) any unpaid Servicing Fees and to reimburse it (or Master
Servicer as Successor Servicer) for any unreimbursed Servicing Advances (to
the extent that reimbursement for Servicing Advances would constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)), the related Servicer's right to reimbursement of
Servicing Advances pursuant to this subclause (vii) with respect to any
Mortgage Loan being limited to amounts received on particular Mortgage
Loan(s)(including, for this purpose, Liquidation Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.06;
(viii) to pay to the Depositor or the related Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts
received thereon and not taken into account in determining the related
Stated Principal Balance of such repurchased Mortgage Loan;
(ix) to reimburse the Servicers, the Master Servicer, the Securities
Administrator or the Depositor for expenses incurred by any of them in
connection with the Mortgage Loans or Certificates and reimbursable
pursuant to Section 3.04, Section 3.25 or Section 6.03 hereof
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provided that reimbursement therefor would constitute "unanticipated"
expenses within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii);
(x) to reimburse the Trustee for expenses reasonably incurred in
respect of a breach or defect giving rise to the purchase obligation in
Section 2.03 that were incurred in the Purchase Price of the Mortgage Loans
including any expenses arising out of the enforcement of the purchase
obligation; provided that any such expenses will be reimbursable under this
subclause (x) only to the extent that such expenses would constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for herein;
(xi) to pay the related Servicer any unpaid Servicing Fees for any
Mortgage Loan upon such Mortgage Loan being charged off and upon
termination of the obligations of such Servicer;
(xii) to withdraw pursuant to Section 3.05 any amount deposited in the
related Collection Account and not required to be deposited therein; and
(xiii) to clear and terminate the Collection Accounts upon termination
of this Agreement pursuant to Section 9.01 hereof.
In addition, the Servicers will use commercially reasonable efforts to
cause to be withdrawn from the related Collection Account no later than 12:00
p.m. New York City time, but in any case no later than 2:00 p.m. New York City
time on the Servicer Remittance Date, the Interest Funds and the Principal Funds
(for this purpose only, neither Interest Funds nor Principal Funds shall include
a deduction for any amount reimbursable to the Master Servicer, the Trustee and
the Securities Administrator unless such amounts have actually been reimbursed
from such funds at the discretion of the related Servicer), to the extent on
deposit, and such amount shall be deposited in the Master Servicer Collection
Account; provided, however, if the Master Servicer does not receive such
Interest Funds and Principal Funds by 2:00 p.m. on the Servicer Remittance Date,
the related Servicer shall pay, out of its own funds, interest on such amount at
a rate equal to the "prime rate" as published by The Wall Street Journal at such
time for each date or part thereof.
Each Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account.
Each Servicer shall provide written notification to the Master Servicer on
or prior to the next succeeding Servicer Remittance Date upon making any
withdrawals from the related Collection Account, the Master Servicer Collection
Account pursuant to subclauses (iii) and (vii) above.
Unless otherwise specified, any amounts reimbursable to the Servicers,
Master Servicer or the Master Servicer or Securities Administrator from amounts
on deposit in the Collection Accounts or the Certificate Account shall be deemed
to come from first, Interest Funds, and thereafter, Principal Funds for the
related Distribution Date.
(b) The Master Servicer may, from time to time on demand of the
Securities Administrator, make or cause to be made such withdrawals or transfers
from the Master Servicer Collection Account as the Securities Administrator has
designated for such transfer in the manner specified in this Agreement.
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On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to this Agreement,
(ii) any amounts reimbursable to the Master Servicer for Advances or Servicing
Advances made by the Master Servicer pursuant to Section 7.01 or 3.04, and
(iii) any amounts payable to the Master Servicer as set forth in Section 11.07.
In addition, on or before each Distribution Date, the Master Servicer shall
deposit in the Certificate Account (or remit to the Securities Administrator for
deposit therein) any Advances required to be made by the Master Servicer with
respect to the Mortgage Loans.
No later than 3:00 p.m. New York time on each Deposit Date, the Master
Servicer will transfer all Available Funds on deposit in the Master Servicer
Collection Account with respect to the related Distribution Date to the
Securities Administrator for deposit in the Certificate Account.
(c) The Securities Administrator shall withdraw funds from the
Certificate Account for distribution to the Certificateholders in the manner
specified in this Agreement (and shall withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to this
Agreement). In addition, prior to making such distributions to the
Certificateholders, the Securities Administrator may from time to time make
withdrawals from the Certificate Account for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in the
Certificate Account and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon termination
of the Agreement pursuant to Section 9.01 hereof (after paying all amounts
necessary to the Trustee, the Securities Administrator, the Master Servicer
or the Servicers in connection with any such termination);
(iii) to reimburse the Securities Administrator, the Master Servicer
or the Trustee for any fees, expenses and indemnification reimbursable
pursuant to this Agreement, including without limitation Sections 3.04,
6.03, 8.05, 8.06 and 11.02 hereof; and
(iv) to pay to the Securities Administrator earnings on or investment
income with respect to funds in or credited to the Certificate Account.
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance
Each Servicer shall cause to be maintained, for each first lien Mortgage
Loan, hazard insurance with extended coverage in an amount, to the extent
permitted by applicable law, that is at least equal to the lesser of (i) the
estimated replacement value of the improvements that are part of such Mortgaged
Property which may be the last known coverage, and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such policy shall be sufficient to prevent the related Mortgagor
and/or mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. Each Servicer shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any Mortgage Loan, to the extent required under the standards described
below. Pursuant to Section 3.05 hereof, any amounts collected by such Servicer
under any such policies (other than the amounts to be applied to the restoration
or repair of the related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with the related Servicer's normal
servicing procedures) shall be deposited in the related Collection Account.
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Any cost incurred by the Servicers in maintaining any such insurance shall not,
for the purpose of calculating monthly distributions to the Certificateholders
or remittances to the Securities Administrator for their benefit, be added to
the principal balance of the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. Such costs shall be recoverable by the Servicers
out of late payments by the related Mortgagor or out of Liquidation Proceeds to
the extent and as otherwise permitted by Section 3.08 hereof. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage other
than pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If a first lien Mortgaged
Property is located at the time of origination of the Mortgage Loan in a
federally designated special flood hazard area and such area is participating in
the national flood insurance program, the related Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the outstanding
principal balance of the related Mortgage Loan, (ii) the estimated replacement
value of the improvements that are part of such Mortgaged Property which may be
the last known coverage, or (iii) the maximum amount of such insurance available
for the related Mortgaged Property under the Flood Disaster Protection Act of
1973, as amended.
In the event that a Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the related Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3.10, and there shall
have been a loss that would have been covered by such policy, deposit in the
related Collection Account the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as a
servicer of the Mortgage Loans, each Servicer agrees to present, on behalf of
itself, the Depositor, the Master Servicer, the Securities Administrator and the
Trustee for the benefit of the Certificateholders, claims under any such blanket
policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the related Servicer shall, except as set forth below, to the extent
it has knowledge of such conveyance or prospective conveyance, exercise its
rights to accelerate the maturity of the related Mortgage Loan under any
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
provided, however, that the related Servicer shall not exercise any such right
if the "due-on-sale" clause, in the reasonable belief of such Servicer, is not
enforceable under applicable law; provided, further, that such Servicer shall
not take any action in relation to the enforcement of any "due-on-sale" clause
that would adversely affect or jeopardize coverage under any Required Insurance
Policy. An Opinion of Counsel at the expense of the related Servicer (which
expense shall constitute a Servicing Advance) delivered to the Trustee, the
Master Servicer, the Securities Administrator and the Depositor shall
conclusively establish the reasonableness of the related Servicer's belief that
any "due-on-sale" clause is not enforceable under applicable law. In such event,
the related Servicer shall make reasonable efforts to enter into an assumption
and modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the related Servicer is authorized to enter into a substitution
of liability agreement with such Person, pursuant to which the original
Mortgagor is released from liability and such Person is substituted as Mortgagor
and becomes liable under the Note. In addition to the foregoing, the related
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Servicer shall not be required to enforce any "due-on-sale" clause if in the
reasonable judgment of such Servicer, entering into an assumption and
modification agreement with a Person to whom such property shall be conveyed and
releasing the original Mortgagor from liability would be in the best interests
of the Certificateholders. The Mortgage Loan, as assumed, shall conform in all
respects to the requirements, representations and warranties of this Agreement.
The related Servicer shall notify the Trustee, the Master Servicer and the
Securities Administrator that any such assumption or substitution agreement has
been completed by forwarding to the Custodian on behalf of the Trustee the
original copy of such assumption or substitution agreement (indicating the
Mortgage File to which it relates), which copy shall be added by the Custodian
on behalf of the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The related
Servicer shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the related Servicer for consenting
to any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to such Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicers shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicers may be
restricted by law from preventing, for any reason whatsoever.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation
(a) The Servicers shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the related Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the related Servicer shall not be required to expend its own funds
in connection with the restoration of any property that shall have suffered
damage due to an uninsured cause unless it shall determine (i) that such
restoration will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the related Collection Account
pursuant to Section 3.08 hereof). The related Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 3.08
hereof. If the related Servicer receives written notice that a Mortgaged
Property that it is contemplating acquiring in foreclosure or by deed-in-lieu of
foreclosure is located within a one-mile radius of any site with environmental
or hazardous waste risks known to the related Servicer, such Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the related Servicer shall either
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itself or through an agent selected by such Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as such Servicer deems to be in the best interest of
itself and the Certificateholders for the period prior to the sale of such REO
Property. The related Servicer or an Affiliate thereof may receive usual and
customary real estate referral fees for real estate brokers in connection with
the listing and disposition of REO Property. The related Servicer shall prepare
a statement with respect to each REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable such Servicer to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the related Collection Account no later than the
close of business on each Determination Date. The related Servicer shall perform
the tax reporting and withholding related to foreclosures, abandonments and
cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the related Servicer shall dispose of such Mortgaged Property
prior to the expiration of three years from the end of the year of its
acquisition by the Issuing Entity or, at the expense of the Issuing Entity,
obtain, in accordance with applicable procedures for obtaining an automatic
extension of the grace period, more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period, in which case such property must be disposed of prior to the end of such
extension, unless the Trustee and the NIMs Insurer shall have been supplied with
an Opinion of Counsel (such Opinion of Counsel not to be an expense of the
Trustee, Master Servicer, Securities Administrator or the NIMs Insurer), to the
effect that the holding by the Issuing Entity of such Mortgaged Property
subsequent to such three-year period or extension will not result in the
imposition of taxes on "prohibited transactions" of the Issuing Entity or any of
the REMICs provided for herein as defined in section 860F of the Code or cause
any of the REMICs provided for herein to fail to qualify as a REMIC at any time
that any Certificates are outstanding, in which case the Issuing Entity may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel). Notwithstanding any other provision of this Agreement,
no Mortgaged Property acquired by the Issuing Entity shall be held, rented (or
allowed to continue to be rented) or otherwise used for the production of income
by or on behalf of the Issuing Entity in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Issuing Entity or any REMIC provided for herein to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of the Code or otherwise, unless the related
Servicer or the Depositor has agreed to indemnify and hold harmless the Trustee
and the Trust Fund with respect to the imposition of any such taxes.
The decision of a Servicer to foreclose on a defaulted Mortgage Loan shall
be subject to a determination by such Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
related Servicer for expenses incurred (including any property or other taxes)
in connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into
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the related Collection Account. To the extent the income received during a
Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Master Servicer and related Servicer as provided above, shall
be deposited in the Master Servicer Collection Account on the next succeeding
Determination Date following receipt thereof for distribution on the related
Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting from
a partial collection of Liquidation Proceeds, will be applied as between the
parties in the following order of priority: first, to reimburse the related
Servicer for any related unreimbursed Servicing Advances and unpaid Servicing
Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse
such Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or
this Section 3.12; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan, at the Net Mortgage
Rate to the Due Date occurring in the month in which such amounts are required
to be distributed; fourth, as a recovery of principal of the Mortgage Loan; and
fifth, to any prepayment charges.
The proceeds of any net income from an REO Property will be applied as
between the parties in the following order of priority: first, to reimburse the
related Servicer for any related unreimbursed Servicing Advances and unpaid
Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to
reimburse the related Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, as a recovery of principal; and
fourth, to accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the related REO Property, at the applicable Net Mortgage
Rate to the Due Date occurring in the month in which such amounts are required
to be distributed.
(b) On each Determination Date, the related Servicer shall determine
the respective aggregate amounts of Excess Proceeds, if any, that occurred in
the related Prepayment Period.
(c) [RESERVED]
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the related Servicer will decide, in its reasonable
business judgment, whether to (i) foreclose upon the Mortgaged Properties
securing those Mortgage Loans pursuant to Section 3.12(a), (ii) write off the
unpaid principal balance of the Mortgage Loans as bad debt (provided that the
related Servicer has determined that no net recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgaged Property),
(iii) take a deed in lieu of foreclosure, (iv) accept a short sale or short
refinance; (v) arrange for a repayment plan or refinancing, or (vi) agree to a
modification of such Mortgage Loan. As to any Mortgage Loan that becomes 120
days delinquent, the related Servicer shall have obtained or shall obtain a
broker's price opinion, the cost of which will be reimbursable as a Servicing
Advance. After obtaining the broker's price opinion, the related Servicer will
determine, in its reasonable business judgment, whether a net recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgage Property. If the related Servicer determines that no such recovery is
possible, it must charge off the related Mortgage Loan at the time it becomes
180 days delinquent. Once a Mortgage Loan has been charged off, the related
Servicer will discontinue making Advances, such Servicer will not be entitled to
future Servicing Fees (except as provided below) with respect to such Mortgage
Loan, and the Mortgage Loan will be treated as a Liquidated Loan. If the related
Servicer determines that such net recovery is possible through foreclosure
proceedings or other liquidation of the related Mortgaged
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Property on a Mortgage Loan that becomes 180 days delinquent, such Servicer need
not charge off the Mortgage Loan and may continue making Advances, such Servicer
will continue to be entitled to Servicing Fees, and such Servicer will be
required to notify the Securities Administrator, the Trustee and the Master
Servicer of such decision.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the related Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
related Servicer will be entitled to Servicing Fees and reimbursement of
expenses in connection with such Mortgage Loans after the date of charge off,
only to the extent of funds available from any recoveries on any such Mortgage
Loans. Any such Mortgage Loans serviced in accordance with the specialized
collection procedures shall be serviced for approximately six months. Any net
recoveries received on such Mortgage Loans during such six month period will be
treated as Subsequent Recoveries. On the date which is six months after the date
on which the related Servicer begins servicing such Mortgage Loans using the
specialized collection procedures, unless specific net recoveries are
anticipated by such Servicer on a particular Mortgage Loan, such charged off
loan will be released to the majority holder of the Class C Certificates and
thereafter, (i) the majority holder of the Class C Certificates, as identified
with contact information in writing to the related Servicer by the Depositor,
will be entitled to any amounts subsequently received in respect of any such
released loans, subject to the related Servicer's fees described below, (ii) the
majority holder of the Class C Certificates may designate any servicer to
service any such released loan, (iii) the majority holder of the Class C
Certificates may sell any such released loan to a third party and (iv) to the
extent the servicing of such charged off loan is not transferred from the
related Servicer, the servicing of such charged off loan and the fees therefor
shall be governed by the most current servicing agreement between such Servicer
and the Sponsor.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files
Upon the payment in full of any Mortgage Loan, or the receipt by a Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, such Servicer will promptly notify the Trustee or the
Custodian on its behalf by delivering a Request for Release substantially in the
form of Exhibit I. Upon receipt of a copy of such request, the Trustee or the
Custodian on its behalf shall promptly release the related Mortgage File to the
related Servicer, the cost of which may be charged to such Servicer by the
Trustee or the Custodian on its behalf, and such Servicer is authorized to cause
the removal from the registration on the MERS System of any such Mortgage if
applicable, and the related Servicer, on behalf of the Trustee shall execute and
deliver the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
together with the Mortgage Note with written evidence of cancellation thereon.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Mortgagor to the extent permitted by
law, and otherwise to the Trust Fund to the extent such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulations Section
1.860G-(1)(b)(3)(ii). From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee or the Custodian on its behalf shall, upon delivery to the
Trustee or the Custodian on its behalf of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
related Servicer, and the cost of delivery of the Mortgage File may be charged
to such Servicer by the Trustee or the Custodian on its behalf. Subject to the
further limitations set forth below, the related Servicer shall cause the
Mortgage File or documents so released to be returned to the Trustee or the
Custodian on its behalf when the need therefor by such
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Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the related Collection Account.
Each Request for Release may be delivered to the Trustee or the Custodian
on its behalf (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the related Servicer and the Trustee or the Custodian on its behalf shall
mutually agree. The Trustee or the Custodian on its behalf shall release the
related Mortgage File(s) within four Business Days of receipt of a properly
completed Request for Release pursuant to clauses (i), (ii) or (iii) above.
Receipt of a properly completed Request for Release shall be authorization to
the Trustee or the Custodian on its behalf to release such Mortgage Files,
provided the Trustee or the Custodian on its behalf has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the related Servicer, and so long as the Trustee or the
Custodian on its behalf complies with its duties and obligations under this
Agreement. If the Trustee or the Custodian on its behalf is unable to release
the Mortgage Files within the period previously specified, the Trustee or the
Custodian on its behalf shall immediately notify the related Servicer indicating
the reason for such delay. The related Servicer shall not pay penalties or
damages due to the Trustee's or the Custodian's on its behalf negligent failure
to release the related Mortgage File or the Trustee's or the Custodian's on its
behalf negligent failure to execute and release documents in a timely manner,
and such amounts shall be Servicer Advances.
On each day that a Servicer remits to the Trustee or the Custodian on its
behalf Requests for Releases pursuant to clauses (ii) or (iii) above, such
Servicer shall also submit to the Trustee or the Custodian on its behalf a
summary of the total number of such Requests for Releases requested on such day
by the same method as described in such clauses (ii) and (iii) above.
If a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, such Servicer
may deliver or cause to be delivered to the Trustee, for signature, or execute
any court pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the related Servicer shall cause possession of
any Mortgage File or of the documents therein that shall have been released by
the Trustee or the Custodian on its behalf to be returned to the Trustee or the
Custodian on its behalf promptly after possession thereof shall have been
released by the Trustee or the Custodian on its behalf unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the related Collection Account, and the related
Servicer shall have delivered to the Trustee or the Custodian on its behalf a
Request for Release in the form of Exhibit I or (ii) the Mortgage File or
document shall have been delivered to an attorney or to a public trustee or
other public official as required by law for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
and the related Servicer shall have delivered to the Trustee or the Custodian on
its behalf an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicers to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicers 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 Accounts, shall
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be held by the related Servicer for and on behalf of the Trustee and shall be
and remain the sole and exclusive property of the Trust Fund, subject to the
applicable provisions of this Agreement. The Servicers also agree that they
shall not create, incur or subject any Mortgage File or any funds that are
deposited in the relevant Collection Account, Master Servicer Collection
Account, Certificate Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee, Master Servicer or
Securities Administrator for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Servicers shall be entitled to set
off against and deduct from any such funds any amounts that are properly due and
payable to such Servicer under this Agreement.
SECTION 3.15. Servicing Compensation
As compensation for its activities hereunder, each Servicer shall be
entitled to retain or withdraw from the relevant Collection Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property) and similar fees
payable by the Mortgagor, Prepayment Interest Excess, all income and gain net of
any losses realized from Permitted Investments in the relevant Collection
Account, shall be retained by the related Servicer to the extent not required to
be deposited in the relevant Collection Account pursuant to Sections 3.05 or
3.12(a) hereof. Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided in this
Agreement. In no event shall the Trustee, the Master Servicer or the Securities
Administrator be liable for any Servicing Fee or for any differential between
the Servicing Fee and the amount necessary to induce a successor servicer to act
as successor servicer under this Agreement.
SECTION 3.16. Access to Certain Documentation
Each Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, as
applicable, access to the documentation regarding the Mortgage Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the related Servicer designated by it
provided, that such Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the related Servicer in
providing such reports and access. Nothing in this Section shall limit the
obligation of the Servicers to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of such Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section. Upon reasonable advance notice to the
applicable Servicer, the Trustee, the Securities Administrator and the Master
Servicer shall have the right to inspect and examine the books and records of a
Servicer with respect to the Mortgage Loans.
SECTION 3.17. Annual Statement as to Compliance
Not later than (a) March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) or (b) with respect to any calendar
year during which an annual report on Form 10-K
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is not required to be filed pursuant to Section 3.20 on behalf of the Issuing
Entity, by April 15 of each calendar year (or if such day is not a Business Day,
the immediately succeeding Business Day), each Servicer shall deliver to the
Master Servicer, the Securities Administrator and the Depositor, an Officer's
Certificate in the form attached hereto as Exhibit U stating, as to each
signatory thereof, that (i) a review of the activities of such Servicer during
the preceding calendar year and of the performance of such Servicer under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, the such Servicer has
fulfilled all its obligations under this Agreement in all material respects
throughout such year or a portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof. With respect to
any Subservicer that meets the criteria of Item 1108(a)(2)(i) through (iii) of
Regulation AB, the related Servicer shall deliver, on behalf of that
Subservicer, the Officer's Certificate set forth in this Section 3.17 as and
when required with respect to such Subservicer. Copies of such statement shall
be provided by the Securities Administrator to any Certificateholder upon
written request at the Certificateholder's expense, provided such statement has
been delivered by the related Servicer to the Securities Administrator.
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements
(a) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), each Servicer, at its own expense, shall deliver to
the Master Servicer, Securities Administrator and the Depositor an officer's
assessment of its compliance with the Servicing Criteria during the preceding
calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB (the "Assessment of Compliance"), which assessment
shall be substantially in the form of Exhibit R hereto.
(b) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), each Servicer, at its own expense, shall cause a nationally or
regionally recognized firm of independent registered public accountants (who may
also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Securities Administrator, the Master
Servicer and the Depositor that attests to and reports on the Assessment of
Compliance provided by such Servicer pursuant to Section 3.18(a) (the
"Accountant's Attestation"). Such Accountant's Attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act.
(c) Each Servicer shall cause any Subservicer and each Subcontractor
(unless, in the case of any Subcontractor, the Depositor has notified the
related Servicer, the Master Servicer and the Securities Administrator in
writing that such compliance statement is not required by Regulation AB) to
deliver not later than March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Issuing Entity's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, to the Securities Administrator, the Master Servicer and the
Depositor an Assessment of Compliance, which assessment shall be substantially
in the form of Exhibit R hereto. Each Servicer shall cause any Subservicer
(other than the calendar year during which the Closing Date occurs) with respect
to
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any calendar year during which the Issuing Entity's annual report on Form 10-K
is not required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, by April 15 of each calendar year (or, in
each case, if such day is not a Business Day, the immediately succeeding
Business Day) to deliver to the Securities Administrator, the Master Servicer
and the Depositor an Assessment of Compliance, which assessment shall be
substantially in the form of Exhibit R hereto.
(d) Not later than March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, each Servicer shall cause each Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the Master Servicer and related Servicer in writing that such
compliance statement is not required by Regulation AB) to deliver to the Master
Servicer, the Securities Administrator and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section 3.18(c) above. Other than
the calendar year during which the Closing Date occurs, with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, not later than April 15 of each calendar year
(or, in each case, if such day is not a Business Day, the immediately succeeding
Business Day), the related Servicer shall cause each Subservicer to deliver to
the Master Servicer, Securities Administrator and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section 3.18(c) above.
(e) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Master Servicer and the
Securities Administrator shall deliver to the Depositor and the Securities
Administrator an Assessment of Compliance with regard to the Servicing Criteria
applicable to the Securities Administrator during the preceding calendar year,
which assessment shall be substantially in the form of Exhibit R hereto
(provided however, that the Master Servicer need not provide such information to
the Securities Administrator so long as the Master Servicer and Securities
Administrator are the same Person).
(f) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Agreement is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Master Servicer and the
Securities Administrator shall deliver to the Depositor and the Securities
Administrator an Accountant's Attestation by a registered public accounting firm
that attests to, and reports on, the Assessment of Compliance pursuant to
Section 3.18(e) above (provided however, that the Master Servicer need not
provide such information to the Securities Administrator so long as the Master
Servicer and Securities Administrator are the same Person).
(g) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, 15 calendar days before the date on which the Issuing Entity's
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annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission (or, in each case,
if such day is not a Business Day, the immediately preceding Business Day), the
Depositor shall cause the Custodian to deliver to the Depositor, the Master
Servicer and the Securities Administrator an Assessment of Compliance with
regard to the Servicing Criteria applicable to the Custodian during the
preceding calendar year, which assessment shall be substantially in the form of
Exhibit R hereto.
(h) Not later than March 12 (or, in each case, if such day is not a
Business Day, the immediately succeeding Business Day), of any calendar year
(other than the calendar year during which the Closing Date occurs) during which
the Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, the Depositor shall cause the Custodian to deliver to the Depositor,
the Master Servicer and the Securities Administrator an Accountant's Attestation
by a registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(g) above.
(i) [Reserved].
(j) [Reserved].
(k) The Depositor agrees to cause the Custodian to indemnify and hold
harmless the Trustee, the Master Servicer, the Securities Administrator the
Depositor and the Servicers and each Person, if any, who "controls" the Trustee,
the Master Servicer, the Securities Administrator, the Depositor or the
Servicers within the meaning of the Securities Act and its officers, directors
and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain arising out of third
party claims based on (i) the failure of such custodian to deliver when required
any information required of it pursuant to Section 3.18 or 3.20 or (ii) any
material misstatement or omission contained in any information provided on its
behalf pursuant to Section 3.18 or 3.20.
(l) Copies of such Assessments of Compliance and Accountant's
Attestations as are filed by the Securities Administrator with the Commission
shall be available on the Securities Administrator's website xxx.xxxxxxxx.xxx to
any Certificateholder, provided such statement is delivered to the Securities
Administrator. The initial Assessments of Compliance and Accountant's
Attestations required pursuant to this Section 3.18 shall be delivered to the
Master Servicer, the Securities Administrator, and the Depositor, as applicable,
by each party no later than March 12, 2007 or as otherwise expressly provided
herein.
(m) Each of the parties hereto acknowledges and agrees that the
purpose of this Section 3.18 is to facilitate compliance by the Sponsor and the
Depositor with the provisions of Regulation AB, as such may be amended or
clarified from time to time. Therefore, each of the parties agrees that the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB and the parties shall comply with requests made by the Sponsor or
the Depositor for delivery of additional or different information as the Sponsor
or the Depositor may determine in good faith is necessary to comply with the
provisions of Regulation AB, provided that such information is available to such
party without unreasonable effort or expense and within such timeframe as may be
reasonably requested. Any such supplementation or modification shall be made in
accordance with Section 10.01 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act.
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SECTION 3.19. Rights of the NIMs Insurer
Each of the rights of the NIMs Insurer set forth in this agreement shall
exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM notes.
SECTION 3.20. Periodic Filings
As set forth on Schedule X hereto, for so long as the Issuing Entity is
subject to the Exchange Act reporting requirements, no later than the end of
business on the 2nd Business Day after the occurrence of an event requiring
disclosure on Form 8K (a "reportable event") (i) the Depositor, the Sponsor, the
Master Servicer, the Securities Administrator, the Trustee or the Servicers
shall have timely notified the Master Servicer and the Securities Administrator
of an item reportable on a Form 8-K (unless such item is specific to the
Securities Administrator, in which case the Securities Administrator will be
deemed to have notice), (ii) the Trustee, the Depositor, the Sponsor, the
Servicer or the Master Servicer shall have delivered to the Master Servicer and
Securities Administrator, all information, data, and exhibits required to be
provided or filed with such Form 8-K in a word format agreed upon by the Master
Servicer, the Securities Administrator and Depositor, Sponsor, the Master
Servicer, the Trustee or the related Servicer and (iii) the Depositor or the
Master Servicer and Securities Administrator, to the extent the reportable item
pertains to such party, shall notify the Master Servicer thereof by telephone.
The Securities Administrator shall not be responsible for determining what
information is required to be filed on a Form 8-K in connection with the
transactions contemplated by this Agreement (unless such information is specific
to the Securities Administrator, in which case the Securities Administrator will
be responsible for consulting with the Depositor and Master Servicer in making
such a determination) or what events shall cause a Form 8-K to be required to be
filed (unless such event is specific to the Securities Administrator, in which
case the Securities Administrator will be responsible for consulting with the
Depositor, Master Servicer, Trustee or related Servicer before causing such Form
8-K to be filed) and shall not be liable for any late filing of a Form 8-K in
the event that it does not receive all information, data and exhibits required
to be provided or filed on or prior to the second Business Day prior to the
applicable filing deadline and with respect to signatures, by noon, New York
City time, on the fourth Business Day after the reportable event. After
preparing the Form 8-K on behalf of the Depositor, the Securities Administrator
shall, if required, forward electronically a draft copy of the Form 8-K to the
Depositor and Master Servicer for review. No later than one and one-half
Business Days after receiving a final copy of the Form 8-K from the Securities
Administrator, a duly authorized representative of the Master Servicer shall
sign the Form 8-K and return an electronic or fax copy of such signed Form 8-K
(with an original executed hard copy to follow by overnight mail) to the
Securities Administrator and the Securities Administrator shall file such Form
8-K; provided that the Depositor has notified the Securities Administrator and
Master Servicer that it approves of the form and substance of such Form 8-K. If
a Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be
amended, the Securities Administrator will follow the procedures set forth in
this Agreement. After filing with the Commission, the Securities Administrator
will, pursuant to this Agreement, make available on its internet website a final
executed copy of each Form 8-K. The Securities Administrator will have no
obligation to prepare, execute or file such Form 8-K or any liability with
respect to any failure to properly prepare, execute or file such Form 8-K
resulting from the Securities Administrator's inability or failure to obtain or
receive any information needed to prepare, arrange for execution or file such
Form 8-K within the time frames required by this paragraph, not resulting from
its own negligence, bad faith or willful misconduct.
Within 15 days after each Distribution Date, the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, file with the Commission via the Electronic Data Gathering and
Retrieval System (XXXXX), a Form 10-D with (1) a copy of the report to the
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Certificateholders for such Distribution Date as an exhibit thereto. Any other
information provided to the Securities Administrator by the Master Servicer, the
Securities Administrator, the Servicers the Trustee or Depositor to be included
in Form 10-D shall be determined and prepared by and at the direction of the
Depositor pursuant to the following paragraph and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or prepare
any additional information on Form 10-D ("Additional Form 10-D Disclosure") as
set forth in the next paragraph.
As set forth in Schedule Y hereto, within 5 calendar days after the related
Distribution Date (i) the parties hereto, as applicable, will be required to
provide to the Depositor and the Master Servicer, to the extent known to such
party, any Additional Form 10-D Disclosure (including any breaches of pool asset
representations and warranties or transaction covenants of which the party has
written notice and which has not been included on the monthly distribution
report for the period), if applicable, and (ii) the Depositor, to the extent it
deems necessary, forward to the Securities Administrator in XXXXX-compatible
form (with a copy to the Master Servicer), or in such other form as otherwise
agreed upon by the Securities Administrator and the Depositor, the form and
substance of the Additional Form 10-D Disclosure by the 8th calendar day after
the Distribution Date. The Depositor will be responsible for any reasonable fees
and expenses incurred by the Securities Administrator in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph.
After preparing the Form 10-D at the direction of the Depositor, the
Securities Administrator will forward electronically a draft copy of the Form
10-D to the Depositor and the Master Servicer for review by the 9th calendar day
after the Distribution Date. No later than 2 business days after receipt of a
final copy after the related Distribution Date, unless the Master Servicer
receives a notice from the Securities Administrator as described below or a
notice from the Depositor that it has discovered a material deficiency or
irregularity with respect to such Form 10-D, a duly authorized representative of
the Master Servicer shall sign the Form 10-D and return an electronic or fax
copy of such Form 10-D (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator and the Securities Administrator
shall file such Form 10-D within two business days. Unless the Master Servicer
shall have received notice from the Securities Administrator to the contrary,
the Securities Administrator will be deemed to have represented to the Master
Servicer that the Monthly Statement has been properly prepared by the Securities
Administrator and the Master Servicer may rely upon the accuracy thereof in it
execution of the Form 10-D. If a Form 10-D cannot be filed on time (because of
notice from the Securities Administrator per the previous sentence or otherwise)
or if a previously filed Form 10-D needs to be amended, the Securities
Administrator will follow the procedures set forth in this Agreement. After
filing with the Commission, the Securities Administrator will make available on
its internet website a final executed copy of each Form 10-D. The Securities
Administrator will have no liability with respect to any failure to properly
prepare, execute or file such Form 10-D resulting from the Securities
Administrator's inability or failure to obtain or receive any information needed
to prepare, arrange for execution or file such Form 10-D on a timely basis.
Prior to Xxxxx 00, 0000 (xxx, if applicable, prior to the 90th calendar day
after the end of the fiscal year for the Issuing Entity), the Securities
Administrator shall, on behalf of the Issuing Entity and in accordance with
industry standards, prepare and file with the Commission via XXXXX a Form 10-K
with respect to the Issuing Entity. Such Form 10-K shall include the following
items, in each case to the extent they have been delivered to the Securities
Administrator within the applicable time frames set forth in this Agreement, (i)
an annual compliance statement for each Servicer and each Subservicer, as
described in Section 3.17 of the Agreement, (ii)(A) the annual reports on
Assessment of Compliance with Servicing Criteria for each of the Master
Servicer, Securities Administrator, Custodian, Servicer, Subservicer and
Subcontractor (unless the Depositor has determined that such compliance
statement is not required by Regulation AB), as described in Section 3.18 of the
Agreement, and (B) if any Servicer's report on
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Assessment of Compliance with Servicing Criteria described in Section 3.18
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any report on Assessment of Compliance with
Servicing Criteria described in Section 3.18 of the Agreement is not included as
an exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, (iii)(A) the registered public
accounting firm attestation report for each of the Master Servicer, Securities
Administrator, Custodian and each Subservicer, as described in Section 3.18 of
the Agreement, and (B) if any registered public accounting firm attestation
report described in the Section 3.18 of the Agreement identifies any material
instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a Xxxxxxxx-Xxxxx Certification in the form attached hereto as Exhibit T,
executed by the senior officer in charge of securitizations of the Master
Servicer. Any disclosure or information in addition to (i) through (iv) above
that is required to be included on Form 10-K ("Additional Form 10-K Disclosure")
shall be determined and prepared by and at the direction of the Depositor
pursuant to the following paragraph and neither the Master Servicer nor the
Securities Administrator will have any duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next paragraph.
As set forth in Schedule Z hereto, no later than March 12 of each year that
the Issuing Entity is subject to the Exchange Act reporting requirements,
commencing in 2007, (i) certain parties to the transaction shall be required to
provide to the Depositor and the Securities Administrator, to the extent known,
any Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor
shall, to the extent it deems necessary, forward to the Securities Administrator
in XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and the Depositor, the form and substance of the
Additional Form 10-K Disclosure by March 15. The Depositor will be responsible
for any reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-K Disclosure on Form 10-K
pursuant to this paragraph.
After preparing the Form 10-K, the Securities Administrator shall forward
electronically a draft copy of the Form 10-K to the Depositor and the Master
Servicer for review. Upon the request of the Master Servicer, the Depositor
shall confirm that it has reviewed the Form 10-K, that it has been properly
prepared and that the Master Servicer may rely on the accuracy thereof (other
than with respect to any portion of the Form 10-K or any exhibit thereto
provided by the Master Servicer (other than any portion thereof with respect to
which the Master Servicer has relied on the Securities Administrator)). No later
than 5:00pm EST on the 3rd Business Day following receipt of a final copy of the
Form 10-K and if requested, the above-described confirmation from the Depositor,
a senior officer of the Master Servicer shall sign the Form 10-K and return an
electronic or fax copy of such signed Form 10-K (with an original executed hard
copy to follow by overnight mail) to the Securities Administrator and the
Securities Administrator shall file such Form 10-K by March 30th. If a Form 10-K
cannot be filed on time or if a previously filed Form 10-K needs to be amended,
the Securities Administrator will follow the procedures set forth in the
Agreement. After filing with the Commission, the Securities Administrator will,
pursuant to the Agreement, make available on its internet website a final
executed copy of each Form 10-K. The Securities Administrator shall have no
liability with respect to any failure to properly prepare, execute or file such
Form 10-K resulting from the Securities Administrator's inability or failure to
obtain or receive any information needed to prepare, arrange for execution or
file such Form 10-K on a timely basis.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") which shall be in the form attached hereto as Exhibit T. The
Master Servicer will cause its senior officer in charge of securitization to
execute the Xxxxxxxx-Xxxxx Certification required pursuant to Rule 13a -14 under
the Securities Exchange Act of 1934, as amended, and to deliver the original
executed Xxxxxxxx-Xxxxx
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Certification to the Securities Administrator by March 20 of each year in which
the Issuing Entity is subject to the reporting requirements of the Exchange Act.
In connection therewith, each of the Securities Administrator and each Servicer,
Subservicer and Subcontractor engaged by such party shall sign an Officer's
Certificate (in the form attached hereto as Exhibit K and Exhibit L,
respectively) for the benefit of the Master Servicer and its officers, directors
and Affiliates regarding certain aspects of the Xxxxxxxx-Xxxxx Certification. To
the extent any information or exhibits required to be included in the Form 10-K
are not timely received by the Securities Administrator prior to March 30, the
Securities Administrator shall, on behalf of the Issuing Entity, file a Form
12B-25 and one or more amended Form 10-Ks, to the extent such amendments are
accepted by the Exchange Act, to include such missing information or exhibits
promptly after receipt thereof by the Securities Administrator.
Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, file with the Commission via XXXXX a Form 15 Suspension Notification
with respect to the Issuing Entity, if applicable.
The Depositor, Master Servicer, Trustee and each Servicer agrees to furnish
promptly to the Securities Administrator, from time to time upon request, such
further information, reports, and financial statements within its control
related to this Agreement and the Mortgage Loans as is reasonably necessary to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items with the Commission
other than those specified in this section and the Master Servicer shall execute
any and all Form 8-Ks and 10-Ks required hereunder.
If the Commission issues additional interpretative guidance or promulgates
additional rules or regulations with respect to Regulation AB or otherwise, or
if other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.20, to be conducted differently than as described,
the Depositor, the Master Servicer, the Securities Administrator, the Servicers,
and the Trustee will reasonably cooperate to amend the provisions of this
Section 3.20 in order to comply with such amended reporting requirements and
such amendment of this Section 3.20. Any such amendment shall be made in
accordance with Section 10.01 without the consent of the Certificateholders and
may result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act. Notwithstanding the
foregoing, the Depositor, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee shall not be obligated to enter into any amendment
pursuant to this Section 3.20 that adversely affects its obligations and
immunities under this Agreement.
The Depositor, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee agree to use their good faith efforts to cooperate
in complying with the requirements of this Section 3.20.
SECTION 3.21. Indemnification by Securities Administrator
The Securities Administrator shall indemnify and hold harmless the
Depositor, the Master Servicer, the Servicers, the Trustee and their respective
officers, directors, agents and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Securities Administrator or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Securities Administrator is responsible for providing information or calculating
amounts included in such information), the failure of the Securities
Administrator to deliver when required any Assessment of Compliance or
Accountant's Attestation required of it pursuant to Section 3.18, or any
material
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misstatement or omission contained in any Assessment of Compliance or
Accountant's Attestation provided on its behalf pursuant to Section 3.18, or the
negligence, bad faith or willful misconduct of the Securities Administrator in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified parties, then the Securities
Administrator agrees that it shall contribute to the amount paid or payable by
the indemnified parties as a result of the losses, claims, damages or
liabilities of the indemnified parties in such proportion as is appropriate to
reflect the relative fault of the Securities Administrator on the one hand and
of the indemnified parties on the other.
SECTION 3.22. Indemnification by Servicers
Each Servicer shall indemnify and hold harmless the Securities
Administrator, the Trustee, the Master Servicer and the Depositor and their
respective officers, directors, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by such Servicer or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.17, 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent
such Servicer is responsible for providing information or calculating amounts
included in such information), the failure of such Servicer or any related
Sub-Servicer or Subcontractor to deliver or cause to be delivered when required
any Assessment of Compliance or Accountant's Attestation required of it pursuant
to Section 3.18 or Annual Statement of Compliance required pursuant to Section
3.17, as applicable, or any material misstatement or omission contained in any
Assessment of Compliance, Accountant's Attestation or Annual Statement as to
Compliance provided on its behalf pursuant to Section 3.18 or 3.17, as
applicable, or the negligence, bad faith or willful misconduct of the related
Servicer in connection therewith. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the indemnified parties, then such
Servicer agrees that it shall contribute to the amount paid or payable by the
indemnified parties as a result of the losses, claims, damages or liabilities of
the indemnified parties in such proportion as is appropriate to reflect the
relative fault of such Servicer on the one hand and the indemnified parties on
the other.
SECTION 3.23. Prepayment Charge Reporting Requirements
Promptly after each Distribution Date, each Servicer shall provide to the
Depositor and the Master Servicer the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
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SECTION 3.24. Information to the Master Servicer
Two Business Days after the 14th day of each month, but not later than the
18th day of each month, each Servicer shall furnish to the Master Servicer in
electronic format (1) the Remittance Report pursuant to Section 4.04(j) and (ii)
a delinquency report in such form or forms as the Master Servicer and the
related Servicer may from time to time agree for the period ending on the last
Business Day of the preceding month (and with respect to prepayments in full,
for the period ending on the 14th day of the month in which such report is to be
furnished).
SECTION 3.25. Indemnification
(a) Each Servicer shall indemnify the Sponsor, the Trust Fund, the
Master Servicer, the Securities Administrator, the Trustee (in its individual
capacity and in its capacity as trustee), the Depositor and their officers,
directors, employees and agents and hold each of them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of such parties may sustain in any way related to the failure
of such Servicer to perform its duties and service the related Mortgage Loans in
compliance with the terms of this agreement by reason of negligence, willful
misfeasance or bad faith in the performance of its duties or by reason of
reckless disregard of obligations and duties hereunder. Each Servicer
immediately shall notify the Sponsor, the Securities Administrator, the Master
Servicer, the Trustee and the Depositor or any other relevant party if a claim
is made by a third party with respect to such party and this Agreement or the
related Mortgage Loans and, if subject to this indemnification obligation,
assume (with the prior written consent of the indemnified party, which consent
shall not be unreasonably withheld or delayed) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or any of such parties in respect of such claim. Each Servicer shall follow
any reasonable written instructions received from the Master Servicer in
connection with such claim, it being understood that the Master Servicer shall
have no duty to monitor or give instructions with respect to such claims, and
such Servicer will not have any liability for following such instructions. Each
Servicer shall provide the Depositor and the Master Servicer with a written
report of all expenses and advances incurred by such Servicer pursuant to this
Section 3.25, and such Servicer shall promptly reimburse itself from the assets
of the Trust Fund in the related Collection Account for all amounts advanced by
it pursuant to the preceding sentence except when the claim in any way relates
to the gross negligence, bad faith or willful misconduct of such Servicer. The
provisions of this paragraph shall survive the termination of this Agreement and
the payment of the outstanding Certificates.
(b) The Master Servicer shall indemnify the Sponsor, the Trust Fund,
the Trustee (in its individual capacity and in its capacity as trustee), the
Securities Administrator, the Servicers and the Depositor and their officers,
directors, employees and agents and hold each of them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of such parties may sustain in any way related to the failure
of the Master Servicer to perform its duties and master service the Mortgage
Loans in compliance with the terms of this Agreement by reason of negligence,
willful misfeasance or bad faith in the performance of its duties or by reason
of reckless disregard of its obligations and duties hereunder. The Master
Servicer immediately shall notify the Sponsor, the Trustee, the Servicers, the
Securities Administrator and the Depositor or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld or delayed) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or
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any of such parties in respect of such claim. The Master Servicer shall follow
any written instructions received from the Trustee in connection with such claim
it being understood that the Trustee shall have no duty to monitor or give
instructions with respect to such claims. The Master Servicer shall provide the
Servicers, the Securities Administrator, the Trustee and the Depositor with a
written report of all expenses and advances incurred by the Master Servicer
pursuant to this Section 3.25(b), and the Master Servicer shall promptly
reimburse itself from the assets of the Trust Fund in the Master Servicer
Collection Account for all amounts advanced by it pursuant to the preceding
sentence except when and to the extent a determination has been made that the
claim in any way relates to the gross negligence, bad faith or willful
misconduct of the Master Servicer. The provisions of this paragraph shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.
(c) The Securities Administrator shall indemnify the Sponsor, the
Trust Fund, the Trustee, the Servicers, the Master Servicer and the Depositor
and their officers, directors, employees and agents and hold each of them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Securities Administrator to perform its
duties in compliance with the terms of this Agreement by reason of negligence,
willful misfeasance or bad faith in the performance of its duties or by reason
of reckless disregard of its obligations and duties hereunder. The Securities
Administrator immediately shall notify the Sponsor, the Trustee, the Servicers,
the Master Servicer and the Depositor or any other relevant party if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the prior written consent of the indemnified party, which consent
shall not be unreasonably withheld or delayed) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or any of such parties in respect of such claim. The Securities Administrator
shall follow any written instructions received from the Trustee in connection
with such claim it being understood that the Trustee shall have no duty to
monitor or give instructions with respect to such claims. The Securities
Administrator shall provide the Trustee, the Servicers, the Master Servicer and
the Depositor with a written report of all expenses and advances incurred by the
Securities Administrator pursuant to this Section 3.25(c), and the Securities
Administrator shall promptly reimburse itself from the assets of the Trust Fund
in the Certificate Account for all amounts advanced by it pursuant to the
preceding sentence except when and to the extent a determination has been made
that the claim in any way relates to the gross negligence, bad faith or willful
misconduct of the Securities Administrator. The provisions of this paragraph
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
SECTION 3.26. Nonsolicitation
Each Servicer hereby covenants that neither it nor any Affiliate of such
Servicer will directly solicit any Mortgagor hereunder to refinance the related
Mortgage Loan. For the purposes of the foregoing, neither the related Servicer
nor any Affiliate of the related Servicer shall be deemed to directly solicit
any Mortgagor (i) if such Servicer received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay or refinance the related
Mortgage Loan or the Mortgagor initiates a title search, or if such Servicer
responds to a request from a Mortgagor regarding a refinancing or if the
Mortgagor receives marketing materials which are generally disseminated or (ii)
in connection with a refinancing of a delinquent Mortgage Loan or if the
Mortgage Loan is Delinquent and such Servicer refers a Mortgagor to a Person for
refinancing or provides a Mortgagor's contact information to such Person. It is
understood that the promotions undertaken by such Servicer or its Affiliates or
agents which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
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SECTION 3.27. High Cost Mortgage Loans
In the event that a Servicer reasonably determines that a Mortgage Loan may
be a "high cost mortgage loan", "high cost home", "covered", "high cost", "high
risk home", "predatory" or similarly classified loan under any applicable state,
federal or local law, such Servicer may notify the Depositor, the Master
Servicer and the Trustee thereof; such Servicer may terminate its servicing
thereof; and such determination shall be deemed to materially and adversely
affect the interests of the Certificateholders in such Mortgage Loan and the
Transferor, or the Sponsor, in event the Transferor does not do so, will
repurchase the Mortgage Loan within a 30 day period from the date of the notice
in the manner described in Section 2.05.
SECTION 3.28. Special Servicing Agreements
Each Servicer may enter into a special servicing advisory agreement with
(i) a holder of (a) the Class R Certificate, (b) the Class C Certificate, (c)
one or more other Class of subordinated certificates issued by the Issuing
Entity and/or (d) a NIM Note and/or (ii) an advisor designated by any of the
foregoing. Pursuant to such agreement, the related Servicer may provide such
holder or advisor, in its capacity as special servicing advisor, with loan-level
information with respect to the Mortgage Loans, and such person may advise such
Servicer with respect to efforts to maximize recoveries with regard to the
Mortgage Loans, including, without limitation, the commencement of foreclosure
proceedings or other actions. The Master Servicer shall have no obligation to
monitor or otherwise have any responsibility with respect to such special
servicing agreements.
SECTION 3.29. Subordination of Liens
In connection with any governmental program under which a Mortgagor may
obtain a benefit in the event the related Mortgaged Property is subject to a
disaster provided that the Mortgagor files a covenant or other lien against the
Mortgaged Property and is required to obtain the subordination thereto of the
Mortgage, the Servicer may cause such subordination to be executed and filed
provided that either (i) the related Mortgage Loan is in default or default with
respect to such Mortgage Loan is imminent or (ii) such subordination and
participation in such governmental program will not result in a change in
payment expectations with respect to such Mortgage Loan. For purposes of the
preceding sentence, a change in payment expectations occurs if, as a result of
such subordination and participation in such governmental program, (1) there is
a substantial enhancement of the Mortgagor's capacity to meet the payment
obligations under the Mortgage Loan and that capacity was primarily speculative
prior to such subordination and participation in such governmental program and
is adequate after such subordination and participation in such governmental
program or (2) there is a substantial impairment of the Mortgagor's capacity to
meet the payment obligations under the Mortgage Loan and that capacity was
adequate prior to such subordination and participation in such governmental
program and is primarily speculative after such subordination and participation
in such governmental program. The preceding sentence and clause (ii) of the
second preceding sentence are intended to comply with Treasury Regulations
Section 1.1001-3(e)(4) and shall be interpreted in accordance therewith.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances
(a) Subject to the conditions of this Article IV, the Servicers, as
required below, shall make an Advance and deposit such Advance in the related
Collection Account. The related Servicer shall
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use commercially reasonable efforts to remit each such Advance no later than
2:30 p.m. EST, but in any case no later than 4:00 p.m. EST, on the Servicer
Advance Date in immediately available funds. Each Servicer shall be obligated to
make any such Advance only to the extent that such advance would not be a
Non-Recoverable Advance. If the related Servicer shall have determined that it
has made a Non-Recoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Non-Recoverable Advance, the related
Servicer shall deliver (i) to the Master Servicer for the benefit of the
Certificateholders, funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency, the NIMs Insurer and
the Master Servicer an Officer's Certificate setting forth the basis for such
determination. Each Servicer may, in its sole discretion, make an Advance with
respect to the principal portion of the final Scheduled Payment on a Balloon
Loan, but such Servicer is under no obligation to do so; provided, however, that
nothing in this sentence shall affect such Servicer's obligation under this
Section 4.01 to Advance the interest portion of the final Scheduled Payment with
respect to a Balloon Loan as if such Balloon Loan were a fully amortizing
Mortgage Loan. If a Mortgagor does not pay its final Scheduled Payment on a
Balloon Loan when due, the related Servicer shall Advance (unless it determines
in its good faith judgment that such amounts would constitute a Non-Recoverable
Advance) a full month of interest (net of the Servicing Fee) on the Stated
Principal Balance thereof each month until its Stated Principal Balance is
reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
related Servicer may (i) cause to be made an appropriate entry in its records
relating to the related Collection Account that any amount held for future
distribution has been used by such Servicer in discharge of its obligation to
make any such Advance and (ii) transfer such funds from the related Collection
Account to the Master Servicer Collection Account. In addition, each Servicer
shall have the right to reimburse itself for any such Advance from amounts held
from time to time in the related Collection Account to the extent such amounts
are not then required to be distributed. Any funds so applied and transferred
pursuant to the previous two sentences shall be replaced by the related Servicer
by deposit in the related Collection Account no later than the close of business
on the Servicer Advance Date on which such funds are required to be distributed
pursuant to this Agreement. Each Servicer shall be entitled to be reimbursed
from the related Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until the earlier of
(i) such Mortgage Loan is paid in full, (ii) the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Issuing Entity pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, (iii) the related Servicer determines in its good faith judgment
that such amounts would constitute a Non-Recoverable Advance as provided in the
preceding paragraph or (iv) the date on which such Mortgage Loan becomes 150
days delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the related Servicer
(including for the avoidance of doubt, the Master Servicer as successor
servicer) if such Advance or Servicing Advance would, if made, constitute a
Non-Recoverable Advance or a Non-Recoverable Servicing Advance. The
determination by the related Servicer that it has made a Non-Recoverable Advance
or a Non-Recoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Depositor and the Master
Servicer. In addition, the related Servicer shall not be required to advance any
Relief Act Shortfalls.
(c) Notwithstanding the foregoing, each Servicer shall not be required
to make any Advances for any Mortgage Loan after such Mortgage Loan becomes 150
days delinquent. Each Servicer
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shall identify such delinquent Mortgage Loans in the Servicer Statement
referenced in Section 3.24. In addition, the related Servicer shall provide the
Master Servicer with an Officer's Certificate listing such delinquent Mortgage
Loans and certifying that such loans are 150 days or more delinquent.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls
In the event that any Mortgage Loan is the subject of a Prepayment Interest
Shortfall, the related Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the related Collection Account, as
a reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall. In case of such deposit, such Servicer
shall not be entitled to any recovery or reimbursement from the Depositor,
Master Servicer, the Securities Administrator, the Trustee, the Issuing Entity
or the Certificateholders. With respect to any Distribution Date, to the extent
that the Prepayment Interest Shortfall exceeds Compensating Interest (such
excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date.
SECTION 4.03. Distributions on the REMIC Interests
On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in each of the SWAP REMIC and the Lower Tier REMIC in an amount
sufficient to make the distributions on the respective Certificates on such
Distribution Date in accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions
(a) [Reserved].
(b) On each Distribution Date (or on the related Swap Payment Date,
with respect to payments to the Supplemental Interest Trust), the Securities
Administrator shall, to the extent of funds then available, make the following
distributions from funds then available in the Certificate Account, of an amount
equal to the Interest Funds, in the following order of priority:
(i) to the Class P Certificates, an amount equal to any Prepayment
Charges received with respect to the Mortgage Loans and all amounts paid by
the Servicers, the Sponsor or the Transferor in respect of Prepayment
Charges pursuant to this Agreement or the Transfer Agreement, as
applicable, and all amounts received in respect of any indemnification paid
as a result of a Prepayment Charge being unenforceable in breach of the
representations and warranties set forth in the Sale Agreement or the
Transfer Agreement for the related Prepayment Period;
(ii) to the Supplemental Interest Trust, any Net Swap Payments owed to
the Swap Counterparty;
(iii) to the Supplemental Interest Trust, any Swap Termination Payment
owed to the Swap Counterparty (other than any Defaulted Swap Termination
Payment);
(iv) concurrently, to each Class of the Class A Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to each
such Class; provided, however, that if
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Interest Funds are insufficient to make a full distribution of the
aggregate Current Interest and the aggregate Interest Carry Forward Amount
to the Class A Certificates, Interest Funds will be distributed pro rata
among each Class of the Class A Certificates based upon the ratio of (x)
the Current Interest and Interest Carry Forward Amount for each Class of
the Class A Certificates to (y) the total amount of Current Interest and
any Interest Carry Forward Amount for the Class A Certificates in the
aggregate;
(v) to the Class M-1 Certificates, the Current Interest for such Class
and any Interest Carry Forward Amount with respect to such Class;
(vi) to the Class M-2 Certificates, the Current Interest for such
Class and any Interest Carry Forward Amount with respect to such Class;
(vii) to the Class M-3 Certificates, the Current Interest for such
Class and any Interest Carry Forward Amount with respect to such Class;
(viii) to the Class M-4 Certificates, the Current Interest for such
Class and any Interest Carry Forward Amount with respect to such Class;
(ix) to the Class M-5 Certificates, the Current Interest for such
Class and any Interest Carry Forward Amount with respect to such Class;
(x) to the Class M-6 Certificates, the Current Interest for such Class
and any Interest Carry Forward Amount with respect to such Class;
(xi) to the Class B-1 Certificates, the Current Interest for each such
Class and any Interest Carry Forward Amount with respect to each such
Class;
(xii) to the Class B-2 Certificates, the Current Interest for each
such Class and any Interest Carry Forward Amount with respect to each such
Class;
(xiii) to the Class B-3 Certificates, the Current Interest for each
such Class and any Interest Carry Forward Amount with respect to each such
Class; and
(xiv) any remainder pursuant to Section 4.04(f) hereof.
On each Distribution Date, subject to the proviso in (iv) above, Interest
Funds received on the Group One Mortgage Loans will be deemed to be distributed
to the Class R and Class A-1 Certificates and Interest Funds received on the
Group Two Mortgage Loans will be deemed to be distributed to the Class A-2
Certificates, in each case, until the related Current Interest and Interest
Carry Forward Amount of each such Class of Certificates for such Distribution
Date has been paid in full. Thereafter, Interest Funds not required for such
distributions are available to be applied to if necessary, to the Class or
Classes of Certificates that are not related to such group of Mortgage Loans.
(c) [Reserved]
(d) On each Distribution Date (or on the related Swap Payment Date,
with respect to payments to the Supplemental Interest Trust), the Securities
Administrator shall, to the extent of funds then available, make the following
distributions from the Certificate Account of an amount equal to the Principal
Distribution Amount in the following order of priority, and each such
distribution shall be made
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only after all distributions pursuant to Section 4.04(b) above shall have been
made until such amount shall have been fully distributed for such Distribution
Date:
(i) to the Supplemental Interest Trust, any Net Swap Payments owed to
the Swap Counterparty, to the extent not paid pursuant to Section
4.04(b)(ii);
(ii) to the Supplemental Interest Trust, any Swap Termination Payment
owed to the Swap Counterparty (other than any Defaulted Swap Termination
Payment), to the extent not paid pursuant to Section 4.04(b)(iii);
(iii) to the Class A Certificates, the Class A Principal Distribution
Amount shall be distributed as follows:
(A) the Group One Principal Distribution Amount will be
distributed as follows: (A) first, to the Class R Certificate, until
the Certificate Principal Balance of such Class has been reduced to
zero and (B) second, to the Class A-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
(B) the Group Two Principal Distribution Amount will be
distributed as follows: sequentially, to the Class A-2A Certificates
until the Certificate Principal Balance thereof has been reduced to
zero, then to the Class A-2B Certificates until the Certificate
Principal Balance thereof has been reduced to zero, then to the Class
A-2C Certificates until the Certificate Principal Balance thereof has
been reduced to zero and then to the Class A-2D Certificates until the
Certificate Principal Balance thereof has been reduced to zero;
provided, however, that on and after the Distribution Date on which
the aggregate Certificate Principal Balance of the Class M, Class B
and Class C Certificates has been reduced to zero, any principal
distributions allocated to the Class A-2A, Class A-2B, Class A-2C and
Class A-2D Certificates are required to be allocated pro rata, among
such Classes, based on their respective Certificate Principal
Balances, until their Certificate Principal Balances have been reduced
to zero;
(iv) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates and the Class M-3 Certificates, in that order, until the
Certificate Principal Balance of each such class has been reduced to zero,
an amount equal to the aggregate Class M-1/M-2/M-3 Principal Distribution
Amount;
(v) to the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount;
(vi) to the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount;
(vii) to the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount;
(viii) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(ix) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(x) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount; and
(xi) any remainder pursuant to Section 4.04(f) hereof.
(e) [Reserved]
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(f) On each Distribution Date, the Securities Administrator shall, to
the extent of funds then available, make the following distributions up to the
following amounts from the Certificate Account of the remainders pursuant to
Section 4.04(b)(xiv) and (d)(xi) hereof and each such distribution shall be made
only after all distributions pursuant to Sections 4.04(b) and (d) above shall
have been made until such remainders shall have been fully distributed for such
Distribution Date:
(i) to the Class A Certificates, any funds owed, in the same manner
and in the same order of priority, as set forth in accordance with Section
4.04(b)(iv), to the extent not paid pursuant to Section 4.04(b)(iv);
(ii) to the Subordinate Certificates, any amounts due as described in
the same order of priority as set forth in Section 4.04(b)(v) through
4.04(b)(xiii) to the extent unpaid from Interest Funds;
(iii) for distribution as part of the Principal Distribution Amount,
the Extra Principal Distribution Amount;
(iv) to the Class M-1 Certificates, any Unpaid Realized Loss Amount
for such Class;
(v) to the Class M-2 Certificates, any Unpaid Realized Loss Amount for
such Class;
(vi) to the Class M-3 Certificates, any Unpaid Realized Loss Amount
for such Class;
(vii) to the Class M-4 Certificates, any Unpaid Realized Loss Amount
for such Class;
(viii) to the Class M-5 Certificates, any Unpaid Realized Loss Amount
for such Class;
(ix) to the Class M-6 Certificates, any Unpaid Realized Loss Amount
for such Class;
(x) to the Class B-1 Certificates, any Unpaid Realized Loss Amount for
such Class;
(xi) to the Class B-2 Certificates, any Unpaid Realized Loss Amount
for such Class;
(xii) to the Class B-3 Certificates, any Unpaid Realized Loss Amount
for such Class;
(xiii) to the Class A, Class M and Class B Certificates, on a pro rata
basis, based upon outstanding Floating Rate Certificate Carryover for each
such Class, the Floating Rate Certificate Carryover for each such Class;
and
(xiv) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date (or on the related Swap Payment Date,
with respect to payments to the Supplemental Interest Trust), the Securities
Administrator shall allocate the remainders pursuant to Section 4.04(f)(xiv) as
follows:
(i) to the Supplemental Interest Trust, any Defaulted Swap Termination
Payment;
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(ii) to the Class C Certificates in the following order of priority,
(I) the Class C Current Interest, (II) the Class C Interest Carry Forward
Amount, (III) as principal on the Class C Certificate until the Certificate
Principal Balance of the Class C Certificates has been reduced to zero and
(IV) the Class C Unpaid Realized Loss Amount; and
(iii) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Securities Administrator shall
allocate the remainder pursuant to Section 4.04(g)(iii) hereof (i) to the
Securities Administrator to reimburse amounts or pay indemnification amounts
owing to the Master Servicer and the Securities Administrator from the Issuing
Entity pursuant to Section 6.03 and (ii) to the Class R Certificate and such
distributions shall be made only after all preceding distributions shall have
been made until such remainder shall have been fully distributed.
(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Securities Administrator shall allocate the Applied
Realized Loss Amount for the Certificates to reduce the Certificate Principal
Balances of the Class C Certificates and the Subordinate Certificates in the
following order of priority:
(i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;
(ii) to the Class B-3 Certificates until the Class B-3 Certificate
Principal Balance is reduced to zero;
(iii) to the Class B-2 Certificates until the Class B-2 Certificate
Principal Balance is reduced to zero;
(iv) to the Class B-1 Certificates until the Class B-1 Certificate
Principal Balance is reduced to zero;
(v) to the Class M-6 Certificates until the Class M-6 Certificate
Principal Balance is reduced to zero;
(vi) to the Class M-5 Certificates until the Class M-5 Certificate
Principal Balance is reduced to zero;
(vii) to the Class M-4 Certificates until the Class M-4 Certificate
Principal Balance is reduced to zero;
(viii) to the Class M-3 Certificates until the Class M-3 Certificate
Principal Balance is reduced to zero;
(ix) to the Class M-2 Certificates until the Class M-2 Certificate
Principal Balance is reduced to zero; and
(x) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Securities Administrator shall make distributions
to each Certificateholder of record
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on the preceding Record Date either by wire transfer in immediately available
funds to the account of such holder at a bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Securities Administrator
at least five (5) Business Days prior to the related Record Date or, if not, by
check mailed by first class mail to such Certificateholder at the address of
such holder appearing in the Certificate Register. Notwithstanding the
foregoing, but subject to Section 9.02 hereof respecting the final distribution,
distributions with respect to Certificates registered in the name of a
Depository shall be made to such Depository in immediately available funds.
In accordance with this Agreement, each Servicer shall prepare and
deliver an electronic report in form and substance mutually agreed to by the
related Servicer and the Master Servicer (the "Remittance Report") to the Master
Servicer (or by such other means as the Servicers and the Master Servicer may
agree from time to time) containing such data and information as to permit the
Securities Administrator to prepare the Monthly Statement to Certificateholders
and make the required distributions for the related Distribution Date. The
Securities Administrator will prepare the Monthly Statement based solely upon
the information received by it from the Master Servicer and the Swap
Counterparty. Neither the Securities Administrator nor the Master Servicer shall
be obligated to verify, recompute, reconcile or recalculate any such information
or data provided by the Servicer or, with respect to the Securities
Administrator, by the Master Servicer and shall rely on correctness and
completeness of such information. The Master Servicer will prepare (based solely
on the information and data provided to it by the Servicers) and deliver to the
Securities Administrator an electronic report to the Securities Administrator
(by such means and at such times as the Securities Administrator and the Master
Servicer may agree from time to time) containing such data and information
sufficient to permit the Securities Administrator to prepare the Monthly
Statement to Certificateholders.
The Trustee shall promptly notify the NIMs Insurer of any proceeding or the
institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates and the Trustee hereby agree
that the NIMs Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class C Certificates and the Class P
Certificates in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim;
provided, however, that the NIMs Insurer will not have any rights with respect
to any Preference Claim set forth in this paragraph unless the indenture trustee
with respect to the NIM Notes or the holder of any NIMs Notes has been required
to relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the NIM Notes, as applicable, and the NIMs Insurer made a
payment in respect of such relinquished amount.
(k) The Securities Administrator is hereby directed by the Depositor
to execute the Cap Contracts on behalf of the Supplemental Interest Trust in the
form presented to it by the Depositor and shall have no responsibility for the
contents of such Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Securities Administrator under the Cap Contracts at closing shall be paid by the
Depositor. Notwithstanding anything to the contrary contained herein or in any
Cap Contract, except as set forth in paragraph 2 of the confirmation to each Cap
Contract, the Issuing Entity shall not be required to make any payments to the
counterparty under any Cap Contract. Any payments received under the terms of
the related Cap Contract will be available to pay the holders of the related
Class A-1, Class A-2, Class M and Class B Certificates up to the amount of any
Floating Rate Certificate Carryovers remaining after all other distributions
required under this Section 4.04 are made on such Distribution Date, other than
Floating Rate Certificate Carryovers attributable to the fact that Applied
Realized Loss Amounts are not allocated to the Class A Certificates. Any amounts
received under the terms of any Cap Contract on a Distribution Date that are not
used to pay such Floating Rate Certificate Carryovers will be distributed to the
holders of the Class C
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Certificates. Payments in respect of such Floating Rate Certificate Carryovers
from proceeds of a Cap Contract shall be paid to the related Classes of Class
X-0, Xxxxx X-0, Class M and Class B Certificates, pro rata based upon such
Floating Rate Certificate Carryovers for each such Class of Class A-1, Class
A-2, Class M and Class B Certificates. Amounts received on the Class A-1 Cap
Contract will only be available to make payments on the Class A-1 Certificates,
amounts received on the Class A-2 Cap Contract will only be available to make
payments on the Class A-2 Certificates, amounts received on the Subordinate
Certificates Cap Contract will only be available to make payments on the
Subordinate Certificates.
(i) The Securities Administrator shall establish and maintain, for the
benefit of the Issuing Entity and the Certificateholders, the Cap Contract
Account. On or prior to the Cap Contract Termination Date, amounts, if any,
received by the Securities Administrator for the benefit of the Trust Fund
in respect of the related Cap Contract shall be deposited by the Securities
Administrator into the Cap Contract Account and will be used to pay
Floating Rate Certificate Carryovers on the related Class X-0, Xxxxx X-0,
Class M and Class B Certificates to the extent provided in the immediately
preceding paragraph. With respect to any Distribution Date on or prior to
the Cap Contract Termination Date, the amount, if any, payable by the Cap
Contract Counterparty under the related Cap Contract will equal the product
of (i) the excess of (x) One-Month LIBOR (as determined by the Cap Contract
Counterparty pursuant to the terms of such Cap Contract and subject to a
cap equal to the rate with respect to such Distribution Date as shown under
the heading "1ML Upper Collar" in the schedule to the related Cap
Contract), over (y) the rate with respect to such Distribution Date as
shown under the heading "1ML Strike Lower Collar" in the schedule to the
related Cap Contract, (ii) an amount equal to the lesser of (x) the related
Cap Contract Notional Balance for such Distribution Date and (y) the
outstanding Certificate Principal Balance of the related Classes of
Certificates and (iii) the number of days in such Accrual Period, divided
by 360. If a payment is made to the Issuing Entity under a Cap Contract and
the Securities Administrator is required to distribute excess amounts to
the holders of the Class C Certificates as described above, information
regarding such distribution will be included in the monthly statement made
available on the Securities Administrator's website pursuant to Section
4.05 hereof.
(ii) Amounts on deposit in the Cap Contract Account will remain
uninvested pending distribution to Certificateholders.
(iii) Each Cap Contract is scheduled to remain in effect until the Cap
Contract Termination Date and will be subject to early termination only in
limited circumstances. Such circumstances include certain insolvency or
bankruptcy events in relation to the Cap Contract Counterparty (after a
grace period of three Local Business Days, as defined in the related Cap
Contract, after notice of such failure is received by the Cap Contract
Counterparty) to make a payment due under the related Cap Contract, the
failure by the Cap Contract Counterparty (after a cure period of 20 days
after notice of such failure is received) to perform any other agreement
made by it under the related Cap Contract, the termination of the Trust
Fund and the related Cap Contract becoming illegal or subject to certain
kinds of taxation.
(l) On the Closing Date, the Supplemental Interest Trust shall be
established and maintained pursuant to this Agreement, as a separate trust, the
corpus of which shall be held by the Securities Administrator for the benefit of
the holders of the Certificates as a segregated subtrust of the Trust Fund. The
Supplemental Interest Trust shall be an Eligible Account, and funds deposited
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Securities
Administrator held pursuant to this Agreement. In no
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event shall any funds deposited in the Supplemental Interest Trust be credited
to or made available to any other account of the Trust Fund. The records of the
Securities Administrator shall at all times reflect that the Supplemental
Interest Trust is a subtrust of the Trust Fund, the assets of which are
segregated from other assets of the Trust Fund.
The Securities Administrator shall use reasonable efforts to enforce all of
the rights of the Supplemental Interest Trust and exercise any remedies under
the Swap Agreement and, in the event the Swap Agreement is terminated as a
result of the designation by either party thereto of an Early Termination Date
(as defined in the Swap Agreement), find a replacement counterparty to enter
into a replacement swap agreement utilizing the amounts of the net Swap
Termination Payments received.
For each Distribution Date, through and including the Distribution Date in
November 2010, the Securities Administrator shall, based on the Significance
Estimate (which shall be provided to the Securities Administrator by the
Depositor within five Business Days prior to the Distribution Date), calculate
the Significance Percentage of the Swap Agreement. If on any such Distribution
Date, the Significance Percentage is equal to or greater than 9%, the Securities
Administrator shall promptly notify the Depositor and the Depositor, on behalf
of the Securities Administrator, shall obtain the financial information required
to be delivered by the Swap Counterparty pursuant to the terms of the Swap
Agreement. If, on any succeeding Distribution Date through and including the
Distribution Date in November 2010, the Significance Percentage is equal to or
greater than 10%, the Securities Administrator shall promptly notify the
Depositor and the Depositor shall, within five Business Days after such
Distribution Date, deliver to the Securities Administrator the financial
information provided to it by the Swap Counterparty for inclusion in the Form
10-D relating to such Distribution Date.
Any Swap Termination Payment received by the Securities Administrator from
the Swap Counterparty shall be deposited in the Supplemental Interest Trust and
shall be used to make any upfront payment required under a replacement swap
agreement and any upfront payment received from the counterparty to a
replacement swap agreement shall be used to pay any Swap Termination Payment
owed to the Swap Counterparty.
Notwithstanding anything contained herein, in the event that a replacement
swap agreement cannot be obtained within 30 days after receipt by the Securities
Administrator of the Swap Termination Payment paid by the terminated Swap
Counterparty, the Securities Administrator shall deposit such Swap Termination
Payment into a separate, segregated non-interest bearing subtrust established by
the Securities Administrator and the Securities Administrator shall, on each
Distribution Date following receipt of such Swap Termination Payment, withdraw
from such subtrust, an amount equal to the Net Swap Payment, if any, that would
have been paid to the Supplemental Interest Trust by the original Swap
Counterparty (computed in accordance with the original Swap Agreement) and
distribute such amount in accordance with Section 4.04(l)(i)-(viii) of this
Agreement. Any such subtrust shall not be an asset of any REMIC. Any amounts
remaining in such subtrust shall be distributed to the holders of the Class C
Certificates on the Distribution Date following the earlier of (i) the
termination of the Trust Fund pursuant to Section 9.01 and (ii) November 25,
2010.
On any Distribution Date, any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Supplemental Interest Trust. The Supplemental Interest
Trust will not be an asset of any REMIC. Funds in the Supplemental Interest
Trust (other than any funds in the Cap Contract Account) shall be distributed in
the following order of priority by the Securities Administrator:
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(i) to the Swap Counterparty, all Net Swap Payments, if any, owed to
the Swap Counterparty for such Distribution Date;
(ii) to the Swap Counterparty, any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, if any, owed to the Swap
Counterparty;
(iii) to each Class of the Class A Certificates, on a pro rata basis,
any Current Interest and any Interest Carry Forward Amount with respect to
such Class to the extent unpaid from Interest Funds and Principal Funds;
(iv) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates, in
that order, any Current Interest for such Class to the extent unpaid from
Interest Funds and Principal Funds;
(v) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates, in
that order, any Interest Carry Forward with respect to such Class to the
extent unpaid from Interest Funds and Principal Funds;
(vi) to the Class A, Class R, Class M and Class B Certificates, to pay
principal as described and in the same manner and order of priority as set
forth in Sections 4.04(d)(iii) through 4.04(d)(x) to the extent that funds
are not otherwise available to pay the Extra Principal Distribution Amount;
(vii) sequentially, to the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
Certificates, the Class B-2 Certificates, the Class B-3 Certificates, in
that order, any Unpaid Realized Loss Amount for such Class to the extent
unpaid from Interest Funds and Principal Funds;
(viii) to the Class A, Class R, Class M and Class B Certificates, on a
pro rata basis, any Floating Rate Certificate Carryover to the extent not
paid based on the amount of such unpaid Floating Rate Certificate
Carryover;
(ix) to the Swap Counterparty, any Defaulted Swap Termination Payment
owed to the Swap Counterparty to the extent not already paid; and
(x) to the Class C Certificates any remaining amount.
Notwithstanding the foregoing, however, after giving effect to proposed
distributions on any Distribution Date, the sum of the cumulative amounts
distributed pursuant to clause (vi) above and the cumulative amounts distributed
pursuant to clause (vii) above shall be limited to the aggregate amount of
cumulative Realized Losses incurred from the Cut-off Date through the last day
of the related Prepayment Period.
Upon termination of the Trust Fund, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities set
forth in this Section 4.04(l).
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With respect to the failure of the Swap Counterparty to perform any of its
obligations under the Swap Agreement, the breach by the Swap Counterparty of any
of its representations and warranties made pursuant to the Swap Agreement, or
the termination of the Swap Agreement, the Securities Administrator shall send
any notices and make any demands required hereunder.
SECTION 4.05. Monthly Statements to Certificateholders
(a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available on its website located at
xxx.xxxxxxxx.xxx to each Holder of a Class of Certificates of the Trust Fund,
the Servicers, the Master Servicer, the Trustee, the Rating Agencies, the Cap
Contract Counterparty, the Swap Counterparty and the Depositor a statement
setting forth for the Certificates the following information; provided, however,
that with respect to any calendar year during which an annual report on Form
10-K is not required to be filed with the Commission on behalf of the Issuing
Entity, information set forth in Items (xxiv) through (xxxii) below are not
required to be included in such statement during any calendar year:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein, (C) the Extra Principal
Distribution Amount, if any, and (D) the aggregate amount of Prepayment
Charges, if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
(iii) any interest Carryforward Amount for each Class of the Class A,
Class M and Class B Certificates;
(iv) the Class Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(v) the Pool Stated Principal Balance for such Distribution Date;
(vi) the amount of the Servicing Fee paid to or retained by each
Servicer and any amounts constituting reimbursement or indemnification of
each Servicer or Trustee;
(vii) the Pass-Through Rate for each Class of Certificates for such
Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date;
(ix) the cumulative amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts to date, in the aggregate and with respect to the
Group One Mortgage Loans and Group Two Mortgage Loans;
(x) the amount of (A) Realized Losses and (B) Applied Realized Loss
Amounts with respect to such Distribution Date, in the aggregate and with
respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(xi) the number and aggregate principal amounts of Mortgage Loans (A)
Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60 days,
(2) 61 to 90 days and (3) 91 or
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more days, and (B) in foreclosure and Delinquent (1) 31 to 60 days, (2) 61
to 90 days and (3) 91 or more days, in each case as of the close of
business on the last day of the calendar month preceding such Distribution
Date, in the aggregate and with respect to the Group One Mortgage Loans and
Group Two Mortgage Loans;
(xii) with respect to any Mortgage Loans that become REO Properties
during the preceding calendar month, the number and aggregate Stated
Principal Balance of such Mortgage Loans as of the close of business on the
last day of the calendar month preceding such Distribution Date and the
date of acquisition thereof;
(xiii) the total number and principal balance of any REO Properties as
of the close of business on the last day of the calendar month preceding
such Distribution Date, in the aggregate and with respect to the Group One
Mortgage Loans and Group Two Mortgage Loans;
(xiv) the aggregate Stated Principal Balance of all Liquidated Loans
as of the preceding Distribution Date, in the aggregate and with respect to
the Group One Mortgage Loans and Group Two Mortgage Loans;
(xv) whether a Stepdown Trigger Event has occurred and is in effect;
(xvi) with respect to each Class of Certificates, any Interest Carry
Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any
remaining Interest Carry Forward Amount for each such Class;
(xvii) the number and Stated Principal Balance (as of the preceding
Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;
(xviii) the number of Mortgage Loans for which Prepayment Charges were
received during the related Prepayment Period and, for each such Mortgage
Loan, the amount of Prepayment Charges received during the related
Prepayment Period and in the aggregate of such amounts for all such
Mortgage Loans since the Cut-off Date;
(xix) the amount and purpose of any withdrawal from the Collection
Accounts pursuant to Section 3.08(a)(viii);
(xx) the amount of any payments to each Class of Certificates that are
treated as payments received in respect of a REMIC "regular interest" or
REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a
REMIC "regular interest" or REMIC "residual interest";
(xxi) as of each Distribution Date, the amount, if any, to be
deposited in the Cap Contract Account pursuant to the related Cap Contract
as described in Section 4.04(k) and the amount thereof to be paid to the
Class A-1 Certificates, the Class A-2 Certificates, the Subordinate
Certificates and the Class C Certificates described in Section 4.04(k)
hereof;
(xxii) as of each Distribution Date, the amount, if any, to be
deposited in the Supplemental Interest Trust pursuant to the Swap Agreement
as described in Section 4.04(l) and the amount thereof to be paid to the
Certificates;
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(xxiii) any Floating Rate Certificate Carryover paid and all Floating
Rate Certificate Carryover remaining on each Class of the Class A, Class M
and Class B Certificates on such Distribution Date;
(xxiv) the number of Mortgage Loans with respect to which (i) a
reduction in the Mortgage Rate has occurred or (ii) the related borrower's
obligation to repay interest on a monthly basis has been suspended or
reduced pursuant to the Relief Act or the California Military and Veterans
Code, as amended; and the amount of interest not required to be paid with
respect to any such Mortgage Loans during the related Due Period as a
result of such reductions in the aggregate and with respect to the Group
One Mortgage Loans and the Group Two Mortgage Loans;
(xxv) with respect to each Class of Certificates, the amount of any
Non-Supported Interest Shortfalls on such Distribution Date;
(xxvi) the number and amount of pool assets at the beginning and
ending of each period, and updated pool composition information;
(xxvii) any material changes to methodology regarding calculations of
delinquencies and charge-offs;
(xxviii) information on the amount, terms and general purpose of any
advances made or reimbursed during the period, including the general use of
funds advanced and the general source of funds for reimbursements;
(xxix) any material modifications, extensions or waivers to pool asset
terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time;
(xxx) material breaches of pool asset representations or warranties or
transaction covenants;
(xxxi) information on ratio, coverage or other tests used for
determining any early amortization, liquidation or other performance
trigger and whether the trigger was met; and
(xxxii) information regarding any pool asset changes (other than in
connection with a pool asset converting into cash in accordance with its
terms), such as pool asset substitutions and repurchases (and purchase
rates, if applicable), and cash flows available for future purchases, such
as the balances of any prefunding or revolving accounts, if applicable.
(b) The Securities Administrator will make the Monthly Statement (and,
at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders, the Cap Contract
Counterparty, the Swap Counterparty, other parties to this Agreement and any
other interested parties via the Securities Administrator's Internet website.
The Securities Administrator's Internet website shall initially be located at
"xxx.xxxxxxxx.xxx". Assistance in using the website can be obtained by calling
the Securities Administrator (Attention: Xxxxx Xxxxxxxxx-Xxxxxx, who may be
reached directly at (000) 000-0000. Parties that are unable to use the website
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Securities Administrator
shall have the right to change the way the monthly statements to
Certificateholders are distributed in order to make such distribution more
convenient and/or more
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accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.
The Securities Administrator shall 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 and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
The Securities Administrator's responsibility for making the above
information available to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer,
Servicers and, if applicable, the Depositor and the Swap Counterparty, to the
extent the Servicers, Depositor and Swap Counterparty are required to provide
such information under this Agreement.
As a condition to access the Securities Administrator's internet website,
the Securities Administrator may require registration and the acceptance of a
disclaimer. The Securities Administrator will not be liable for the
dissemination of information in accordance with this Agreement.
(c) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Securities Administrator shall make
available on its website or cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder of record, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 4.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as are from time to time
in effect.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Class R Certificate each Form
1066Q and, upon request of the Holders of the Class R Certificate, each Form
1066, and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class R Certificate with respect to the
following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The Prepayment Assumption and any interest rate assumptions used
in determining the projected principal and interest cash flows described
above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of the REMICs with
respect to such regular interests or bad debt deductions claimed with
respect to the Mortgage Loans;
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(vi) The amount and timing of any non-interest expenses of the REMICs;
and
(vii) Any taxes (including penalties and interest) imposed on the
REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
A-1 $25,000.00 $1.00 $169,018,000
A-2A $25,000.00 $1.00 $476,933,000
A-2B $25,000.00 $1.00 $145,765,000
A-2C $25,000.00 $1.00 $202,353,000
A-2D $25,000.00 $1.00 $ 78,075,000
M-1 $25,000.00 $1.00 $ 50,235,000
M-2 $25,000.00 $1.00 $ 41,918,000
M-3 $25,000.00 $1.00 $ 28,962,000
M-4 $25,000.00 $1.00 $ 24,774,000
M-5 $25,000.00 $1.00 $ 23,397,000
M-6 $25,000.00 $1.00 $ 22,021,000
B-1 $25,000.00 $1.00 $ 20,645,000
B-2 $25,000.00 $1.00 $ 19,268,000
B-3 $25,000.00 $1.00 $ 15,139,000
R $ 100.00 N/A $ 100.00
C (1) (1) 100%
P (2) (2) (2)
----------
(1) The Class C Certificates shall not have minimum dollar denominations or
certificate notional amount and shall be issued in a minimum percentage
interest of 25%.
(2) The Class P Certificates shall not have minimum dollar denominations or
Certificate Principal Balances and shall be issued in a minimum percentage
interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the
Securities Administrator shall bind the Trust Fund, notwithstanding that such
individuals or any of them
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have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Securities Administrator by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any Affiliate thereof.
The Certificates sold in offshore transactions in reliance on Regulation S
shall be issued initially in the form of one or more permanent global
certificates in definitive, fully registered form without interest coupons with
the applicable legends set forth in Exhibit A hereto added to the form of each
such Certificate (each, a "Regulation S Book-Entry Certificate"), which shall be
deposited on behalf of the Holders of such Certificates represented thereby with
the Securities Administrator, as custodian for DTC and registered in the name of
a nominee of DTC, duly executed and authenticated by the Securities
Administrator and the Authenticating Agent as hereinafter provided. The
aggregate principal amounts of the Regulation S Book-Entry Certificates may from
time to time be increased or decreased by adjustments made on the records of the
Securities Administrator or DTC or its nominee, as the case may be, as
hereinafter provided.
The Certificates sold in reliance on Rule 144A shall be issued initially in
the form of one or more permanent global certificates in definitive, fully
registered form without interest coupons with the applicable legends set forth
in Exhibit A hereto added to the form of each such Certificate (each, a "Rule
144A Book-Entry Certificate"), which shall be deposited on behalf of the Holders
of such Certificates represented thereby with the Securities Administrator, as
custodian for DTC and registered in the name of a nominee of DTC, duly executed
and authenticated by the Securities Administrator and the Authenticating Agent
as hereinafter provided. The aggregate principal amounts of the Rule 144A
Book-Entry Certificates may from time to time be increased or decreased by
adjustments made on the records of the Securities Administrator or DTC or its
nominee, as the case may be, as hereinafter provided.
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Issuing Entity in which, subject to the provisions
of subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator 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 Securities
Administrator shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and of
like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
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No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Securities Administrator in accordance
with such Securities Administrator's customary procedures.
No Transfer of a Class C or Class P Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class C or Class P Certificate by Xxxxxxx
Xxxxx & Co. or, in connection with a transfer of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued, whether or not such notes are guaranteed by the NIMs Insurer)
each certify to the Securities Administrator in writing the facts surrounding
the Transfer in substantially the form set forth in Exhibit F (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A Letter") or
(ii) there shall be delivered to the Securities Administrator an Opinion of
Counsel that such Transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Securities Administrator or the Trustee. The Depositor shall
provide to any Holder of a Class C or Class P Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Securities Administrator shall cooperate with the Depositor in providing the
Rule 144A information referenced in the preceding sentence, including providing
to the Depositor such information in the possession of the Securities
Administrator regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Class C or Class P
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Depositor, the Securities Administrator and the Trustee against
any liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Securities Administrator and any
of their respective successors that: (i) such Person is not a "U.S. person"
within the meaning of Regulation S and was, at the time the buy order was
originated, outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule
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144A or (B) in an offshore transaction (as defined in Regulation S) in
compliance with the provisions of Regulation S, in each case in compliance with
the requirements of this Agreement; and it will notify such transferee of the
transfer restrictions specified in this Section.
No transfer of a Certificate that is neither an ERISA Restricted
Certificate nor a Class R Certificate shall be registered unless the transferee
provides the Securities Administrator with a representation that either (i) such
transferee is not, and is not acting for, on behalf of or with any assets of, an
employee benefit plan or other arrangement subject to Title I of ERISA or plan
subject to Section 4975 of the Code, or (ii) until the termination of the Swap
Agreement, the acquisition and holding of the Certificate are eligible for
exemptive relief under any of Section 408(b)(17) of ERISA or Section 4975(d)(20)
of the Code, Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0,
XXXX 91-38, PTCE 95-60 or PTCE 96-23.
No transfer of an ERISA Restricted Certificate or a Class R Certificate
shall be registered unless the Securities Administrator has received (A) a
representation to the effect that such transferee is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code or
a plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), and is
not directly or indirectly acquiring the ERISA Restricted Certificate or the
Class R Certificate by, on behalf of, or with any assets of any such plan
(collectively, "Plan"), or (B) solely in the case of ERISA Restricted
Certificates, (I) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation to the effect that such transferee is an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(II) solely in the case of an ERISA Restricted Certificate that is a Definitive
Certificate, an Opinion of Counsel satisfactory to the Securities Administrator,
and upon which the Securities Administrator and the NIMs Insurer shall be
entitled to rely, to the effect that the acquisition and holding of such
Certificate will not constitute or result in a nonexempt prohibited transaction
under Title I of ERISA or Section 4975 of the Code, or a violation of Similar
Law, and will not subject the Trustee, the Master Servicer, the Securities
Administrator, the Servicers, the NIMs Insurer or the Depositor to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Trustee, the Master Servicer,
the Securities Administrator, the Servicers, the NIMs Insurer or the Depositor.
Except in the case of a Definitive Certificate, the representations set
forth in the two immediately preceding paragraphs of this Subsection 5.02(a),
other than clause (B)(II) in the immediately preceding paragraph, shall be
deemed to have been made to the Securities Administrator by the transferee's
acceptance of a Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Certificate).
Notwithstanding any other provision herein to the contrary, any purported
transfer of a Certificate to or on behalf of a Plan without the delivery to the
Securities Administrator of a representation or an Opinion of Counsel
satisfactory to the Securities Administrator as described above shall be void
and of no effect. The Securities Administrator shall not be under any liability
to any Person for any registration or transfer of any Certificate that is in
fact not permitted by this Section 5.02(a), nor shall the Securities
Administrator be under any liability for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Securities Administrator in accordance with the foregoing
requirements. The Securities Administrator shall be entitled, but not obligated,
to recover from any Holder of any Certificate that was in fact a Plan and that
held such Certificate in violation of this Section
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5.02(a) all payments made on such Certificate at and after the time it commenced
such holding. Any such payments so recovered shall be paid and delivered to the
last preceding Holder of such Certificate that is not a Plan.
(b) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall be a Permitted Transferee and shall promptly notify the
Securities Administrator of any change or impending change in its status as
a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be purchased,
transferred or sold, directly or indirectly, except in accordance with the
provisions hereof. No Ownership Interest in a Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Class R
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (a) above, the
Securities Administrator shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed transferee in
the form attached hereto as Exhibit E-1 and an affidavit of the proposed
transferor in the form attached hereto as Exhibit E-2. In the absence of a
contrary instruction from the transferor of a Class R Certificate,
declaration (11) in Appendix A of the Transfer Affidavit may be left blank.
If the transferor requests by written notice to the Securities
Administrator prior to the date of the proposed transfer that one of the
two other forms of declaration (11) in Appendix A of the Transfer Affidavit
be used, then the requirements of this Section 5.02(b)(ii) shall not have
been satisfied unless the Transfer Affidavit includes such other form of
declaration.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class R Certificate, (B) to obtain a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Class R Certificate and (C) not to
Transfer its Ownership Interest in a Class R Certificate or to cause the
Transfer of an Ownership Interest in a Class R Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee. Further, no transfer, sale or other disposition of any
Ownership Interest in a Class R Certificate may be made to a person who is
not a U.S. Person (within the meaning of section 7701 of the Code) unless
such person furnishes the transferor and the Securities Administrator with
a duly completed and effective Internal Revenue Service Form W-8ECI (or any
successor thereto) and the Securities Administrator consents to such
transfer, sale or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class R Certificate. The Securities Administrator shall be
under no liability to any Person for any registration of Transfer of a
Class R Certificate that is in fact not permitted by Section 5.02(a) and
this Section 5.02(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
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the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit. The Securities
Administrator shall be entitled but not obligated to recover from any
Holder of a Class R Certificate that was in fact not a Permitted Transferee
at the time it became a Holder or, at such subsequent time as it became
other than a Permitted Transferee, all payments made on such Class R
Certificate at and after either such time. Any such payments so recovered
by the Securities Administrator shall be paid and delivered by the
Securities Administrator to the last preceding Permitted Transferee of such
Certificate.
(v) At the option of the Holder of the Class R Certificate, the Class
SWR Interest, the Class LTR Interest and the residual interest in the Upper
Tier REMIC may be severed and represented by separate certificates (with
the separate certificate that represents the Residual Interest also
representing all rights of the Class R Certificate to distributions
attributable to an interest rate on the Class R Certificate in excess of
the REMIC Pass-Through Rate); provided, however, that such separate
certification may not occur until the Securities Administrator receives an
Opinion of Counsel to the effect that separate certification in the form
and manner proposed would not result in the imposition of federal tax upon
the Trust Fund or any of the REMICs provided for herein or cause any of the
REMICs provided for herein to fail to qualify as a REMIC; and provided
further, that the provisions of Sections 5.02(a) and (c) will apply to each
such separate certificate as if the separate certificate were a Class R
Certificate. If, as evidenced by an Opinion of Counsel, it is necessary to
preserve the REMIC status of any of the REMICs provided for herein, the
Class SWR Interest, the Class LTR Interest and the residual interest in the
Upper Tier REMIC shall be severed and represented by separate certificates
(with the separate certificate that represents the Residual Interest also
representing all rights of the Class R Certificate to distributions
attributable to an interest rate on the Class R Certificate in excess of
the REMIC Pass-Through Rate).
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(b) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Securities Administrator or
the Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Issuing Entity, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Securities Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(c) The transferor of the Class R Certificate shall notify the
Securities Administrator in writing upon the transfer of the Class R
Certificate.
(d) [Reserved].
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Issuing Entity, the Depositor, the Securities Administrator or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates
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If (a) any mutilated Certificate is surrendered to the Securities
Administrator or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Securities Administrator and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator 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 Securities
Administrator 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 Securities Administrator and
its counsel) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Securities Administrator under the terms of this Section 5.03
shall be canceled and destroyed by the Securities Administrator in accordance
with its standard procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners
The NIMs Insurer, the Trustee, the Securities Administrator and any agent
of the NIMs Insurer, the Securities Administrator 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 none of the NIMs Insurer,
the Trustee, or the Securities Administrator, nor any agent of the NIMs Insurer,
the Trustee, or the Securities Administrator 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 Securities Administrator, (b) state that such Certificateholders desire
to communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the NIMs
Insurer or the Depositor shall request such information in writing from the
Securities Administrator, then the Securities Administrator shall, within ten
Business Days after the receipt of such request, provide the NIMs Insurer or the
Depositor or such Certificateholders at such recipients' expense the most recent
list of the Certificateholders of the Issuing Entity held by the Securities
Administrator, if any. The Depositor and every Certificateholder, by receiving
and holding a Certificate, agree that the Securities Administrator shall not be
held accountable by reason of the disclosure of any such information as to the
list of the Certificateholders hereunder, regardless of the source from which
such information was derived.
SECTION 5.06. Book-Entry Certificates
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class C, Class P and Class R Certificates shall be definitive
certificates. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08(a):
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(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Securities Administrator, the NIMs Insurer and
the Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of the Book-Entry
Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Securities Administrator and the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
In the event that Definitive Certificates are issued pursuant to Section
5.08(b), clauses (a) through (g) of this Section 5.06 shall continue to be
applicable with respect to all remaining Book-Entry Certificates.
SECTION 5.07. Notices to Depository
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Securities Administrator and the
Trustee shall give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates
(a) If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depository or the Depositor advises the Securities
Administrator and the Trustee that the Depository is no longer willing,
qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator of its intent to terminate
the
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book-entry system through the Depository and, upon receipt of notice of such
intent from the Depository, the Certificate Owners of the Book-Entry
Certificates agree to initiate such termination or (c) after the occurrence and
continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Securities Administrator, the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Securities
Administrator shall notify all Certificate Owners of such Book-Entry
Certificates and the NIMs Insurer, through the Depository, of the occurrence of
any such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Securities Administrator with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon surrender
to the Securities Administrator of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Securities Administrator shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Securities Administrator, to the extent applicable
with respect to such Definitive Certificates and the Securities Administrator
shall recognize the Holders of such Definitive Certificates as
Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency
The Securities Administrator will maintain or cause to be maintained at its
expense an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange. The Securities
Administrator initially designates its offices at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Global Securities and Trust
Services MLMI 2006-HE5 as offices for such purposes. The Securities
Administrator will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
SECTION 5.10. Authenticating Agents
(a) One or more Authenticating Agents (each, an "Authenticating
Agent") may be appointed hereunder each of which shall be authorized to act on
behalf of the Securities Administrator in authenticating the Certificates.
Wherever reference is made in this Agreement to the authentication of
Certificates by the Securities Administrator's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Securities Administrator by an Authenticating Agent and a certificate of
authentication executed on behalf of the Securities Administrator by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or any state
thereof, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to operate a trust business and subject to
supervision or examination by federal or state authorities. If the
Authenticating Agent is a party other than the Securities Administrator, the
Securities Administrator shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. LaSalle Bank
National Association is hereby appointed as the initial Authenticating Agent.
The Securities Administrator shall be the Authenticating Agent during any such
time as no other Authenticating Agent has been appointed and has not resigned.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency
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business of any Authenticating Agent, shall continue to be the Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Securities Administrator or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Securities Administrator
and the Depositor. Except with respect to the initial Authenticating Agent,
LaSalle Bank National Association, which shall be the Authenticating Agent for
so long as it is the Securities Administrator may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Depositor. Upon receiving a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance within the
provisions of this Section 5.10, the Securities Administrator may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICERS AND THE SECURITIES
ADMINISTRATOR
SECTION 6.01. Respective Liabilities of the Depositor, the Master Servicer,
the Servicers and the Securities Administrator
The Depositor, the Master Servicer, the Servicers and the Securities
Administrator 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, the Master
Servicer, the Servicers or the Securities Administrator
Except as provided in the next paragraph, the Depositor, the Master
Servicer, the Servicers and the Securities Administrator will each keep in full
effect its existence, rights and franchises as a corporation or banking
association under the laws of the United States or under the laws of one of the
States thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor, the Master Servicer, the Servicers or
the Securities Administrator may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Depositor, the Master
Servicer, the Servicers or the Securities Administrator shall be a party, or any
Person succeeding to the business of the Depositor, the Master Servicer, the
Servicers or the Securities Administrator, shall be the successor of the
Depositor, the Master Servicer, the Servicers or the Securities Administrator,
as the case may be, hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding (except for the execution of an assumption agreement
where such succession is not effected by operation
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of law); provided, however, that the successor or surviving Person to the
Servicer shall be qualified to sell mortgage loans to, and to service mortgage
loans on behalf of, Xxxxxx Xxx or Xxxxxxx Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Securities
Administrator, the Master Servicer, the Servicers and Others
None of the Depositor, the Master Servicer, the Servicers or the Securities
Administrator nor any of the directors, officers, employees or agents of the
Depositor, the Master Servicer, the Servicers or the Securities Administrators
hall be under any liability to the Issuing Entity or the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer, the
Servicers, the Securities Administrator or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Master Servicer, the Servicers, the Securities Administrator or any such Person
from any liability that would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer, the Servicers or the Securities Administrator and any
director, officer, employee or agent of the Depositor, the Master Servicer, the
Servicers or the Securities Administrator may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor, the Master Servicer, the
Servicers, the Securities Administrator and any director, officer, employee or
agent of the Depositor, the Master Servicer, the Servicers or the Securities
Administrator shall be indemnified by the Issuing Entity and held harmless
against any loss, liability or expense, incurred in connection with the
performance of their duties under this Agreement or incurred in connection with
any audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense (i) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder or (ii)
which does not constitute an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii). None of the Depositor, the
Master Servicer, the Servicers nor the Securities Administrator shall be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that any of the
Depositor, the Master Servicer, the Servicers or the Securities Administrator in
its discretion may undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and the interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be, expenses, costs and liabilities of the Issuing
Entity, and the Depositor, the Master Servicer, the Servicers and the Securities
Administrator shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
Notwithstanding anything herein to the contrary, in preparing or furnishing
any reports or certifications pursuant to this Agreement, the Master Servicer,
the Securities Administrator and each Servicer shall be entitled to rely
conclusively on the accuracy of the information or data provided to it by any
other party to the Agreement and shall have no liability for any errors therein.
In addition, the Master Servicer and the Securities Administrator shall be
entitled to be reimbursed out of the Master Servicer Collection Account and
Certificate Account respectively for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Master Servicer or Securities
Administrator on behalf of the Issuing Entity in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of each of the Master Servicer or Securities
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Administrator acting in its capacity as Master Servicer or Securities
Administrator hereunder, respectively, and (B) to the extent that the Securities
Administrator must engage persons not regularly in its employ to perform acts or
services on behalf of the Issuing Entity, which acts or services are not in the
ordinary course of the duties of a securities administrator, in the absence of a
breach or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons), except any such compensation, expense,
disbursement or advance that either (i) arises from its negligence, bad faith or
willful misconduct or (ii) does not constitute an "unanticipated expense" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
In taking or recommending any course of action pursuant to this Agreement,
unless specifically required to do so pursuant to this Agreement, the Master
Servicer shall not be required to investigate or make recommendations concerning
potential liabilities which the Issuing Entity might incur as a result of such
course of action by reason of the condition of the Mortgage Properties but shall
give notice to the Trustee if it has notice of such potential liabilities.
The Master Servicer shall not be liable for any act or omission of the
Trustee, the Securities Administration, the Depositor or the Servicers.
The Master Servicer may perform any of its duties hereunder or exercise its
rights hereunder either directly or through Affiliates, agents or attorneys..
SECTION 6.04. Limitation on Resignation of a Servicer
Subject to the provisions of Section 7.01, the second paragraph of Section
7.02, the second paragraph of Section 6.02 and the following paragraph of this
Section 6.04, neither Servicer shall resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of either Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee, the NIMs Insurer and the Master Servicer.
No such resignation shall become effective until the Master Servicer or a
successor servicer reasonably acceptable to the NIMs Insurer and the Master
Servicer is appointed and has assumed the related Servicer's responsibilities,
duties, liabilities and obligations hereunder. Any such resignation shall not
relieve the related Servicer of any of the obligations specified in Section 7.01
and 7.02 as obligations that survive the resignation or termination of the
related Servicer.
Notwithstanding anything to the contrary in the previous paragraph of this
Section 6.04, the Trustee, the Master Servicer, the Securities Administrator,
the Depositor and the NIMs Insurer hereby specifically (i) consent to the pledge
and assignment by the Servicers of all the Servicers' right, title and interest
in, to and under this Agreement to the Servicing Rights Pledgee, if any, for the
benefit of certain lenders, and (ii) agree that upon delivery to the Trustee by
the Servicing Rights Pledgee of a letter signed by the related Servicer whereby
such Servicer shall resign as a Servicer under this Agreement, notwithstanding
anything to the contrary which may be set forth in Section 3.04 above, the
Trustee shall appoint the Servicing Rights Pledgee or its designee as successor
servicer, provided that the related Servicer's resignation will not be effective
unless, at the time of such appointment, the Servicing Rights Pledgee or its
designee (i) meets the requirements of a successor servicer under Section 7.03
of this Agreement (including being acceptable to the Rating Agencies), provided,
that the consent and approval of the Trustee, the Master Servicer, the
Securities Administrator, the Depositor and the NIMS Insurer shall be deemed to
have been given to the Servicing Rights Pledgee or its designee, and the
Servicing Rights Pledgee and its designee are hereby agreed to be acceptable to
the Trustee, the Master Servicer, the Securities Administrator, the Depositor
and the NIMS Insurer and (ii) agrees to be subject to the terms of this
Agreement. If, pursuant to any provision hereof, the duties of either Servicer
is transferred to a
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successor servicer, the entire amount of the Servicing Fee and other
compensation payable to such Servicer pursuant hereto shall thereafter be
payable to such successor servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds
Each Servicer shall, for so long as it acts as a servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as a
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for
Persons performing servicing for mortgage loans purchased by Xxxxxx Mae or
Xxxxxxx Mac. Each Servicer shall provide the Trustee, the NIMs Insurer and the
Master Servicer, upon request and reasonable notice, with copies of such
policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. Each Servicer may be deemed to have
complied with this provision if an Affiliate of the related 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
such Servicer. In the event that any such policy or bond ceases to be in effect,
the related Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer meeting the
requirements set forth above as of the date of such replacement. Any such policy
or fidelity bond shall by its terms not be cancelable without thirty days' prior
written notice to the Trustee.
SECTION 6.06. Limitation on Resignation of the Master Servicer
The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee, as
successor Master Servicer, or another successor Master Servicer shall have
assumed the Master Servicer's responsibilities, duties, liabilities (other than
those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. If the Master Servicer and the Securities
Administrator are the same Person, then at any time the Master Servicer is
terminated hereunder, the Securities Administrator shall likewise be removed as
securities administrator hereunder.
SECTION 6.07. Assignment of Master Servicing
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder and shall (a) be a Person which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) be reasonably satisfactory to the Trustee and the Depositor;
and (d) execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee and which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master
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Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an independent Opinion of Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising out of
acts or omissions prior to the effective date thereof..
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default
With respect to each Servicer, "Event of Default," wherever used herein,
means any one of the following events:
(i) any failure by such Servicer to make any Advance, to deposit in
the related Collection Account or the Master Servicer Collection Account
or remit to the Securities Administrator any payment (excluding a payment
required to be made under Section 4.01 hereof) required to be made under
the terms of this Agreement, which failure shall continue unremedied for
three Business Days and, with respect to a payment required to be made
under Section 4.01 hereof, for one Business Day, after the date on which
written notice of such failure shall have been given to the related
Servicer by the Master Servicer, the Securities Administrator or the
Depositor, or to the Securities Administrator, the Depositor and the
related Servicer by the NIMs Insurer or the Holders of Certificates
evidencing greater than 50% of the Voting Rights evidenced by the
Certificates; or
(ii) any failure by such Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
such Servicer contained in this Agreement or any representation or warranty
shall prove to be untrue, which failure or breach shall continue unremedied
for a period of 60 days after the date on which written notice of such
failure shall have been given to such Servicer by the Master Servicer, the
Securities Administrator by the Trustee or the Depositor, or to the Master
Servicer, the Securities Administrator, the Trustee and the Depositor by
the Holders of Certificates evidencing greater than 50% of the Voting
Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against such Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) consent by such Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to the Servicer or
all or substantially all of the property of the Servicer; or
(v) admission by such Servicer in writing of its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
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(vi) any failure by such Servicer to duly perform, within the required
time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to such Servicer by the Master
Servicer or any other party to this Agreement.
If an Event of Default shall occur with respect to a Servicer, then, and in
each and every such case, so long as such Event of Default shall not have been
remedied within the applicable grace period, the Master Servicer may, or at the
direction of the NIMs Insurer or the Holders of Certificates evidencing greater
than 50% of the Voting Rights evidenced by the Certificates (with the written
consent of the NIMs Insurer, except after a NIMs Insurer Default), shall, by
notice in writing to the related Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the related Servicer of such written notice, all authority and power of such
Servicer hereunder, whether with respect to the related Mortgage Loans or
otherwise, shall pass to and be vested in the Master Servicer. To the extent the
Event of Default resulted from the failure of the Servicer to make a required
Advance, the Master Servicer shall thereupon make any Advance described in
Section 4.01 hereof subject to Section 3.04 hereof. The Master Servicer is
hereby authorized and empowered to execute and deliver, on behalf of the related
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 related Servicer
to pay amounts owed pursuant to Article VI. Each Servicer agrees to cooperate
with the Master Servicer as successor servicer and any successor servicer
appointed by the Master Servicer in effecting the termination of the related
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Master Servicer as successor servicer of all cash amounts
which shall at the time be credited to the related Collection Account, or
thereafter be received with respect to the Mortgage Loans. The related Servicer
and the Master Servicer shall promptly notify the Rating Agencies of the
occurrence of an Event of Default, such notice to be provided in any event
within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicers
hereunder, the related Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a related Mortgage Loan that was due prior
to the notice terminating such Servicer's rights and obligations as a Servicer
hereunder and received after such notice, that portion thereof to which such
Servicer would have been entitled pursuant to Section 3.08(a), and any other
amounts payable to such Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the related Servicer hereunder, any
liabilities of such Servicer which accrued prior to such termination shall
survive such termination.
(b) With respect to the Master Servicer, "Event of Default," wherever
used herein, means any one of the following events:
(i) any failure by the Master Servicer to make any required Advance,
to deposit in the Master Servicer Collection Account or remit to the
Certificate Administrator any payment required to be made under the terms
of this Agreement, which failure shall continue unremedied for three (3)
Business Days after the date on which written notice of such failure shall
have been given to the Master Servicer by the Trustee or the Depositor, or
to the Trustee, the Depositor and the Master
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Servicer by the Certificateholders evidencing greater than 50% of the
Voting Rights evidenced by the Certificate; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of sixty (60) days after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Trustee or the Depositor, or to the Master Servicer, the Trustee and the
Depositor by the Certificateholders evidencing greater than 50% of the
Voting Rights evidenced by the Certificate; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of
sixty (60) consecutive days; or
(iv) consent by the Master Servicer to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to the Master
Servicer or all or substantially all of the property of the Master
Servicer; or
(v) admission by the Master Servicer in writing of its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) any failure by the Master Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.20 of
this Agreement, which failure continues unremedied for a period of ten (10)
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by the
Trustee or any other party to this Agreement.
If an Event of Default shall occur with respect to the Master Servicer,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied within the applicable grace period, the Trustee may, or
at the direction of the Certificateholders evidencing greater than 50% of the
Voting Rights evidenced by the Certificate shall, by notice in writing to the
Master Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Master Servicer under this Agreement and in and to the
related Mortgage Loans and the proceeds thereof, other than its rights as a
Securityholder hereunder. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer hereunder,
whether with respect to the related Mortgage Loans or otherwise, shall pass to
and be vested in the Trustee. To the extent the Event of Default resulted from
the failure of the Master Servicer to make a required Advance, the Trustee
(solely in its capacity as successor master servicer) shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 11.01 hereof. The
Trustee (solely in its capacity as successor master servicer) is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the
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Master Servicer to pay amounts owed pursuant to Article VI. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
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 Master Servicer Collection Account, or thereafter be received
with respect to the Mortgage Loans. The Master Servicer and the Trustee shall
promptly notify the Rating Agencies of the occurrence of an Event of Default,
such notice to be provided in any event within two Business Days of such
occurrence.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 3.08(b), and
any other amounts payable to the Master Servicer hereunder the entitlement to
which arose prior to the termination of its activities hereunder.
Notwithstanding anything herein to the contrary, upon termination of the Master
Servicer hereunder, any liabilities of the Master Servicer which accrued prior
to such termination shall survive such termination.
SECTION 7.02. Master Servicer to Act; Appointment of Successor
On and after the time each Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Master Servicer shall, to the extent
provided in Section 3.04, be the successor to the related Servicer in its
capacity as a 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 such Servicer by the terms and provisions
hereof and applicable law including the obligation to make advances pursuant to
Section 4.01. As compensation therefor, subject to the last paragraph of Section
7.01, the Master Servicer shall be entitled to all fees, compensation and
reimbursement for costs and expenses that the related Servicer would have been
entitled to hereunder if the related Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to a Servicer in accordance with Section 7.01 hereof, the Master Servicer may,
if it shall be unwilling to so act, or shall, if it is prohibited by applicable
law from making Advances pursuant to Section 4.01 hereof or if it is otherwise
unable to so act, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution provided the
appointment of such successor shall be approved by the NIMs Insurer and does not
adversely affect the then current rating of the Certificates by each Rating
Agency as the successor to the related Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of such Servicer
hereunder. Any successor Servicer shall be an institution that is acceptable to
the NIMs Insurer and is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor, the
Trustee and the Master Servicer an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the related Servicer
(other than liabilities of the related Servicer under Section 6.03 hereof
incurred prior to termination of the related Servicer under Section 7.01), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to a Servicer hereunder shall be effective until the
Master Servicer shall have consented thereto, prior written consent of the NIMs
Insurer is obtained (provided, that such prior written consent shall not be
required in the event that the Servicing Rights Pledgee or its designee is so
appointed as successor servicer) and written notice of such proposed appointment
shall have been provided by the Securities Administrator to each
Certificateholder. The Master Servicer shall not resign as a servicer until a
successor servicer has been appointed and has
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accepted such appointment. Pending appointment of a successor to a Servicer
hereunder, the Master Servicer, unless the Master Servicer is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Master Servicer may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the related Servicer hereunder. The Master Servicer and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer 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 a
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to either Servicer as a servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as a servicer maintain in force the policy or policies that the related Servicer
is required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders
(a) Upon any termination of or appointment of a successor to the
related Servicer, the Securities Administrator shall give prompt written notice
thereof to Certificateholders, the Depositor, the Master Servicer and to each
Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to the Master Servicer, all
Certificateholders and the Rating Agencies notice of each such Event of Default
hereunder known to the Securities Administrator, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 8.01. Duties of the Trustee and the Securities Administrator
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, and the Securities
Administrator, shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement. In case an Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. In case an Event of
Default or other default by the Master Servicer, either Servicer or the
Depositor hereunder shall occur and be continuing, the Trustee shall, at the
written direction of the majority of the Certificateholders or the NIMs Insurer,
or may, proceed to protect and enforce its rights and the rights of the
Certificateholders or the NIMs Insurer under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee, the NIMs Insurer and the
Certificateholders.
Each of the Trustee, and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Trustee that are
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specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform on their face to
the requirements of this Agreement. If any such instrument is found not to
conform on its face to the requirements of this Agreement in a material manner,
the Trustee or the Securities Administrator, as the case may be, shall take such
action as it deems appropriate to have the instrument corrected and if the
instrument is not corrected to the its satisfaction, the Securities
Administrator, will provide notice to the Certificateholders and the NIMs
Insurer and take such further action as directed by the Certificateholders and
the NIMs Insurer.
No provision of this Agreement shall be construed to relieve the Trustee or
the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own misconduct, its negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided,
however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee, and at all times, the duties and obligations of
the Securities Administrator shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable, individually or as Trustee or Securities
Administrator, as applicable, except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee or the Securities Administrator and, the Trustee and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee or the Securities Administrator and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by the
proper authorities respecting any matters arising hereunder;
(ii) neither the Trustee nor the Securities Administrator shall,
individually or as Trustee or Securities Administrator, as applicable, be
liable for an error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee unless the Trustee or Securities
Administrator, as applicable was negligent or acted in bad faith or with
willful misfeasance; and
(iii) neither the Trustee nor the Securities Administrator shall
be liable, individually or as Trustee, with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the NIMs Insurer or the Holders in accordance with this
Agreement relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request and
conclusively rely upon and shall be fully protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the Trustee and the Securities Administrator may consult with
counsel of its choice and any advice or Opinion of Counsel shall be full
and complete authorization and
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protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator shall be
liable for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) at all times the Securities Administrator and prior to the
occurrence of an Event of Default hereunder and after the curing of all
Events of Default that may have occurred, the Trustee, in each case shall
not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing so to do by the NIMs Insurer or the Holders of
each Class of Certificates evidencing not less than 25% of the Voting
Rights of such Class;
(v) the Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, accountants or attorneys or
independent contractors and the Trustee and the Securities Administrator
will not be responsible for any misconduct or negligence on the part of any
agent, custodian, accountant, attorney or independent contractor appointed
with due care by it hereunder;
(vi) neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such liability is not assured to it;
(vii) neither the Trustee nor the Securities Administrator shall be
liable, individually or as Trustee or Securities Administrator, as
applicable, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(viii) neither the Trustee nor the Securities Administrator shall be
deemed to take notice or be deemed to have notice or have knowledge of an
Event of Default until a Responsible Officer of the Trustee or the
Securities Administrator, as applicable, shall have received written notice
thereof and in the absence of such written notice, the Trustee and the
Securities Administrator may conclusively assume that there is no Event of
Default;
(ix) the Trustee and the Securities Administrator shall be under no
obligation to exercise any of the trusts or powers vested in it by this
Agreement or to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation hereto
at the request, order or direction of any of the NIMs Insurer or the
Certificateholders, pursuant to the provisions of this Agreement, unless
the NIMs Insurer or such Certificateholders shall have offered to the
Trustee or Securities Administrator reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby;
(x) if requested by a Servicer, the Trustee may appoint such Servicer
as the Trustee's attorney-in-fact in order to carry out and perform certain
activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may
be agreed to by the Trustee and such Servicer. The Trustee shall have no
liability for any action or
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inaction of such Servicer in connection with such power of attorney and the
Trustee shall be indemnified by such Servicer for all liabilities, costs
and expenses incurred by the Trustee in connection with such Servicer's use
or misuse of such powers of attorney;
(xi) in order to comply with its duties under the U.S.A. Patriot Act,
the Trustee, shall and the Securities Administrator may obtain and verify
certain information and documentation from the other parties hereto,
including but not limited to, such party's name, address and other
identifying information.
(xii) the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable for other than
its negligence or willful misconduct in the performance of such act; and
(xiii) the Trustee and the Securities Administrator shall not be
required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates or in its capacity as Trustee,
subject to the provisions of this Agreement. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
benefit of the Holders in respect of which such judgment has been recovered.
Neither the Securities Administrator, the Trustee nor the Custodian shall have
any duty (A) to see to any recording, filing, or depositing of this Agreement or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
rerecording, refiling or redepositing, as applicable, thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund.
(c) The Custodian shall be entitled to all of the rights, protections,
exculpations, benefits, indemnities and immunities as are afforded to the
Trustee hereunder.
SECTION 8.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans
The recitals contained herein shall be taken as the statements of the
Depositor or the related Servicers, as the case may be, and the Trustee, the
Master Servicer and the Securities Administrator assume no responsibility for
their correctness. None of the Trustee, the Securities Administrator or the
Master Servicer makes any representation as to the validity or sufficiency of
this Agreement, of any Mortgage Loan, or any related document other than with
respect to the execution and authentication of the Certificates, if it so
executed or authorized the Certificates. The Trustee shall not be accountable
for the use or application by the Depositor, the Securities Administrator, the
Master Servicer or the Servicers of any funds paid to the Depositor, the
Securities Administrator, the Master Servicer or either Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the related Collection
Account, Master Servicer Collection Account or the Certificate Account by the
Depositor, the Securities Administrator, the Master Servicer or the Servicers.
SECTION 8.04. Trustee and Securities Administrator May Own Certificates
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Each of the Trustee and the Securities Administrator in its individual or
any other capacity may become the owner or pledgee of Certificates with the same
rights as it would have if it was not the Trustee or the Securities
Administrator.
SECTION 8.05. Trustee's and Securities Administrator's Fees and Expenses
The Securities Administrator shall be entitled to receive on each
Distribution Date the Securities Administrator Fee. The Securities Administrator
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as shall be agreed to in writing by the
Securities Administrator and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee.
SECTION 8.06. Indemnification and Expenses of Trustee
(a) The Trustee and the Custodian and each of its respective
directors, officers, employees and agents shall be entitled to indemnification
from the Issuing Entity for any loss, liability or expense incurred in
connection with (i) any audit, controversy or judicial proceeding relating to a
governmental authority or any legal proceeding incurred without negligence or
willful misconduct on their part, arising out of, or in connection with the
acceptance or administration of the trusts created hereunder and (ii) the
performance of their duties hereunder, including any applicable fees and
expenses payable hereunder, and the costs and expenses of defending themselves
against any claim in connection with the exercise or performance of any of their
powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given the
Depositor written notice thereof promptly after the Trustee shall have
knowledge thereof; provided that failure to so notify shall not relieve the
Issuing Entity of the obligation to indemnify the Trustee; however, any
reasonable delay by the Trustee to provide written notice to the Depositor
and the Holders promptly after the Trustee shall have obtained knowledge of
a claim shall not relieve the Issuing Entity of the obligation to indemnify
the Trustee under this Section 8.06;
(ii) while maintaining control over its own defense, the Trustee shall
reasonably cooperate and consult with the Depositor in preparing such
defense;
(iii) notwithstanding anything to the contrary in this Section 8.06,
the Issuing Entity shall not be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Depositor, which
consent shall not be unreasonably withheld or delayed; and
(iv) indemnification therefor would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii).
Any indemnification payments to the Trustee (or a custodian) pursuant to
this Section 8.06(a) shall be allocated first to principal and then, to the
extent remaining, to interest.
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee, the Custodian and any director, officer, employee or
agent of the Trustee or Custodian shall be indemnified, by the Trust Fund and
held harmless against any loss, liability,
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reasonable expenses, disbursements and advancements incurred or made by the
Trustee in accordance with this Agreement (including fees and expenses of its
counsel and all persons not regularly in its employment), except any such
expenses, disbursements and advances that either (i) arise from its negligence,
bad faith or willful misconduct or (ii) do not constitute "unanticipated
expenses" within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
(c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $400,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and there is a NIMs Insurer and shall cease to apply
after the date on which any NIM Notes are paid in full or if there is no NIMs
Insurer; provided further, however, that amounts incurred by the Trustee in
excess of such annual limit in any calendar year shall be payable to the Trustee
in succeeding calendar years, subject to such annual limit for each applicable
calendar year. Any amounts reimbursable hereunder not in excess of this cap may
be withdrawn by the Trustee from the Certificate Account at any time.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Trustee be liable for special, indirect or consequential damage of any
kind whatsoever (including but not limited to lost profits), even if the Trustee
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee or the Custodian and
shall be construed to include, but not be limited to any loss, liability or
expense under any environmental law.
SECTION 8.07. Eligibility Requirements for Trustee
The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a long-term deposit rating of
at least "A2" by Moody's and "A" by S&P and any successor trustee appointed
pursuant to Section 8.08 of this Agreement shall have a short-term S&P rating of
at least "A-1". If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.07 the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 8.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.08 hereof. The corporation or national banking association serving as
Trustee may have normal banking and trust relationships with the Depositor, the
Securities Administrator, the NIMs Insurer and their respective Affiliates;
provided, however, that such corporation cannot be an Affiliate of either
Servicer other than the Trustee in its role as successor to either Servicer.
SECTION 8.08. Resignation and Removal of Trustee and Securities
Administrator
Each of the Trustee or the Securities Administrator, as applicable, may at
any time resign and be discharged from the trusts hereby created by (1) giving
written notice of resignation to the Depositor, the Servicers, and the
Securities Administrator or Trustee, as applicable by mailing notice of
resignation by first class mail, postage prepaid, to the Certificateholders at
their addresses appearing on the Certificate Register and each Rating Agency,
not less than 60 days before the
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date specified in such notice when, subject to Section 8.09, such resignation
is to take effect, and (2) acceptance of appointment by a successor trustee or
successor securities administrator, as applicable acceptable to the NIMs Insurer
in accordance with Section 8.09 and meeting the qualifications set forth in
Section 8.07. If no successor trustee or securities administrator shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee or Securities Administrator, as applicable
shall cease to be eligible in accordance with the provisions of Section 8.07
hereof and shall fail to resign after written request thereto by the Depositor
or the NIMs Insurer or (ii) the Trustee or Securities Administrator, as
applicable 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 Securities
Administrator, as applicable or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the
Trustee or Securities Administrator, as applicable and shall promptly appoint a
successor trustee or securities administrator, as applicable by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee and one copy of which shall be delivered to the successor trustee or
securities administrator, as applicable.
The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder, may at any time
remove the Trustee Securities Administrator, as applicable and the Depositor
shall appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized
(or by the NIMs Insurer), one complete set of which instruments shall be
delivered by the successor trustee to the related Servicer, one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to the NIMs Insurer and each
Rating Agency by the successor trustee.
Any resignation or removal of the Trustee or Securities Administrator, as
applicable and appointment of a successor trustee pursuant to any of the
provisions of this Section 8.08 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.09 hereof.
If the Securities Administrator and the Master Servicer are the same
Person, then at any time the Securities Administrator resigns or is removed
hereunder, the Master Servicer shall likewise be terminated as master servicer
hereunder.
SECTION 8.09. Successor Trustee
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIMs Insurer and the Securities Administrator 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
like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
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SECTION 8.10. Merger or Consolidation of Trustee
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIMs Insurer to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be compensated by the
Trust Fund and subject to the written approval of the Master Servicer and the
NIMs Insurer. The Trustee shall not be liable for the actions of any co-trustee
appointed with due care; provided that the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Master Servicer and the
NIMs Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to a Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee, with the consent of the NIMs Insurer, may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
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Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to each
Servicer, the Securities Administrator, the NIMs Insurer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.12. Tax Matters
(a) It is intended that each of the REMICs provided for herein shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. It is also intended
that each of the grantor trusts provided for in Section 2.07 hereof shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such grantor trust to qualify as, a grantor trust under the
provisions of Subpart E, Part I of Subchapter J of the Code. In furtherance of
such intention, the Securities Administrator covenants and agrees that it shall
act as agent (and the Securities Administrator is hereby appointed to act as
agent) on behalf of each of the REMICs provided for herein and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of the REMICs and grantor
trusts provided for herein, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions or other applicable
law, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass through entity in which a Person that is not a Permitted Transferee
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is the record holder of an interest (the reasonable cost of computing and
furnishing such information may be charged to the Person liable for such tax);
(f) to the extent that they are under its control conduct the affairs of each of
the REMICs and grantor trusts provided for herein at all times that any
Certificates are outstanding so as to maintain the status of each of the REMICs
provided for herein as a REMIC under the REMIC Provisions and the status of each
of the grantor trusts provided for herein as a grantor trust under Subpart E,
Part I of Subchapter J of the Code; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any of the REMICs provided for herein or result in the imposition of
tax upon any such REMIC; (h) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the grantor trust
status under Subpart E, Part I of Subchapter J of the Code of any of the grantor
trusts provided for herein or result in the imposition of tax upon any such
grantor trust; (i) pay, from the sources specified in the last paragraph of this
Section 8.12(a), the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on each of the REMICs
provided for herein prior to the termination of the Trust Fund when and as the
same shall be due and payable (but such obligation shall not prevent the
Securities Administrator or any other appropriate Person from contesting any
such tax in appropriate proceedings and shall not prevent the Securities
Administrator from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (j) sign or cause to be signed federal, state
or local income tax or information returns; (k) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs and grantor trusts
provided for herein; and (l) as and when necessary and appropriate, represent
each of the REMICs provided for herein in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any of
the REMICs provided for herein, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any of the REMICs provided for herein, and otherwise act on behalf
of each of the REMICs provided for herein in relation to any tax matter
involving any of such REMICs or any controversy involving the Trust Fund.
In order to enable the Securities Administrator to perform its duties as
set forth herein, the Depositor shall provide, or cause to be provided, to the
Securities Administrator within 10 days after the Closing Date all information
or data that the Securities Administrator requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor, any such additional information or data that the
Securities Administrator may, from time to time, request in order to enable the
Securities Administrator to perform its duties as set forth herein. The
Depositor hereby agrees to indemnify the Securities Administrator for any
losses, liabilities, damages, claims or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Securities Administrator on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any of
the REMICs provided for herein as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of any of such REMICs as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Securities Administrator, if any such other tax arises out of or
results from a breach by the Securities Administrator of any of its obligations
under this Agreement or as a result of the location of the Securities
Administrator, (ii) any party hereto (other than the Securities Administrator)
to the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other
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party or (iii) in all other cases, or in the event that any liable party here
fails to honor its obligations under the preceding clauses (i) or (ii), any such
tax will be paid first with amounts (other than amounts derived by the Issuing
Entity from a payment on the Cap Contracts or amounts received by the
Supplemental Interest Trust as payments on the Swap Agreement) otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts (other than amounts derived by the Issuing Entity
from a payment on the Cap Contracts or amounts received by the Supplemental
Interest Trust as payments on the Swap Agreement) otherwise to be distributed to
all other Certificateholders in the following order of priority: first, to the
Class C Certificates (pro rata), second to the Class B-3 Certificates (pro
rata), third to the Class B-2 Certificates (pro rata), fourth to the Class B-1
Certificates (pro rata), fifth to the Class M-6 Certificates (pro rata), sixth
to the Class M-5 Certificates (pro rata), seventh to the Class M-4 Certificates
(pro rata), eighth to the Class M-3 Certificates (pro rata), ninth to the Class
M-2 Certificates (pro rata), tenth to the Class M-1 Certificates (pro rata) and
eleventh to the Class A Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class R
Certificate, the Securities Administrator is hereby authorized pursuant to such
instruction to retain on any Distribution Date, from the Holders of the Class R
Certificate (and, if necessary, from the Holders of all other Certificates in
the priority specified in the preceding sentence), funds otherwise distributable
to such Holders in an amount sufficient to pay such tax. The Securities
Administrator agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.
(b) Each of the Depositor, the Master Servicer, the Servicers, the
Trustee and the Securities Administrator agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans
(a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Master Servicer, the Servicers, the Securities Administrator
and the Trustee created hereby with respect to the Trust Fund shall terminate
upon the earlier of (a) an Optional Termination and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement, as applicable. In no event
shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator will attempt to terminate the
Trust Fund by conducting an auction of all of the Mortgage Loans and REO
Properties via a solicitation of bids from at least three (3) bidders, each of
which shall be a nationally recognized participant in mortgage finance (the
"Auction"). In addition, the Securities Administrator will also solicit a bid
from each Holder of a Class C Certificate. The Depositor and the Securities
Administrator agree to work in good faith to develop bid procedures in advance
of the Initial Optional Termination Date to govern the operation of the Auction.
The Securities Administrator shall be entitled to retain an investment banking
firm and/or other agents in connection with the Auction, the cost of which shall
be included in the Optional Termination Price (unless an
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Optional Termination does not occur in which case such costs shall be an expense
of the Trust Fund). The Securities Administrator shall accept the highest bid
received at the Auction; provided that the amount of such bid equals or exceeds
the Optional Termination Price. The Securities Administrator shall determine the
Optional Termination Price based upon information provided by (a) each Servicer
with respect to the amounts described in clauses (i) and (ii) of the definition
of "Optional Termination Price" and (b) the Depositor with respect to the
information described in clauses (iii) and (iv) of the definition of "Optional
Termination Price"; provided, however, that with respect to the Swap Termination
Payment portion of the amounts described in clause (iv) of the definition of
"Optional Termination Price", the Securities Administrator shall notify the Swap
Counterparty at least three (3) Business Days prior to the date of the Auction
of its intention to conduct such Auction and shall request from the Swap
Counterparty a good faith written estimate of the Swap Termination Payment based
upon termination of the Swap Agreement on or subsequent to the date of the
Auction but not later than two (2) Business Days prior to the related
Distribution Date. The Securities Administrator may conclusively rely upon the
information provided to it in accordance with the immediately preceding sentence
and shall not have any liability for the failure of any party to provide such
information. The Securities Administrator shall notify the bidders of the
estimated Swap Termination Payment received by the Securities Administrator from
the Swap Counterparty and that the winning bidder will be responsible for the
final Swap Termination Payment which may be higher than such estimated Swap
Termination Payment. If the Auction results in a winning bid, the Securities
Administrator shall immediately notify the Swap Counterparty that an Optional
Termination has occurred and that final distributions on the Certificates will
be made on the immediately following Distribution Date. Upon such notice, the
Swap Counterparty shall inform the Securities Administrator in writing of the
final Swap Termination Payment amount owed to the Swap Counterparty and the
Securities Administrator shall communicate the final Swap Termination Payment
amount to the winning bidder.
If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price or otherwise, the NIMS
Insurer, if any, may, on any Distribution Date following such Auction, at its
option, terminate the Trust Fund by purchasing all of the Mortgage Loans and REO
Properties at a price equal to the Optional Termination Price. If an Optional
Termination does not occur as a result of the Auction's failure to achieve the
Optional Termination Price and the NIMS Insurer fails to exercise its option to
purchase all of the Mortgage Loans, Wilshire as a servicer may, on any
Distribution Date following such Auction, at its option, terminate the Trust
Fund by purchasing all of the Mortgage Loans and REO Properties at a price equal
to the Optional Termination Price. Upon the exercise of such option by the NIMs
Insurer or Wilshire, as the case may be, the Securities Administrator shall
immediately notify the Swap Counterparty that an Optional Termination has
occurred and that final distributions on the Certificates will be made on the
immediately following Distribution Date. Upon such notice, the Swap Counterparty
shall inform the Securities Administrator of the final Swap Termination Payment
amount owed to the Swap Counterparty. In connection with any such optional
termination, the Optional Termination Price shall be delivered to the Securities
Administrator no later than three Business Days immediately preceding the
related Distribution Date. Notwithstanding anything to the contrary herein, the
Optional Termination Amount paid to the Securities Administrator by the winning
bidder at the Auction or by Wilshire shall be deposited by the Securities
Administrator directly into the Certificate Account immediately upon receipt.
Upon any termination as a result of an Auction, the Securities Administrator
shall, out of the Optional Termination Amount deposited into the Certificate
Account, (x) reimburse the Securities Administrator for its costs and expenses
necessary to conduct the Auction and any other unreimbursed amounts owing to it
and (y) pay to each Servicer, the aggregate amount of any unreimbursed
out-of-pocket costs and expenses owed to each Servicer and any unpaid or
unreimbursed Servicing Fees, Advances and Servicing Advances. Notwithstanding
anything herein to the contrary, only an amount equal to the Optional
Termination Price, reduced by the portion thereof consisting of the sum of (x)
any Swap Termination Payment and (y) the amount of any unpaid Net Swap Payments
that
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would not otherwise be funded by the Optional Termination Price but for clause
(iv) of the definition of "Optional Termination Price" (such portion, the "Swap
Optional Termination Payment"), shall be made available for distribution to the
Certificates. The Swap Optional Termination Payment shall be withdrawn by the
Securities Administrator from the Certificate Account and remitted to the
Supplemental Interest Trust for payment to the Swap Counterparty, it being
understood that the Swap Termination Payment portion of such Swap Optional
Termination Payment shall be an amount equal to the actual Swap Termination
Payment amount determined by the Swap Counterparty upon its receipt of notice
from the Securities Administrator of the Optional Termination of the Trust as
described above in this Section 9.01(b). The Swap Optional Termination Payment
shall not be part of any REMIC and shall not be paid into any account which is
part of any REMIC.
(c) Notwithstanding anything to the contrary in clause (b) above, in
the event that the Securities Administrator receives the written opinion of a
nationally recognized participant in mortgage finance acceptable to the Sponsor
that the Mortgage Loans and REO Properties to be included in the Auction will
not be saleable at a price sufficient to achieve the Optional Termination Price,
the Securities Administrator need not conduct the Auction. In such event,
Wilshire as a servicer shall have the option to purchase the Mortgage Loans and
REO Properties at the Optional Termination Price as of the Initial Optional
Termination Date.
SECTION 9.02. Final Distribution on the Certificates
If on any Determination Date, (i) the Securities Administrator 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 Accounts and Master Servicer
Collection Account, the Securities Administrator shall send a final distribution
notice promptly to each Certificateholder and the NIMs Insurer or (ii) the
Securities Administrator determines that a Class of Certificates shall be
retired after a final distribution on such Class, the Securities Administrator
shall notify the Certificateholders as soon as practicable after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the Certificates at the
office of the Securities Administrator specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed no later than
the last calendar day of the month immediately preceding the month of such final
distribution (or with respect to an Auction, mailed no later than one Business
Day following completion of such Auction). Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the location of the office or agency at which such presentation
and surrender must be made, and (c) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Securities Administrator will give such notice the NIMs Insurer, the Swap
Counterparty, Cap Contract Counterparty and to each Rating Agency at the time
such notice is given to Certificateholders.
In the event such notice is given, each Servicer shall cause all funds in
the related Collection Account to be deposited in the Master Servicer Collection
Account on the Servicer Remittance Date in an amount equal to the final
distribution in respect of the Certificates and the Master Servicer shall remit
all funds in the Master Servicer Collection Account to the Securities
Administrator for deposit in the Certificate Account on the Servicer Remittance
Date in an amount equal to the final distribution in respect
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of the Certificates. Upon such final deposit with respect to the Trust Fund,
certification to the Trustee that such required amount has been deposited in the
Trust Fund and the receipt by the Trustee or the Custodian on its behalf of a
Request for Release therefor, the Trustee or the Custodian on its behalf shall
promptly release to the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Certificate Account in
the order and priority set forth in Section 4.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator 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 Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto. Upon
payment to the Class R Certificateholders of such funds and assets, neither the
Securities Administrator nor the Trustee shall have any further duties or
obligations with respect thereto.
SECTION 9.03. Additional Termination Requirements
(a) In the event Wilshire completes an Optional Termination as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Securities Administrator has
been supplied with an Opinion of Counsel, at the expense of the NIMs Insurer or
Servicer, as applicable, to the effect that the failure of the Issuing Entity to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of any of the REMICs provided
for herein as defined in Section 860F of the Code, or (ii) cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation period and
notify the Trustee and the Securities Administrator thereof, and the
Securities Administrator shall in turn specify the first day of such period
in a statement attached to the final tax returns of each of the REMICs
provided for herein pursuant to Treasury Regulation Section 1.860F-1. The
Depositor shall satisfy all the requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder, as evidenced
by an Opinion of Counsel obtained at the expense of Wilshire;
(ii) During such 90-day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Depositor as
agent of the Trustee shall sell all of the assets of the Trust Fund for
cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or
cause to be distributed or credited, to the Class R Certificateholders all
cash on hand (other than cash retained to meet outstanding claims), and the
Trust Fund shall terminate at that time, whereupon the neither the
Securities Administrator nor
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the Trustee shall have any further duties or obligations with respect to
sums distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) Upon the written request of the Depositor, the Securities
Administrator as agent for each REMIC hereby agrees to adopt and sign a plan of
complete liquidation as provided to it by the Depositor. The Securities
Administrator's obligation to adopt and sign such plan of complete liquidation
is subject to the Securities Administrator's receipt of the Opinion of Counsel
referred to in Section 9.03(a)(i). In addition, the Securities Administrator
shall take such other action in connection therewith as may be reasonably
requested by the Depositor.
(d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, each Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicers and Others), and the related Servicer may recover these Advances,
Servicing Advances and estimated Servicing Advances and other costs from the
related Collection Account (to the extent that such recovery of Servicing
Advances, estimated Servicing Advances and other costs constitutes
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
(e) Notwithstanding any other terms of this Agreement, unless the
related Servicer previously has notified the Master Servicer that it has entered
into a servicing agreement for the servicing after the termination date of the
Trust Fund assets, at least 20 days prior to any termination of the Trust Fund,
the Master Servicer or the Depositor shall notify the related Servicer in
writing to transfer the assets of the Trust Fund as of the termination date to
the person specified in the notice, or if such person is not then known, to
continue servicing the assets until the date that is 20 days after the
termination date and on the termination date, the Master Servicer or the
Depositor shall notify such Servicer of the person to whom the assets should be
transferred on that date. In the latter event the related Servicer shall be
entitled to recover its servicing fee and any advances made for the interim
servicing period from the collections on the assets which have been purchased
from the Trust and the new owner of the assets, and the agreements for the new
owner to obtain ownership of the assets of the Trust Fund shall so provide.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the NIMs Insurer and without the consent of any of the
Certificateholders to,
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which may
be inconsistent with the Prospectus Supplement or any other provision
herein,
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(iii) to add any other provisions with respect to matters or questions
arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement, provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Trustee to such effect, adversely
affect in any material respect the interests of any Holder; provided,
further, however, that such amendment will be deemed to not adversely
affect in any material respect the interest of any Holder if the Person
requesting such amendment obtains a letter from each Rating Agency stating
that such amendment will not result in a reduction or withdrawal of its
rating of any Class of the Certificates, it being understood and agreed
that any such letter in and of itself will not represent a determination as
to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. In addition, this
Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee
without the consent of any of the Certificateholders and without a
determination as set for in subsection (ii)(A) of the fourth from last
paragraph of this Section 10.01 to comply with the provisions of Regulation
AB.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Servicers, the
Securities Administrator and the Trustee may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of any of the REMICs provided for herein as REMICs under the Code or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund or any of the
REMICs provided for herein pursuant to the Code that would be a claim against
the Trust Fund at any time prior to the final redemption of the Certificates,
provided that the Trustee, the Securities Administrator and the NIMs Insurer
shall have been provided an Opinion of Counsel addressed to the Trustee, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee, the Securities Administrator or the
NIMs Insurer, to the effect that such action is necessary or appropriate to
maintain such qualification or to avoid or minimize the risk of the imposition
of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator, the Trustee and
the Holders of the Certificates affected thereby evidencing not less than 66
2/3% of the Voting Rights, with the consent of the NIMs Insurer, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding. A copy of such Opinion of Counsel shall be provided to the NIMs
Insurer.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any
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of the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Securities Administrator shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Securities Administrator may prescribe.
Nothing in this Agreement shall require the Trustee or the Securities
Administrator to enter into an amendment without receiving an Opinion of
Counsel, satisfactory to the Trustee or the Securities Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
No amendment to this Agreement shall be entered into by the parties hereto
that could have a materially adverse effect on the Swap Counterparty or the Cap
Contract Counterparty without first obtaining the consent of the Swap
Counterparty or the Cap Contract Counterparty, as applicable.
Notwithstanding anything to the contrary in this Section 10.01, the
Trustee, the Securities Administrator, the Master Servicer and the Servicers
shall reasonably cooperate with the Depositor and its counsel to enter into such
amendments or modifications to this Agreement as may be necessary to comply with
Regulation AB and any interpretation thereof by the Commission.
SECTION 10.02. Counterparts
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties
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It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to the NIMs Insurer, the Swap Counterparty and 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 Trustee, the Securities
Administrator, the Master Servicer or the Servicers and the appointment of
any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02 and 2.03 and 3.12;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
(b) The Securities Administrator shall promptly furnish or make
available to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
(ii) Each annual statement as to compliance described in Section 3.17;
and
(iii) Each annual independent public accountants' servicing report
described in Section 3.18.
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All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000xxx (ii) Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of Wilshire, Wilshire
Credit Corporation, 00000 X.X. Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000,
Attention: V.P. Client Services; (d) in the case of IndyMac, IndyMac Bank,
F.S.B., 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000-0000; (e) in the case
of the Master Servicer and Securities Administrator, LaSalle Bank National
Association, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
Attention: Global Securities and Trust Services--MLMI 2006-HE5; (f) in the case
of the Trustee, Citibank, N.A., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention Structured Finance Agency & Trust MLMI 2006-HE5; (g) in
the case of the Swap Counterparty: The Royal Bank of Scotland plc, 000
Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Attention: Legal Department - Derivatives
Documentation, with a copy to: Greenwich Capital Markets, Inc., 000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal Department - Derivatives
Documentation; and in the case of any of the foregoing persons, such other
addresses as may hereafter be furnished by any such persons to the other parties
to this Agreement. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid, to their respective addresses appearing in
the Certificate Register.
SECTION 10.06. Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by either
Servicer without the prior written consent of the Securities Administrator and
Depositor; provided, however, each Servicer is hereby authorized to enter into
an Advance Facility under which (l) the related Servicer sells, assigns or
pledges to an Advancing Person such Servicer's rights under this Agreement to be
reimbursed for any Advances or Servicing Advances and/or (2) an Advancing Person
agrees to fund some or all Advances or Servicing Advances required to be made by
such Servicer pursuant to this Agreement. No consent of the Trustee, the
Securities Administrator, the Master Servicer, Certificateholders or any other
party is required before the related Servicer may enter into an Advance
Facility. Notwithstanding the existence of any Advance Facility under which an
Advancing Person agrees to fund Advances and/or Servicing Advances on the
related Servicer's behalf, the related Servicer shall remain obligated pursuant
to this Agreement to make Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the related Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming the related Servicer had made the related
Advance(s) and/or Servicing Advance(s).
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The related Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that such
reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the related Servicer to
provide to the related Advancing Person or its designee loan by loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each Mortgage Loan. The related
Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility trustee for all Advances and Servicing Advances funded by the
related Servicer to the extent the related rights to be reimbursed therefor have
not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Securities Administrator and such Servicer, without the consent of any
Certificateholder notwithstanding anything to the contrary in this Agreement,
upon receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. Prior to entering into an Advance Facility, the related
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to such
Servicer on a non recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee, the Securities Administrator and the Trust
Fund are not otherwise obligated or liable to repay any Advances financed by the
lender; (b) such Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
and (c) the Trustee or the Securities Administrator shall not have any
responsibility to track or monitor the administration of the financing
arrangement between such Servicer and the lender.
SECTION 10.08. Limitation on Rights of Certificateholders
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as
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to constitute the Certificateholders from time to time as partners or members of
an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee (individually and as trustee) such
indemnity satisfactory to it as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates and/or the NIMs Insurer, or to obtain or seek to obtain
priority over or preference to any other such Holder and/or the NIMs Insurer or
to enforce any right under this Agreement, except in the manner herein provided
and for the common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.08, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights
The Master Servicer and each Servicer each agree that, on reasonable prior
notice, it will permit any representative of the Depositor or the Trustee or,
with respect to each Servicer, the Master Servicer, during the Master Servicer's
or Servicers' normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer or Servicers relating
to the Mortgage Loans to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees, agents, counsel and
independent public accountants (and by this provision the Master Servicer and
each Servicer each hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection (except in
the case of the Trustee in which case such expenses shall be borne by the
requesting Certificateholder(s)); all other such expenses shall be borne by the
Servicers or Master Servicer, as the case may be..
SECTION 10.10. Certificates Nonassessable and Fully Paid
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Issuing Entity, that the interests in
the Issuing Entity represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Securities Administrator pursuant to this Agreement, are and
shall be deemed fully paid.
SECTION 10.11. Compliance with Regulation AB
Each of the parties hereto acknowledges and agrees that the purpose of
Sections 3.17, 3.18 and 3.20 of this Agreement is to facilitate compliance by
the Depositor with the provisions of Regulation AB,
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as such may be amended or clarified from time to time. Therefore, each of the
parties agrees that (a) the obligations of the parties hereunder shall be
interpreted in such a manner as to accomplish compliance with Regulation AB, (b)
the parties' obligations hereunder will be supplemented and modified as
necessary to be consistent with any such amendments, interpretive advice or
guidance, or convention or consensus among active participants in the
asset-backed securities markets in respect of the requirements of Regulation AB
and (c) the parties shall comply with reasonable requests made by the Depositor
for delivery of additional or different information as the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB, provided that such information is available to such party without
unreasonable effort or expense and within such timeframe as may be reasonably
requested..
SECTION 10.12. Third Party Rights
Each of the NIMs Insurer and the Swap Counterparty shall be deemed a
third-party beneficiary of this Agreement to the same extent as if it were a
party hereto, and shall have the right to enforce the provisions of this
Agreement.
The Cap Contract Counterparty shall be deemed a third party beneficiary of
this Agreement regarding provisions related to payments owed to the Cap Contract
Counterparty or to the Supplemental Interest Trust on behalf of the Cap Contract
Counterparty.
SECTION 10.13. Additional Rights of the NIMs Insurer
Each party to this Agreement, any agent thereof and any successor thereto
shall furnish to the NIMs Insurer a copy of any notice, direction, demand,
opinion, schedule, list, certificate, report, statement, filing, information,
data or other communication provided by it or on its behalf to any other Person
pursuant to this Agreement at the same time, in the same form and in the same
manner as such communication is so provided and shall address or cause such
communication to be addressed to the NIMs Insurer in addition to any other
addressee thereof. The Servicers shall cause the NIMs Insurer to be an addressee
of any report furnished pursuant to this Agreement. With respect to the
Securities Administrator, such obligation shall be satisfied with the provision
of access to the NIMs Insurer to the Securities Administrator's website.
Wherever in this Agreement there shall be a requirement that there be no
downgrade, reduction, withdrawal or qualification of or other effect on the
rating of any Class of Certificates by any Rating Agency as of any date, there
also shall be deemed to be a requirement that there be no such effect on any
class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy insuring
the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this Agreement
there shall be a requirement that any Person or any communication, object or
other matter be acceptable or satisfactory to or otherwise receive the consent
or other approval of any other Person (whether as a condition to the eligibility
of such Person to act in any capacity, as a condition to any circumstance or
state of affairs related to such matter, or otherwise), there also shall be
deemed to be a requirement that such Person or matter be approved in writing by
the NIMs Insurer, which approval shall not be unreasonably withheld or delayed.
ARTICLE XI
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
SECTION 11.01. Master Servicer.
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The Master Servicer shall supervise, monitor and oversee the obligation of
the Servicers to service and administer the Mortgage Loans in accordance with
the terms of this Agreement and shall have full power and authority to do any
and all things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations hereunder,
the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult
with the Servicers as necessary from time to time to carry out the Master
Servicer's obligations hereunder, shall receive, review and evaluate certain
reports, information and other data provided to the Master Servicer by the
Servicers pursuant to this Agreement and shall enforce the Servicers'
obligations to perform and observe the covenants, obligations and conditions to
be performed or observed by the Servicers under this Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to each Servicer's and
Master Servicer's records, and based on such reconciled and corrected
information, prepare any other information and statements required to be
provided by the Master Servicer hereunder. Except during any time where the
Master Servicer is acting as a servicer hereunder, neither the Master Servicer
nor the Securities Administrator shall have any responsibility for reviewing or
reconciling the Collection Accounts or for any expenses or other consequences
resulting from any failure of such Collection Accounts to be so reconciled. The
Master Servicer shall be entitled to conclusively rely on the Mortgage Loan data
and other related information provided by the Servicers and the Depositor and
shall have no liability for any errors in such Mortgage Loan data or other
information.
The Trustee shall furnish the Servicers and/or the Master Servicer with any
limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicers and/or the Master Servicer to
execute in the name of the Trustee, as applicable, all documents reasonably
required to perform the servicing functions described in Article III or this
Article XI. The Trustee shall have no responsibility for any action of the
Master Servicer or the Servicers pursuant to any such limited power of attorney
and shall be indemnified by the Master Servicer or the related Servicer, as
applicable, for any cost, liability or expense incurred by the Trustee in
connection with such Person's misuse of any such power of attorney.
The Master Servicer and the Securities Administrator shall provide access
to the records and documentation in possession of the Master Servicer or the
Securities Administrator regarding the related Mortgage Loans and REO Property
and the master servicing and servicing thereof to the Certificateholders, the
FDIC, and the supervisory agents and examiners of the FDIC, such access being
afforded only upon reasonable prior written request and during normal business
hours at the office of the Master Servicer or the Securities Administrator;
provided, however, that, unless otherwise required by law, neither of the Master
Servicer nor the Securities Administrator shall be required to provide access to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Master Servicer and the Securities
Administrator shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at
a charge that covers the Master Servicer's or the Securities Administrator's
actual costs.
The Trustee shall execute and deliver to the related Servicer or the Master
Servicer upon written request any court pleadings, requests for trustee's sale
or other documents necessary or desirable to (i) the foreclosure or trustee's
sale with respect to a Mortgaged Property; (ii) any legal action brought to
obtain judgment against any Mortgagor on the Mortgage Note or any other Mortgage
Loan Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Mortgage Loan Document or otherwise available at law or equity.
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SECTION 11.02. Monitoring of Servicers.
(a) The Master Servicer shall be responsible for monitoring the
compliance by each Servicer with its duties under this Agreement in accordance
with the provisions hereof. In the review of the Servicers' activities, the
Master Servicer may rely upon an Officer's Certificate of the related Servicer
with regard to such Servicer's compliance with the terms of this Agreement. In
the event that the Master Servicer, in its judgment, determines that the related
Servicer should be terminated in accordance with the terms hereof, or that a
notice should be sent pursuant to the terms hereof with respect to the
occurrence of an event that, unless cured, would constitute a Servicer Event of
Default, the Master Servicer shall notify such Servicer, the Sponsor and the
Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicers under this
Agreement and shall, in the event that a Servicer fails to perform its
obligations in accordance with this Agreement, subject to the preceding
paragraph, Section 3.04 and Article VII, terminate the rights and obligations of
such Servicer hereunder in accordance with the provisions of Article VII. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense subject to its right of reimbursement pursuant to this Agreement,
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) Upon termination of the rights of a Servicer upon such Servicer's
failure to perform its obligations in accordance with this Agreement, the Master
Servicer shall be entitled to be reimbursed by such Servicer (or from amounts on
deposit in the related Collection Account if such Servicer is unable to fulfill
its obligations hereunder) for all reasonable out-of-pocket or third party costs
associated with the transfer of servicing from a predecessor Servicer (or if the
predecessor Servicer is the Master Servicer, from such Servicer immediately
preceding the Master Servicer), including, without limitation, any reasonable
out-of-pocket or third party costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Master Servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the Mortgage Loans properly and effectively, upon
presentation of reasonable documentation of such costs and expenses.
(d) The Master Servicer shall require the Servicers to comply with the
remittance requirements and other obligations set forth in this Agreement.
(e) If the Master Servicer acts as successor to a Servicer, it will
not assume liability for the representations and warranties of the terminated
Servicer.
SECTION 11.03. Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder or it may self insure
so long as LaSalle Bank National Association maintains with any Rating Agency
the equivalent of a long term unsecured debt
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rating of "A". The errors and omissions insurance policy and the fidelity bond
shall be in such form and amount generally acceptable for entities serving as
master servicers or trustees.
SECTION 11.04. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Section 8.12, to do any and all things that it may deem necessary or desirable
in connection with the master servicing and administration of the Mortgage
Loans, including but not limited to the power and authority (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and
(iv) to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan, in each case, in accordance with
the provisions of this Agreement; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 11.02, shall
not permit the Servicers to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, would cause any
REMIC formed hereby to fail to qualify as a REMIC or result in the imposition of
a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (at the expense of the Master
Servicer) to the effect that the contemplated action will not cause any REMIC
formed hereby to fail to qualify as a REMIC or result in the imposition of a
tax. In the performance of its duties hereunder, the Master Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
SECTION 11.05. Documents, Records and Funds in Possession of Master
Servicer to Be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee or the Custodian
on its behalf such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee. Any funds received by the Master Servicer in respect
of any Mortgage Loan or which otherwise are collected by the Master Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall
be deposited in the Master Servicer Collection Account. The Master Servicer
shall, and shall enforce the obligation of each
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Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Securities Administrator, its agents and accountants at
any time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the OTS, the FDIC and the supervisory agents and examiners of such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of the
Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during
normal business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be deposited in the Certificate Account.
SECTION 11.06. Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee or the Custodian on its behalf shall retain possession and
custody of the originals (to the extent available) of any primary mortgage
insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
Servicers have otherwise fulfilled their respective obligations under this
Agreement, the Trustee or the Custodian on its behalf shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee or the Custodian on its behalf,
upon the execution or receipt thereof the originals of any primary mortgage
insurance policies, any certificates of renewal, and such other documents or
instruments that constitute the Mortgage File that come into the possession of
the Master Servicer from time to time.
SECTION 11.07. Compensation for the Master Servicer and the Securities
Administrator.
As compensation for the activities of the Master Servicer and the
Securities Administrator hereunder, the Master Servicer and the Securities
Administrator shall be entitled to a portion of the income from investment of or
earnings on the funds held from time to time in the Master Servicer Collection
Account and Certificate Account respectively, as provided in Section 3.05(g).
Each of the Master Servicer and the Securities Administrator shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.
SECTION 11.08. Annual Statement as to Compliance.
Pursuant to this Agreement, the Master Servicer shall deliver to the
Depositor and the Securities Administrator on or before March 20 of each year
beginning in 2006, (or such other date that the Depositor gives the Master
Servicer at least 30 days prior notice of) in order to remain in compliance with
the Section 302 Requirements, an Officer's Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement or a
similar agreement has been made under such officer's supervision, and (ii) to
the best of such officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status
thereof.
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The Securities Administrator shall forward a copy of each such statement
received by it to each Rating Agency. Copies of such statement shall be provided
by the Securities Administrator to any Certificateholder upon written request at
the Certificateholder's expense, provided such statement has been delivered by
the Master Servicer to the Securities Administrator.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicers have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITIBANK, N.A.,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as Master Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WILSHIRE CREDIT CORPORATION,
as a Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
INDYMAC BANK F.S.B.,
as a Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
FORMS OF CERTIFICATES
FORM OF CLASS A CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS
CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE SERVICERS OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT, AND
IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN
OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE
TRANSFEREE'S ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND
EXEMPT UNDER ANY OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE
CODE, PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XX XXXX
00-00, XXXX 00-00, XXXX 96-23, EACH AS AMENDED.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
CLASS A-[__] CERTIFICATE
Number: 06-HE5-A-[__] Original Denomination:
$[_____]
A-1
Cut-off Date: September 1, 2006 Last Scheduled
Distribution Date: August 25, 2037
First Distribution Date: Aggregate Initial Certificate
October 25, 2006 Balance of all Class A-[__]
Certificates: $[________]
Pass-Through Rate: Variable(1) CUSIP: [________]
----------
(1) Subject to a cap as described in the Agreement.
A-2
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
evidencing an ownership interest in distributions allocable to the Class A-[__]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Securities
Administrator for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class A-[__] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation and IndyMac Bank, F.S.B. (the
"Servicers"), and are secured by first-lien or second-lien mortgages on the
Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of September 1, 2006, among the
Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class A-[__] (the "Class A-[__] Certificates")
and is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the
A-3
"Distribution Date"), commencing in October 2006. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Securities Administrator in writing in accordance with the
Agreement, by wire transfer in immediately available funds to the account of
such certificateholder at a bank or other depository institution having
appropriate wire transfer facilities; provided, however, that the final
distribution in retirement of the certificates will be made only upon
presentation and surrender of this Certificate at the office of the Securities
Administrator or such other address designated in writing by the Securities
Administrator. On each Distribution Date, a Holder of this Certificate will
receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 28, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
A-5
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Securities Administrator.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
A-6
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage Interests of each Class of Certificates
affected thereby, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) 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 66 2/3% or more of the Voting Rights of such Class or (iii) change
the percentage specified in clause (ii) of the third paragraph of Section 10.01
of the Agreement, without the consent of the Holders of all Certificates of such
Class then outstanding.
The Class A-[__] Certificates are issuable only in registerable form, in
minimum denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the Clearing Agency, which shall maintain such Certificates through
its book-entry facilities.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Date:
-------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-8
FORM OF CLASS M CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS
CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT, AND
IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN
OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE
TRANSFEREE'S ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND
EXEMPT UNDER ANY OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE
CODE, PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX
91-38, PTCE 95-60, OR PTCE 96-23, EACH AS AMENDED.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
CLASS M-[__] CERTIFICATE
Number: 06-HE5-M-[__] Original Denomination:
$[_____]
Cut-off Date: September 1, 2006 Last Scheduled
Distribution Date: August 25, 2037
A-9
First Distribution Date: Aggregate Initial Certificate
October 25, 2006 Balance of all Class M-[__]
Certificates: $[________]
Pass-Through Rate: Variable(2) CUSIP: [________]
----------
(2) Subject to a cap as described in the Agreement.
A-10
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
evidencing an ownership interest in distributions allocable to the Class M-[__]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Securities
Administrator for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class M-[__] Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation and IndyMac Bank, F.S.B. (the
"Servicers"), and are secured by first-lien or second-lien mortgages on the
Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of September 1, 2006, among the
Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class M-[__] (the "Class M-[__] Certificates")
and is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the
A-11
"Distribution Date"), commencing in October 2006. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Securities Administrator in writing in accordance with the
Agreement, by wire transfer in immediately available funds to the account of
such certificateholder at a bank or other depository institution having
appropriate wire transfer facilities; provided, however, that the final
distribution in retirement of the certificates will be made only upon
presentation and surrender of this Certificate at the office of the Securities
Administrator or such other address designated in writing by the Securities
Administrator. On each Distribution Date, a Holder of this Certificate will
receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-12
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 28, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-13
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Securities Administrator.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
A-14
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage Interests of each Class of Certificates
affected thereby, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) 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 66 2/3% or more of the Voting Rights of such Class or (iii) change
the percentage specified in clause (ii) of the third paragraph of Section 10.01
of the Agreement, without the consent of the Holders of all Certificates of such
Class then outstanding.
The Class M-[__] Certificates are issuable only in registerable form, in
minimum denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the Clearing Agency, which shall maintain such Certificates through
its book-entry facilities.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-15
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-16
FORM OF CLASS B CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS
CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT, AND
IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN
OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE
TRANSFEREE'S ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND
EXEMPT UNDER ANY OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE
CODE, PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX
91-38, PTCE 95-60, OR PTCE 96-23, EACH AS AMENDED.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
CLASS B-[__] CERTIFICATE
Number: 06-HE5-B-[__] Original Denomination:
$[______]
Cut-off Date: September 1, 2006 Last Scheduled
Distribution Date: August 25, 2037
A-17
First Distribution Date: Aggregate Initial Certificate
October 25, 2006 Balance of all Class B-[__]
Certificates: $[________]
Pass-Through Rate: Variable(3) CUSIP: [________]
----------
(3) Subject to a cap as described in the Agreement.
A-18
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
evidencing an ownership interest in distributions allocable to the Class B-[__]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Securities
Administrator for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class A Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation and IndyMac Bank, F.S.B. (the
"Servicers"), and are secured by first-lien or second-lien mortgages on the
Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of September 1, 2006, among the
Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class B-[__] (the "Class B-[__] Certificates")
and is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing in October 2006. Such distributions will be made to the
A-19
Person in whose name this Certificate is registered at the close of business on
the last Business Day of the month preceding the month in which such payment is
made.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any Certificateholder that has so
notified the Securities Administrator in writing in accordance with the
Agreement, by wire transfer in immediately available funds to the account of
such Certificateholder at a bank or other depository institution having
appropriate wire transfer facilities; provided, however, that the final
distribution in retirement of the certificates will be made only upon
presentation and surrender of this Certificate at the office of the Securities
Administrator or such other address designated in writing by the Securities
Administrator. On each Distribution Date, a Holder of this Certificate will
receive such Holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-20
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 25, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
A-21
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
SERIES 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Securities Administrator.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
A-22
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage Interests of each Class of Certificates
affected thereby for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) 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 66 2/3% or more of the Voting Rights of such Class or (iii) change
the percentage specified in clause (ii) of the third paragraph of Section 10.01
of the Agreement, without the consent of the Holders of all Certificates of such
Class then outstanding.
The Class B-[__] Certificates are issuable only in registerable form, in
minimum denominations of $25,000 in initial Certificate Principal Amount and in
integral multiples of $1 in excess thereof, registered in the name of the
nominee of the Clearing Agency, which shall maintain such Certificates through
its book-entry facilities.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-23
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that
the assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-24
FORM OF CLASS C CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A GRANTOR TRUST THAT HOLDS A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND IS TREATED AS HAVING ENTERED INTO CERTAIN NOTIONAL PRINCIPAL
CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS
CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH (A) A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY
OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS
OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C)
SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE SECURITIES
ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED
A-25
TRANSACTION UNDER ERISA OR THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL NOT
SUBJECT THE NIMS INSURER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE, THE MASTER
SERVICER, THE SERVICERS OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE NIMS INSURER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE, THE MASTER SERVICER, THE SERVICERS OR THE DEPOSITOR.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
CLASS C CERTIFICATE
Number: 06-HE5-C-[___] Percentage Interest: 100%
Cut-off Date: September 1, 2006
First Distribution Date: October 25, 2006
Pass-Through Rate: Variable CUSIP: [________]
A-26
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
SERIES 2006-HE5
evidencing an ownership interest in distributions allocable to the Class C
Certificates with respect a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
nominee for Xxxxxxx Xxxxx Funding Corp, is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class C Certificates) in certain distributions with
respect a pool of conventional, sub-prime mortgage loans (the "Mortgage Loans")
formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter called
the "Depositor"), and certain other property held in trust for the benefit of
Certificateholders (collectively, the "Trust Fund"). The Mortgage Loans are
serviced by Wilshire Credit Corporation and IndyMac Bank, F.S.B. (the
"Servicers"), and are secured by first-lien or second-lien mortgages on the
Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of September 1, 2006, among the
Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class C (the "Class C Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing in October 2006. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Securities Administrator in writing in accordance with the
Agreement, by wire transfer in immediately available funds to the account of
such certificateholder at a bank or other depository institution having
appropriate wire transfer
A-27
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Securities Administrator or such other address
designated in writing by the Securities Administrator. On each Distribution
Date, a holder of this Certificate will receive such holder's Percentage
Interest of the amounts required to be distributed with respect to the
applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-28
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 28, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
A-29
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to a pool of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Securities Administrator.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
A-30
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage Interests of each Class of Certificates
affected thereby, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) 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 66 2/3% or more of the Voting Rights of such Class or (iii) change
the percentage specified in clause (ii) of the third paragraph of Section 10.01
of the Agreement, without the consent of the Holders of all Certificates of such
Class then outstanding.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-31
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that
the assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-32
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR,
THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR
BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS P CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH (A) A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY
OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS
OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C)
SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE SECURITIES
ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE NIMS INSURER, THE TRUSTEE, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR THE DEPOSITOR TO
ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING
AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE
NIMS
A-33
INSURER, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICERS OR THE DEPOSITOR.
CLASS P CERTIFICATE
Number: 06-HE5-P-[___] Percentage Interest: 100%
Cut-off Date: September 1, 2006
First Distribution Date: October 25, 2006 CUSIP: [________]
X-00
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
SERIES 2006-HE5
evidencing an ownership interest in distributions allocable to the Class P
Certificates with respect a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
nominee for Xxxxxxx Xxxxx Funding Corp, is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class P Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation and IndyMac Bank, F.S.B. (the
"Servicers"), and are secured by first-lien or second-lien mortgages on the
Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of September 1, 2006, among the
Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class P (the "Class P Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates, the Class C Certificates and the Class R
Certificate are collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing in October 2006. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, if
such last day is not a Business Day, the Business Day immediately preceding such
last day.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Securities Administrator in writing in accordance with
A-35
the Agreement, by wire transfer in immediately available funds to the account of
such certificateholder at a bank or other depository institution having
appropriate wire transfer facilities; provided, however, that the final
distribution in retirement of the certificates will be made only upon
presentation and surrender of this Certificate at the office of the Securities
Administrator or such other address designated in writing by the Securities
Administrator. On each Distribution Date, a holder of this Certificate will
receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-36
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 25, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
A-37
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to pools of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage
A-38
Interests of each Class of Certificates affected thereby, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Holders of Certificates of such Class; provided, however, that no such amendment
may (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
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 66 2/3% or
more of the Voting Rights of such Class or (iii) change the percentage specified
in clause (ii) of the third paragraph of Section 10.01 of the Agreement, without
the consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-39
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
__________________________________________________________, Attorney to transfer
the within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that
the assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-40
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"RESIDUAL INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS",
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND (II) AN INTEREST IN
NOTIONAL PRINCIPAL CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICERS REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS
CERTIFICATE, THE REMIC RESIDUAL INTERESTS REPRESENTED HEREBY OR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY DEPOSITOR, THE TRUSTEE, THE MASTER
SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, AND IS
NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN.
CLASS R CERTIFICATE
Number: 06-HE5-R Principal Balance: $[________]
Cut-off Date: September 1, 2006 Pass-Through Rate: Variable(4)
First Distribution Date: October 25, 2006 CUSIP: [________]
----------
(4) Subject to a cap as described in the Agreement.
A-41
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
evidencing an ownership interest in distributions allocable to the Class R
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as
nominee for Xxxxxxx Xxxxx Funding Corporation, is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Initial Certificate Balance of all Class R Certificates) in certain
distributions with respect to a pool of conventional, sub-prime mortgage loans
(the "Mortgage Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc.
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Wilshire Credit Corporation and IndyMac Bank,
F.S.B. (the "Servicers"), and are secured by first-lien or second-lien mortgages
on the Mortgaged Properties. The Trust Fund was created pursuant to a pooling
and servicing agreement (the "Agreement"), dated as of September 1, 2006, among
the Depositor, the Servicers, LaSalle Bank National Association ("LaSalle"), as
Master Servicer (the "Master Servicer"), LaSalle, as Securities Administrator
(the "Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, Class R (the "Class R Certificate") and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates and the Class C Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Securities Administrator will
distribute from funds in the Certificate Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing in October 2006. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Securities Administrator in writing in accordance with the
Agreement, by wire transfer in immediately available funds to the account of
such
A-42
certificateholder at a bank or other depository institution having appropriate
wire transfer facilities; provided, however, that the final distribution in
retirement of the certificates will be made only upon presentation and surrender
of this Certificate at the office of the Securities Administrator or such other
address designated in writing by the Securities Administrator. On each
Distribution Date, a holder of this Certificate will receive such holder's
Percentage Interest of the amounts required to be distributed with respect to
the applicable Class of Certificates.
The Securities Administrator will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator will provide for the registration of
Certificates and of transfers and exchanges of Certificates. Upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator, or, if an Authenticating Agent has been appointed
under the Agreement, the Authenticating Agent, maintained for such purpose, the
Securities Administrator, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Securities
Administrator, of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-43
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: September 25, 2006 LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
A-44
REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-HE5
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to pools of conventional, sub-prime Mortgage Loans formed and sold
by the Depositor and certain other property conveyed by the Depositor to the
Trustee.
Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Securities Administrator.
The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Securities Administrator is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Securities Administrator.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor and
the Securities Administrator may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor nor the Securities Administrator will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the Master
Servicer, the Servicers, the Securities Administrator and the Trustee, without
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of each REMIC included in the
Trust Fund as a REMIC, or to make any other provisions with respect to matters
or questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, provided that such action does not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder.
A-45
The Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing in the aggregate not
less than 66 2/3% of the Percentage Interests of each Class of Certificates
affected thereby, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) 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 66 2/3% or more of the Voting Rights of such Class or (iii) change
the percentage specified in clause (ii) of the third paragraph of Section 10.01
of the Agreement, without the consent of the Holders of all Certificates of such
Class then outstanding.
For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Master Servicer,
the Servicers, the Securities Administrator and the Trustee under the Agreement
shall terminate upon the earlier of (a) the exercise by the Securities
Administrator of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created under the Agreement continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
A-46
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
------------------------------
-------------------------------------
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
X-00
XXXXXXX X-0
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
On file at the offices of:
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
X-0-0
XXXXXXX X-0
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-2-1
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-3-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF INITIAL CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilshire Credit Corporation
00000 X.X. Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
IndyMac Bank, F.S.B.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust MLMI 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of September 1, 2006 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, LaSalle Bank National Association, as master servicer and securities
administrator, Citibank, N.A. as trustee and Wilshire Credit Corporation, as a
servicer (the "Pooling and Servicing Agreement"), the undersigned, as custodian,
hereby certifies that [, except as set forth in Schedule A hereto,] as to each
Mortgage Loan listed in the Mortgage Loan Schedule attached hereto (other than
any Mortgage Loan paid in full or listed on the attachment hereto) it has
reviewed the Mortgage File and the Mortgage Loan Schedule and has determined
that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee or the Custodian on its behalf pursuant to Section 2.01 (A)-(B),
(C) (if applicable), (D) and (E) and the documents if actually received by
it under Section 2.01(F) of the Pooling and Servicing Agreement are in its
possession;
D-1
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing
Date, it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan.
The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the street address (excluding zip code), the
mortgage interest rate at origination, the gross margin (if applicable), the
lifetime rate cap (if applicable), the periodic rate cap (if applicable), the
original principal balance, the first payment due date and the original maturity
date in each Mortgage File conform to the respective Mortgage Loan number and
name listed on the Mortgage Loan Schedule and (ii) the existence in each
Mortgage File of each of the documents listed in subparagraphs (i)(A) through
(E), as applicable, inclusive, of Section 2.01 in the Agreement. The custodian
makes no representations or warranties as to the validity, legality,
recordability, sufficiency, enforceability, due authorization or genuineness of
any of the documents contained in each Mortgage Loan or the collectability,
insurability, effectiveness, priority, perfection or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.
LASALLE BANK NATIONAL ASSOCIATION, as
Custodian on behalf of Citibank, N.A. as
Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
Ladies and Gentlemen:
We propose to purchase Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-HE5, Class R, described in the
Prospectus Supplement, dated September 26, 2006, and the Prospectus, dated March
31, 2006.
1. We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class R Certificate, we may incur tax liabilities in excess of any
cash flows generated by the Class R Certificate, and (d) we intend to pay any
taxes associated with holding the Class R Certificate as they become due and (e)
we will not cause income from the Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
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3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(5)
___________ The Class R Certificate will be registered in our name.
___________ The Class R Certificate will be held in the name of our
nominee, _________________, which is not a disqualified organization.
4. We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a
plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the Class
R Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Securities Administrator
with a duly completed and effective Internal Revenue Service Form W-8ECI or
successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class R Certificate, we will transfer such interest in the
Class R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person or will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and will furnish us and the Securities Administrator with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Securities Administrator a letter in the form of this letter (including
the affidavit appended hereto) and, we will provide the Securities Administrator
a written statement substantially in the form of Exhibit E-2 to the Pooling and
Servicing Agreement.
7. We hereby designate _______________________ as our fiduciary to act as
the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement.
----------
(5) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-2
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of __________ __, 200__
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section
860E(e)(4) of the Internal Revenue Code
of 1986, as amended, and (ii) certain
provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the "Transferee"),
2. the Transferee's Employer Identification number is __________,
3. the Transferee is not a "disqualified organization" (as defined below),
has no plan or intention of becoming a disqualified organization, and is not
acquiring any of its interest in the Xxxxxxx Xxxxx Mortgage Investors Trust,
Mortgage Loan Asset-Backed Certificates, Series 2006-HE5, Class R Certificate on
behalf of a disqualified organization or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc.("MLMI") has consented to
the transfer to the Transferee by executing the form of Consent affixed as
Appendix B to the Transferee's Letter to which this Certificate is affixed as
Appendix A, the Transferee is a "U.S. person" (as defined below),
5. that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
6. the Transferee has historically paid its debts as they became due,
7. the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
8. the Transferee understands that, as beneficial owner of the Class R
Certificate, it may incur tax liabilities in excess of any cash flows generated
by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with holding the
Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by MLMI (upon advice of counsel) to
constitute a reasonable arrangement to ensure that the Class R Certificate will
not be owned directly or indirectly by a disqualified organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class R Certificate to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Transferee, and as to each of the residual
interests represented by the Class R Certificate, the present value of the
anticipated tax liabilities associated with holding such residual interest does
not exceed the sum of:
A. the present value of any consideration given to the Transferee to
acquire such residual interest;
E-1-4
B. the present value of the expected future distributions on such residual
interest; and
C. the present value of the anticipated tax savings associated with holding
such residual interest as the related REMIC generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay tax at a
rate equal to the highest rate of tax specified in Section 11(b)(1) of the Code,
but the tax rate specified in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b)(1) of the Code if the
Transferee has been subject to the alternative minimum tax under Section 55 of
the Code in the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate, and (ii) present
values are computed using a discount rate equal to the Federal short-term rate
prescribed by Section 1274(d) of the Code for the month of the transfer and the
compounding period used by the Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to another
eligible corporation in a transaction that satisfies Treasury
regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary
E-1-5
supervision over the administration of such trust, and one or more such U.S.
Persons have the authority to control all substantial decisions of such trust,
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).
By:
---------------------------------
Address of Investor for receipt of distribution:
--------------------------
Address of Investor for receipt of tax information:
-----------------------
(Corporate Seal)
Attest:
------------------------------
, Secretary
------------------------------
E-1-6
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this
day of ________ , 200_.
Notary Public
County of ___________________________
State of ____________________________
My commission expires the ________ day of ______________
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
Dated:
-----------
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
Name:
----------------------------------
Title:
---------------------------------
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of September 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, LaSalle Bank
National Association, as master servicer and securities administrator, Citibank
N.A., as trustee, Wilshire Credit Corporation, as a servicer and IndyMac Bank,
F.S.B. as a servicer.
Very truly yours,
Name of Transferor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2006-HE5, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of September 1,
2006 (the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), LaSalle Bank National
Association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), Citibank, N.A., as trustee (the
"Trustee"), Wilshire Credit Corporation, as a servicer ("Wilshire") and IndyMac
Bank, N.A., as a servicer ("IndyMac" and together with Wilshire, the
"Servicers"). [The Purchaser intends to register the Transferred Certificate in
the name of ____________________, as nominee for _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Securities Administrator that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Securities Administrator is required, and neither of them
intends, to so register or qualify the Certificates, (c) the Certificates cannot
be resold unless (i) they are registered and qualified under the Securities Act
and the applicable state securities laws or (ii) an exemption from registration
and qualification is available and (d) the Pooling and Servicing Agreement
contains restrictions regarding the transfer of the Certificates.
2. All Certificates other than ERISA Restricted Certificates and Class R
Certificates will be a legend to the following effect:
UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS
CERTIFICATE SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF
G-1
A DEFINITIVE CERTIFICATE, SHALL REPRESENT) TO THE SECURITIES ADMINISTRATOR
THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR
WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S
ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND EXEMPT UNDER
ANY OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE CODE,
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX
91-38, PTCE 95-60, OR PTCE 96-23, EACH AS AMENDED.
3. The Certificates (other than the Class R Certificate) will bear a legend
to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT. IF THE CERTIFICATE IS A DEFINITIVE CERTIFICATE, NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO
THE SECURITIES ADMINISTRATOR (A) AN INVESTMENT LETTER FROM THE PROSPECTIVE
INVESTOR; AND (B) REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE
OFFERING AND SALE OF THE CERTIFICATES.
4. The ERISA Restricted Certificates will bear a legend to the following
effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR HAS RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH
PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY
THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY
GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE
ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY
G-2
IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY
TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE SECURITIES
ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION
AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT
CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF
ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL
NOT SUBJECT THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE,
THE SERVICERS OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE, THE SERVICERS OR THE DEPOSITOR. IF
THE CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED
TO HAVE MADE THE REPRESENTATION IN (A) OR (B) ABOVE.
5. The Class R Certificate will bear a legend to the following effect:
THIS CLASS R CERTIFICATE MAY NOT BE TRANSFERRED, EXCEPT IN ACCORDANCE WITH
SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT AND THE HOLDER OF THIS
CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH CERTIFICATE ONLY IN ACCORDANCE WITH SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE
MADE UNLESS THE SECURITIES ADMINISTRATOR SHALL HAVE RECEIVED, IN FORM AND
SUBSTANCE SATISFACTORY TO THE SECURITIES ADMINISTRATOR (A) A TRANSFER
AFFIDAVIT FROM THE PROSPECTIVE INVESTOR; AND (B) AN AFFIDAVIT FROM THE
TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATE.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL,
FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR
INDIRECTLY ACQUIRING THIS CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS
OF ANY SUCH PLAN.
6. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY] * and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
----------
* No required of a broker/dealer purchaser.
G-3
7. The Purchaser (a) is a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters, and in
particular in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment in the
Certificates, (b) is able to bear the economic risks of such an investment and
(c) is an "accredited investor" within the meaning of Rule 501(a) promulgated
pursuant to the Securities Act.
8. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
9. Either (i) the Purchaser of a Certificate that is neither an ERISA
Restricted Certificate nor a Class R Certificate is not, and is not acting for,
on behalf of or with any assets of, an employee benefit plan or other
arrangement subject to Title I of ERISA or plan subject to Section 4975 of the
Code, or (ii) until the termination of the Swap Agreement, such Purchaser's
acquisition and holding of such Certificates are eligible for exemptive relief
under any of Section 408(b)(17) of ERISA or Section 4975(d)(20) of the Code,
Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX 91-38,
PTCE 95-60 or PTCE 96-23.
10. The Purchaser of an ERISA Restricted Certificate (A) is not an employee
benefit plan subject to Title I of ERISA, a plan subject to Section 4975 of the
Code, a plan subject to any state, local, federal, non-U.S. or other law
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") and is not directly or indirectly acquiring such Certificates by, on
behalf of, or with any assets of any such plan, or (B) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, is an insurance company
that is acquiring the Certificate with assets of an "insurance company general
account," as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60, and the acquisition and holding of the Certificate are covered
and exempt under Sections I and III of PTCE 95-60 or (C) solely in the event the
Certificate is a Definitive Certificate, herewith delivers an Opinion of Counsel
satisfactory to the Securities Administrator, and upon which the Securities
Administrator shall be entitled to rely, to the effect that the acquisition and
holding of the Certificate will not constitute or result in a nonexempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code, or a
violation of Similar Law, and will not subject the Trustee, the Master Servicer,
the Securities Administrator, the Servicers or the Depositor to any obligation
in addition to those expressly undertaken in the Pooling and Servicing
Agreement, which Opinion of Counsel shall not be an expense of the Trustee, the
Master Servicer, the Securities Administrator, the Servicers or the Depositor.
11. The Purchaser of a Class R Certificate is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local, federal, non-U.S.
G-4
or other law substantively similar to the foregoing provisions of ERISA or the
Code ("Similar Law"), or a Person directly or indirectly acquiring such
Certificate by, on behalf of, or with any assets of any such plan.
12. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
G-5
13. The Purchaser agrees to indemnify the Trustee, the Master Servicer, the
Securities Administrator, the Servicers and the Depositor against any liability
that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-6
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors
Trust, Series 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2006-HE5, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of September 1,
2006 (the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), LaSalle Bank National
Association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), Citibank, N.A., as trustee (the
"Trustee"), Wilshire Credit Corporation, as a servicer ("Wilshire") and IndyMac
Bank, N.A., as a servicer ("IndyMac" and together with Wilshire, the
"Servicers"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Securities Administrator that:
In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely in the case of a
Certificate other than an ERISA Restricted Certificate or Class R Certificate,
either (i) we are not, and are not acquiring the Certificate for, on behalf of
or with any assets of, any employee benefit plan or other arrangement subject to
Title I of ERISA or any plan subject to Section 4975 of the Code, or (ii)
H-1
until the termination of the Swap Agreement, our acquisition and holding of the
Certificate is covered by and exempt under any of Section 408(b)(17) of ERISA or
Section 4975(d)(20) of the Code, Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, PTCE 95-60, or PTCE 96-23, (e) solely with respect
to ERISA Restricted Certificates, (A) we are not an employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), a plan subject to any state, local, federal,
non-U.S. or other law substantively similar to the foregoing provisions of ERISA
or the Code ("Similar Law"), or Persons directly or indirectly acting on behalf
of or using any assets of any such plan, or (B), if the Certificate has been the
subject of an ERISA-Qualifying Underwriting, we are an insurance company that is
acquiring the Certificate with assets of an "insurance company general account,"
as defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60 or (C) solely in the event the
Certificate is a Definitive Certificate, we will herewith deliver an Opinion of
Counsel satisfactory to the Securities Administrator, and upon which the
Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of the Certificate will not constitute or result in a
nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Trustee, the
Master Servicer, the Securities Administrator, the Servicers or the Depositor to
any obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator, the Servicers or the
Depositor, (f) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (g) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
H-2
We agree to indemnify the Trustee, the Master Servicer, the Securities
Administrator, the Servicers and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $____________ * in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
_______ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
_______ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by Federal, State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
_______ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over such institution or is a foreign savings and
loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_______ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the
----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
H-4
Securities Exchange Act of 1934, as amended.
_______ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of the State,
territory or the District of Columbia.
_______ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
_______ ERISA Plan. The Buyer is an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of
1974, as amended.
_______ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
_______ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
_______ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-5
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
______ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
______ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
H-7
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
H-8
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Account Manager--MLMI 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
In connection with the administration of the Mortgage Loans held by you, as
Custodian on behalf of the Trustee, pursuant to the Pooling and Servicing
Agreement dated as of September 1, 2006 among Xxxxxxx Xxxxx Mortgage Investors,
Inc., as depositor, LaSalle Bank National Association, as master servicer and
securities administrator, Citibank, N.A., as trustee, IndyMac Bank, F.S.B., as a
servicer and Wilshire Credit Corporation, as a servicer (the "Pooling and
Servicing Agreement"), we request the release, and hereby acknowledge receipt,
of the Mortgage File for the Mortgage Loan described below, for the reason
indicated.
Mortgage Loan Number: __________________________
Mortgagor Name, Address & Zip Code: _________________________
Reason for Requesting Documents (check one):
_________ 1. Mortgage Paid in Full
_________ 2. Foreclosure
_________ 3. Substitution
_________ 4. Other Liquidation (Repurchases, etc.)
_________ 5. Nonliquidation
Address to which the Trustee or the Custodian on its behalf should deliver the
Mortgage File:
By:
------------------------------------
(authorized signer)
Address:
-------------------------------
Date:
----------------------------------
I-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4 or 5 above is checked, upon our return of all of the above documents
to you as Custodian on behalf of the Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
--------------------------------- ----------------------------------------
Signature Date
Documents returned to Custodian:
By:
--------------------------------- ----------------------------------------
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
[DATE]
LaSalle Bank National Association, as Master Servicer
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Account Manager -- MLMI 2006-HE5
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of September 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Wilshire
Credit Corporation, as a servicer, IndyMac Bank, F.S.B., as a servicer,
Citibank, N.A. as trustee, and LaSalle Bank National Association, as master
servicer and securities administrator, relating to Xxxxxxx Xxxxx Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-HE5
The Securities Administrator hereby certifies to the Depositor and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[2006] (the "Annual Report"), and all reports on Form 8-K (if any) and on Form
10-D required to be filed in respect of the period covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the Issuing Entity;
2. To the best of my knowledge, and assuming the accuracy of the statements
required to be made or data required to be delivered by the Servicers, Master
Servicer, Swap Counterparty and Depositor (to the extent that such statements or
data were received by the Securities Administrator and are relevant to the
statements made by the Securities Administrator in this Officer's Certificate),
the information in the Reports relating to the Securities Administrator, taken
as a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by the Annual Report;
3. To the best of my knowledge, and assuming the accuracy of the statements
required to be made or data required to be delivered by the Master Servicer,
Servicer, Swap Counterparty and Depositor (to the extent that such statements or
data were received by the Securities Administrator and are relevant to the
statements made by the Securities Administrator in this Back-Up Certification),
the distribution and any other information required to be provided by the
Securities Administrator (other than information provided by or on behalf of the
Servicers, the Master Servicer, the Depositor or other third party) to the
Depositor and Master Servicer under the 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 of the Securities Administrator and its related
attestation report on assessment of compliance with servicing criteria required
to be included in the Annual Report in accordance with Item 1122 of Regulation
AB and Exchange Act Rules 13a-18 and 15d-18 has been included as an exhibit to
the Annual Report. Any material instances of non-compliance are described in
such report and have been disclosed in the Annual Report; and
K-1
6. I am responsible for reviewing the activities performed by the
Securities Administrator under the Agreement and the Securities Administrator
has, as of the date hereof fulfilled its obligations under the Agreement and
there are no significant deficiencies relating to the Securities Administrator's
compliance with the Agreement.
LaSalle Bank National Association,
as Securities Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
K-2
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Account Manager--MLMI 2006-HE5
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
[_____] (the "Servicer") certifies to the Depositor, the Master Servicer
and the Securities Administrator, and their officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
(1) I am responsible for reviewing the activities performed by the Servicer
under the Pooling and Servicing Agreement and I have reviewed, or persons under
my supervision have reviewed, the servicer compliance statement of the Servicer
and the compliance statements of each Sub-Servicer, if any, engaged by the
Servicer provided to the Depositor, the Master Servicer and the Securities
Administrator for the Trust's fiscal year [___] in accordance with Item 1123 of
Regulation AB (each a "Compliance Statement"), the report on assessment of the
Servicer's compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment of compliance
with servicing criteria for asset-backed securities of the Servicer and of each
Sub-Servicer [or Subcontractor], if any, engaged or utilized by the Servicer
provided to the Depositor, the Master Servicer and the Securities Administrator
for the Issuing Entity's fiscal year [___] in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Item 1122 of Regulation AB (each a "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with Rules
13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
related to each Servicing Assessment (each a "Attestation Report"), and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[_] that were
delivered or caused to be delivered by the Servicer pursuant to the Agreement
(collectively, the "Servicing Information");
(2) Based on my knowledge, and assuming the accuracy of the information
provided to the Servicer in connection with the transfer of servicing of the
Mortgage Loans to the Servicer and in connection with the performance of the
Servicer's duties under the Pooling and Servicing Agreement, the Servicing
Information, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under
L-1
which such statements were made, not misleading with respect to the period of
time covered by the Servicing Information;
(3) Based on my knowledge, the servicing information required to be
provided to the Master Servicer by the Servicer pursuant to the Pooling and
Servicing Agreement has been provided to the Master Servicer, the Securities
Administrator and the Depositor;
(4) Based on my knowledge and the compliance review conducted in preparing
each Compliance Statement of the Servicer and, if applicable, reviewing each
Compliance Statement of each Sub-Servicer, if any, engaged by the Servicer, and
except as disclosed in such Compliance Statement[(s)], the Servicer [(directly
and through its Sub-Servicers, if any)] has fulfilled its obligations under the
Pooling and Servicing Agreement in all material respects.
(5) Each Servicing Assessment of the Servicer and of each Sub-Servicer [or
Subcontractor], if any, engaged or utilized by the Servicer and its related
Attestation Report required to be included in the Annual Report in accordance
with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has
been provided to the Depositor and the Trustee. Any material instances of
non-compliance are described in any such Servicing Assessment or Attestation
Report.
Date:
-------------------------------
[__________],
as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
X-0
XXXXXXX X-0
FORM OF CLASS A-1 CAP CONTRACT
EXECUTION COPY
(RBS LOGO)
The Royal Bank of Scotland
DATE: September 28, 2006
TO: LaSalle Bank National Association, not in its individual
capacity, but solely as Securities Administrator of Xxxxxxx
Xxxxx Mortgage Investors Trust, Series 2006-HE5 (the
"TRUST")
ATTENTION: Xxxxx X. Xxxxxxxxx-Xxxxxx, Global Securities and Trust
Services
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
TO: Xxxxxxx Xxxxx Mortgage Lending, Inc.
ATTENTION: Xxxx X'Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: The Royal Bank of Scotland plc
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER(S): IRG16082445
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between The Royal Bank of Scotland plc ("CAP PROVIDER"),
LaSalle Bank National Association, not in its individual capacity, but solely as
Securities Administrator (the "COUNTERPARTY") of Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2006-HE5 and, solely with respect to Paragraphs 8 and 9,
Xxxxxxx Xxxxx Mortgage Lending, Inc. ("MLML"). This Agreement, which evidences a
complete and binding agreement between you and us to enter into the Transaction
on the terms set forth below, constitutes a "Confirmation" as referred to in the
"ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as
referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the "DEFINITIONS"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement and in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA FORM MASTER AGREEMENT"), an ISDA Form Master Agreement
shall be deemed to have been executed by you and us on the date we entered into
the Transaction. In the event of any inconsistency between the provisions of
this Agreement and the Definitions or the ISDA Form Master Agreement, this
Agreement shall prevail for purposes of the Transaction. For the avoidance of
doubt, this
M-1-2
Reference Number: IRG16082445
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 2 of 15
Agreement is intended to be a stand alone agreement and is therefore not subject
to any ISDA Master Agreement actually executed and existing between the parties
hereto.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap Corridor
Notional Amount: Shall equal the lesser of (1) the Notional Amount
as detailed in Appendix A attached hereto and (2)
the aggregate Certificate Balance of the Class A-1
Certificates immediately prior to the related
Floating Rate Payer Payment Date. The Securities
Administrator shall make available each month via
the Securities Administrator's website a statement
containing the aggregate Certificate Principal
Balance of the Class A-1 Certificates as of the
first day of such Calculation Period and shall
notify the Cap Provider at least five (5) Business
Days prior to the related Floating Rate Payer
Payment Date of the aggregate Certificate Principal
Balance of the Class A-1 Certificates as of the
first day of such Calculation Period and shall send
such notification to the Cap Provider at the
following email addresses:
Xxxxxxx.Xxxxxxx@xxxxx.xxx and
XXXxxxxXxxxxxx@xxxxx.xxx; provided, however, that
if the Securities Administrator shall not provide
such email notification, the Cap Provider shall
rely upon the statement of Certificate Principal
Balance of the Class A-1 Certificates made
available on the Securities Administrator's
website.
Any payment by the Cap Provider to the Counterparty
in excess of the amount due under this Transaction
on any Floating Rate Payer Payment Date shall be
returned by the Counterparty to the Cap Provider
promptly after notification from the Counterparty
that the Counterparty is aware of such overpayment.
Other than the return of such overpayment, neither
the Cap Provider nor the Counterparty shall incur
any penalty or liability hereunder with respect to
such overpayment.
Trade Date: September 8, 2006
Effective Date: September 28, 2006
Reference Number: IRG16082445
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September 28, 2006
Page 3 of 15
Termination Date: March 25, 2007, subject to adjustment in accordance
with the Business Day Convention.
FIXED AMOUNT:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: September 28, 2006
Fixed Amount: [_________]
FLOATING AMOUNTS:
Floating Rate Cap Provider
Payer:
Cap Rate: For each Floating Payer Period End Date the
percentage set forth in Appendix A as the Cap Rate
for such Floating Rate Payer Period End Date.
Floating Rate The 25th calendar day of each month during the Term
Payer Period End of this Transaction, commencing October 25, 2006,
Dates: and ending on the Termination Date, subject to
adjustment in accordance with the Business Day
Convention.
Floating Rate Early Payment shall be applicable. The Floating
Payer Payment Rate Payer Payment Date shall be two (2) Business
Dates: Days prior to each Floating Rate Payer Period End
Date.
Floating Rate USD-LIBOR-BBA; provided, however, if the Floating
Option: Rate Option for any Calculation Period is greater
than 10.850% then the Floating Rate Option for such
Calculation Period shall be deemed to be 10.850%.
Floating Amount To be determined in accordance with the following
formula: the greater of (i) (Floating Rate Option -
Cap Rate) * Notional Amount * Floating Rate Day
Count Fraction and (ii) zero.
Designated One month.
Maturity:
Floating Rate Day
Count
Fraction: Actual/360
Reference Number: IRG16082445
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September 28, 2006
Page 4 of 15
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Business Day
Convention: Modified Following
Calculation Agent: Cap Provider
3. Additional Provisions:
Each party hereto is hereby advised and acknowledges that the other party
has engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into the Transaction
being entered into on the terms and conditions set forth herein and in the
Confirmation relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
a) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
b) Termination Provisions. For purposes of the Master Agreement:
(i) "Specified Entity" is not applicable to Cap Provider or
Counterparty for any purpose.
(ii) "Specified Transaction" is not applicable to Cap Provider or
Counterparty for any purpose, and, accordingly, Section 5(a)(v)
of the ISDA Form Master Agreement shall not apply to Cap Provider
or Counterparty.
(iii) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA
Form Master Agreement will not apply to Counterparty.
(iv) The provisions of Section 5 (a) (ii), (iii), and (iv) of the ISDA
Form Master Agreement will not apply to Counterparty.
(v) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of
the ISDA Form Master Agreement will not apply to Cap Provider or
Counterparty.
(vi) The "Automatic Early Termination" provision of Section 6(a) of
the ISDA Form Master Agreement will not apply to Cap Provider or
to Counterparty.
Reference Number: IRG16082445
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September 28, 2006
Page 5 of 15
(vii) Payments on Early Termination. For the purpose of Section 6(e)
of the ISDA Form Master Agreement:
(A) Market Quotation will apply.
(B) The Second Method will apply.
(viii) "Termination Currency" means United States Dollars.
c) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e) of the ISDA
Form Master Agreement, Cap Provider and Counterparty each 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) of the ISDA Form Master Agreement) 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) of the ISDA Form Master Agreement;
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement
and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of the ISDA Form Master Agreement;
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) of the ISDA Form
Master Agreement by reason of material prejudice to its legal or
commercial position.
Payee Tax Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement,
(i) Cap Provider makes no Payee Tax Representations.
Counterparty makes no Payee Tax Representations.
d) Miscellaneous.
Reference Number: IRG16082445
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September 28, 2006
Page 6 of 15
(i) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Cap Provider:
Address: 00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Legal Department - Derivatives Documentation
Facsimile: 0-000-000-0000/2534
Phone: 0-000-000-0000/2532
With a copy to:
Address: Greenwich Capital Markets, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: 0-000-000-0000
Phone: 0-000-000-0000
Address for notices or communications to the Counterparty:
Address: LaSalle Bank National Association
Global Securities and Trust Services
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Client Manager - MLMI 2006-HE5
Facsimile: (000) 000-0000
Phone: (000) 000-0000
(ii) Process Agent. For the purpose of Section 13(c) of the ISDA Form
Master Agreement: Not Applicable.
(iii) Offices. The provisions of Section 10(a) will apply to the ISDA
Form Master Agreement.
(iv) Multibranch Party. For the purpose of Section 10(c) of the ISDA
Form Master Agreement:
Cap Provider is a Multibranch Party.
The Counterparty is not a Multibranch Party.
(v) Credit Support Document. Not applicable for either Cap Provider
or the Counterparty.
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September 28, 2006
Page 7 of 15
(vi) Credit Support Provider. Not applicable for either Cap Provider
or the Counterparty.
(vii) Governing Law. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof, other than New York General Obligation Law Section
5-1401.
(viii) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(ix) 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 officers or
employees 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.
(x) Waiver of Jury Trial. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(xi) Transfer, Amendment and Assignment. Cap Provider shall not
unreasonably withhold its consent to any Assignment of this
Agreement. This Agreement shall not be transferred or amended
unless the Counterparty shall have received prior written
confirmation from each of the Rating Agencies that such amendment
or transfer will not cause such Rating Agency to downgrade or
withdraw its then-current ratings of any outstanding
Certificates.
(xii) Proceedings. Cap Provider shall not institute against or cause
any other person to institute against, or join any other person
in instituting against, Counterparty
Reference Number: IRG16082445
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September 28, 2006
Page 8 of 15
or 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 following payment in full of the Securities.
e) Section 3 of the ISDA Form Master Agreement is hereby amended by adding
at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Subject to Paragraph 6 herein, each party represents to the other
party on each date when it enters into a Transaction that:
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement in respect of that Transaction.
(2) Evaluation and Understanding.
(i) Each party is acting for its own account and has made
its own independent decisions to enter into this Transaction
and as to whether this Transaction is appropriate or proper
for it based upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into this
Transaction; it being understood that information and
explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction. It has not
received from the other party any assurance or guarantee as
to the expected results of this Transaction.
(ii) It is capable of evaluating and understanding (on its
own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of
this Transaction. It is also capable of assuming, and
assumes, the financial and other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.
(3) Purpose. It is an "eligible contract participant" as defined
in Section 1(a)(12) of the Commodity Exchange Act, as amended."
Reference Number: IRG16082445
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September 28, 2006
Page 9 of 15
f) Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of
the ISDA Form Master Agreement, if Counterparty has satisfied its payment
obligations under Section 2(a)(i) of the ISDA Form Master Agreement, then
unless Cap Provider is required pursuant to appropriate proceedings to
return to Counterparty or otherwise returns to Counterparty upon demand of
Counterparty any portion of such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect to
Counterparty shall not constitute an Event of Default or Potential Event of
Default with respect to Counterparty as the Defaulting Party and (b) Cap
Provider shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the ISDA Form Master Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the ISDA Form Master Agreement with respect to Cap Provider as the
Affected Party or Section 5(b)(iii) of the ISDA Form Master Agreement with
respect to Cap Provider as the Burdened Party. For purposes of the
Transaction to which this Agreement relates, Counterparty's only obligation
under Section 2(a)(i) of the ISDA Form Master Agreement is to pay the Fixed
Amount on the Fixed Rate Payer Payment Date.
g) Set-off. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
h) Additional Termination Events. Additional Termination Events will apply.
(i) If a Rating Agency Downgrade has occurred and Cap Provider has
not, within 30 days, complied with Clause i below, then an
Additional Termination Event shall have occurred with respect to
Cap Provider and Cap Provider shall be the sole Affected Party
with respect to such an Additional Termination Event.
(ii) If (A) Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI"), as
depositor under the Pooling Agreement (as defined in Paragraph 6
below) still has a reporting obligation with respect to this
Transaction pursuant to Regulation AB and (B) the Cap Provider
has not, within 30 days after receipt of a Cap Disclosure Request
complied with the provisions set forth in Paragraph 7 below
(provided that if the significance percentage reaches 10% after a
Cap Disclosure Request has been made to Cap Provider, Cap
Provider must comply with the provisions set forth in Paragraph 7
below within 10 days of Cap Provider being informed of the
significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to Cap
Provider and Cap Provider shall be the sole Affected Party with
respect to such Additional Termination Event.
i) Rating Agency Downgrade. If a Ratings Event (as defined below) occurs
with respect to the Cap Provider, then the Cap Provider shall, at its own
expense, (i) assign this Transaction hereunder to a third party within
thirty (30) days of such Ratings Event that meets or exceeds, or as to
which any applicable credit support provider meets or exceeds, the Approved
Ratings Thresholds (as defined below), (ii) deliver Eligible Collateral in
an amount (after taking the relevant Valuation Percentages into account)
equal to the Exposure
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September 28, 2006
Page 10 of 15
(as defined below), and an executed 1994 ISDA Credit Support Annex (subject
to New York law), within thirty (30) days of such Ratings Event and if any
Securities are outstanding, subject to the applicable Rating Agencies'
written confirmation that delivery of such collateral in the context of
such downgrade will not result in a withdrawal, qualification or downgrade
of the then current ratings assigned to the Securities (such confirmation,
a "RATING AGENCY CONFIRMATION"), or (iii) any other action subject to
Rating Agency Confirmation. For the avoidance of doubt, a downgrade of the
rating on the Securities could occur in the event that the Cap Provider
does not post sufficient collateral. For purposes of this Transaction, a
"RATINGS EVENT" shall occur with respect to the Cap Provider, if its
long-term unsecured and unsubordinated debt rating ceases to be rated at
least "AA-" by S&P, and at least "Aa3" by Moody's (including in connection
with a merger, consolidation or other similar transaction by the Cap
Provider) such ratings being referred to herein as the "APPROVED RATINGS
THRESHOLDS", (unless, within 30 days after such withdrawal or downgrade,
the applicable Rating Agencies have reconfirmed the rating of the
Securities, as applicable, which was in effect immediately prior to such
withdrawal or downgrade). Notwithstanding the foregoing, in the event that
the Cap Provider's long-term unsecured and unsubordinated debt rating is
either (i) withdrawn or (ii) reduced below "BBB-" by S&P or "A2" by
Moody's, or its unsecured, short-term debt obligation is reduced below
"A-3" by S&P, then the Cap Provider shall, within ten (10) days of such
reductions, at its own expense, and subject to Rating Agency Confirmation,
(i) secure another entity to replace the Cap Provider as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty acceptable
to the Rating Agencies of another person with the Approved Rating
Thresholds to honor the Cap Provider's obligations under this Agreement, or
(iii) take any other action subject to Rating Agency Confirmation. Failure
to satisfy the foregoing shall constitute an Additional Termination Event
as defined by Section 5(b)(v) of the ISDA Form Master Agreement, with the
Cap Provider as the sole Affected Party. Notwithstanding any of the above
downgrades, unless and until the Cap Provider transfers the Transaction to
a replacement counterparty pursuant to the foregoing, the Cap Provider will
continue to perform its obligations under the Transaction. The Cap
Provider's failure to comply with the above downgrade provisions and
requirements shall constitute the sole Additional Termination Events as
defined in Section 5(b)(v) of the ISDA Form Master Agreement. Only with
respect to such Ratings Event, "EXPOSURE" shall mean the following: (i) the
xxxx-to-market value of the Transaction as of the Valuation Date as such
term is defined in the 1994 ISDA Credit Support Annex (subject to New York
law). The provisions of Paragraph 6(c) shall apply to Counterparty. In the
event that the parties hereto execute a 1994 ISDA Credit Support Annex upon
the occurrence of a Ratings Event, Cap Provider shall request its legal
counsel to deliver to Counterparty an opinion as to the enforceability of
the Agreement and the 1994 ISDA Credit Support Annex (provided that each of
S&P and Moody's shall be permitted to receive a copy of such opinion for
the purposes of information only and the Cap Provider's legal counsel shall
not have any liability to S&P, Moody's or any person other than the
Counterparty in relation to the contents of such opinion).
Reference Number: IRG16082445
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September 28, 2006
Page 11 of 15
5. Account Details and Settlement PAYMENTS TO CAP PROVIDER:
Information: X.X. Xxxxxx Chase Bank, New York
Agent Swift Address: XXXXXX00
ABA#: 000000000
Beneficiary: The Royal Bank of Scotland plc
Account #400930153
PAYMENTS TO COUNTERPARTY:
ABA#: 071 000 505
Account #: 724111.3
Re: MLMI 2006-HE5
6. Limitation of Liability of Securities Administrator
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by LaSalle Bank National Association
not individually but solely as securities administrator (the "SECURITIES
ADMINISTRATOR") on behalf of Citibank, N.A. as trustee (the "TRUSTEE") of
the Trust, in the exercise of the powers and authority conferred upon and
vested in it under the Pooling and Servicing Agreement dated as of
September 1, 2006, by and among the Trustee, as trustee, MLMI, as depositor
(the "DEPOSITOR"), LaSalle Bank, as master servicer (the "MASTER SERVICER")
and Securities Administrator and Wilshire Credit Corporation, as a servicer
and IndyMac Bank, F.S.B., as a servicer (the "POOLING AGREEMENT") and
pursuant to instructions set forth therein, and that the Securities
Administrator shall perform its duties and obligations hereunder in
accordance with the standard of care set forth in the Pooling Agreement,
(b) each of the representations, undertakings and agreements herein is made
and intended not as a personal representation, undertaking or agreement of
the Securities Administrator but is made and intended for the purpose of
binding only the Trust, and (c) under no circumstances shall the Securities
Administrator be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust herein; provided that nothing in this paragraph shall relieve the
Securities Administrator from performing its duties and obligations
hereunder in accordance with the standard of care set forth in the Pooling
Agreement.
7. Compliance with Regulation AB
a) The Cap Provider acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB, the
Depositor is required under Regulation AB under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended
("REGULATION AB"), to disclose certain information set forth in Regulation
AB regarding the Cap Provider or its group of affiliated entities, if
applicable, depending on the aggregate "significance percentage" of this
Agreement and any other derivative contracts between the Cap Provider or
its group of affiliated entities,
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September 28, 2006
Page 12 of 15
if applicable, and the Counterparty, as calculated from time to time in
accordance with Item 1115 of Regulation AB.
b) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nine (9)
percent, then the Depositor may request on a Business Day after the date of
such determination from the Cap Provider the same information set forth in
Item 1115(b) of Regulation AB that would have been required if the
significance percentage had in fact increased to ten (10) percent (such
request, a "CAP DISCLOSURE REQUEST" and such requested information, subject
to the last sentence of this paragraph, is the "CAP FINANCIAL DISCLOSURE").
The Depositor shall provide the Cap Provider and the Counterparty with the
calculations and any other information reasonably requested by the Cap
Provider or the Counterparty with respect to the Depositor's determination
that led to the Cap Disclosure Request. The parties hereto further agree
that the Cap Financial Disclosure provided to meet the Cap Disclosure
Request may be, solely at the Cap Provider's option, either the information
set forth in Item 1115(b)(1) or Item 1115(b)(2) of Regulation AB.
c) Upon the occurrence of a Cap Disclosure Request, the Cap Provider, at
its own expense, shall (i) provide the Depositor with the Cap Financial
Disclosure, (ii) subject to Rating Agency Confirmation, secure another
entity to replace the Cap Provider as party to this Agreement on terms
substantially similar to this Agreement which entity is able to provide the
Cap Financial Disclosure or (iii) subject to Rating Agency Confirmation,
obtain a guaranty of the Cap Provider's obligations under this Agreement
from an affiliate of the Cap Provider that is able to provide with the Cap
Financial Disclosure, such that disclosure provided in respect of the
affiliate will satisfy any disclosure requirements applicable to the Cap
Provider, and cause such affiliate to provide Cap Financial Disclosure. If
permitted by Regulation AB, any required Cap Financial Disclosure may be
provided by incorporation by reference from reports filed pursuant to the
Securities Exchange Act. For purposes of clause (ii) above, the parties
agree that National Westminster Bank Plc ("NATWEST") shall be an acceptable
replacement for the Cap Provider, so long as NatWest is able to provide
suitable Cap Financial Disclosure.
8. MLML Shall Not Benefit
The parties hereto agree and acknowledge that amounts paid hereunder are
not intended to benefit the holder of any class of certificates rated by
any rating agency if such holder is MLML or any of its affiliates. If MLML
or any of its affiliates receives any such amounts, it will promptly remit
(or, if such amounts are received by an affiliate of MLML, MLML hereby
agrees that it will cause such affiliate to promptly remit) such amounts to
the Securities Administrator, whereupon the Securities Administrator will
promptly remit such amounts to the Cap Provider.
9. In the event that the transaction to which the Pooling Agreement relates
does not occur, and the Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-HE5 is not formed, the Cap
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September 28, 2006
Page 13 of 15
Provider and MLML agree that MLML shall become the Cap Counterparty under
this Agreement.
10. Agency Role of Greenwich Capital Markets, Inc.
This Transaction has been entered into by Greenwich Capital Markets, Inc.,
as agent for the Cap Provider. Greenwich Capital Markets, Inc. has not
guaranteed and is not otherwise responsible for the obligations of the Cap
Provider under this Transaction.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
Reference Number: IRG16082445
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 14 of 15
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE ROYAL BANK OF SCOTLAND PLC
BY: GREENWICH CAPITAL MARKETS, INC.,
ITS AGENT
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
SECURITIES ADMINISTRATOR OF XXXXXXX XXXXX MORTGAGE INVESTORS TRUST, SERIES
2006-HE5
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraphs 8 and 9,
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Reference Number: IRG16082445
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 15 of 15
APPENDIX A
(all such dates subject to adjustment in accordance with
the Business Day Convention)
From and including To but excluding Notional Amount (USD) Cap Rate (%)
------------------ ---------------- --------------------- ------------
9/28/2006 10/25/2006 169,018,000 8.583
10/25/2006 11/25/2006 166,857,355 7.456
11/25/2006 12/25/2006 164,232,026 7.71
12/25/2006 1/25/2007 161,147,335 7.457
1/25/2007 2/25/2007 157,610,822 7.457
2/25/2007 3/25/2007 153,631,942 8.273
EXHIBIT M-2
FORM OF CLASS A-2 CAP CONTRACT
EXECUTION COPY
(RBS LOGO)
The Royal Bank of Scotland
DATE: September 28, 2006
TO: LaSalle Bank National Association, not in its individual
capacity, but solely as Securities Administrator of
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
(the "TRUST")
ATTENTION: Xxxxx X. Xxxxxxxxx-Xxxxxx, Global Securities and Trust
Services
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
TO: Xxxxxxx Xxxxx Mortgage Lending, Inc.
ATTENTION: Xxxx X'Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: The Royal Bank of Scotland plc
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER(S): IRG16082450
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between The Royal Bank of Scotland plc ("CAP PROVIDER"),
LaSalle Bank National Association, not in its individual capacity, but solely as
Securities Administrator (the "COUNTERPARTY") of Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2006-HE5 and, solely with respect to Paragraphs 8 and 9,
Xxxxxxx Xxxxx Mortgage Lending, Inc. ("MLML"). This Agreement, which evidences a
complete and binding agreement between you and us to enter into the Transaction
on the terms set forth below, constitutes a "Confirmation" as referred to in the
"ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as
referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the "DEFINITIONS"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement and in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA FORM MASTER AGREEMENT"), an ISDA Form Master Agreement
shall be deemed to have been executed by you and us on the date we entered into
the Transaction. In the event of any inconsistency between the provisions of
this Agreement and the Definitions or the ISDA Form Master Agreement, this
Agreement shall prevail for purposes of the Transaction. For the avoidance of
doubt, this
M-2-2
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 2 of 15
Agreement is intended to be a stand alone agreement and is therefore
not subject to any ISDA Master Agreement actually executed and existing between
the parties hereto.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap Corridor
Notional Amount: Shall equal the lesser of (1) the Notional Amount
as detailed in Appendix A attached hereto and (2)
the aggregate Certificate Balance of the Class A-2
Certificates immediately prior to the related
Floating Rate Payer Payment Date. The Securities
Administrator shall make available each month via
the Securities Administrator's website a statement
containing the aggregate Certificate Principal
Balance of the Class A-2 Certificates as of the
first day of such Calculation Period and shall
notify the Cap Provider at least five (5) Business
Days prior to the related Floating Rate Payer
Payment Date of the aggregate Certificate Principal
Balance of the Class A-2 Certificates as of the
first day of such Calculation Period and shall send
such notification to the Cap Provider at the
following email addresses:
Xxxxxxx.Xxxxxxx@xxxxx.xxx and
XXXxxxxXxxxxxx@xxxxx.xxx; provided, however, that
if the Securities Administrator shall not provide
such email notification, the Cap Provider shall
rely upon the statement of Certificate Principal
Balance of the Class A-2 Certificates made
available on the Securities Administrator's
website.
Any payment by the Cap Provider to the Counterparty
in excess of the amount due under this Transaction
on any Floating Rate Payer Payment Date shall be
returned by the Counterparty to the Cap Provider
promptly after notification from the Counterparty
that the Counterparty is aware of such overpayment.
Other than the return of such overpayment, neither
the Cap Provider nor the Counterparty shall incur
any penalty or liability hereunder with respect to
such overpayment.
Trade Date: September 8, 2006
Effective Date: September 28, 2006
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 3 of 15
Termination Date: March 25, 2007, subject to adjustment in accordance
with the Business Day Convention.
FIXED AMOUNT:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: September 28, 2006
Fixed Amount: [__________]
FLOATING AMOUNTS:
Floating Rate Payer: Cap Provider
Cap Rate: For each Floating Payer Period End Date the
percentage set forth in Appendix A as the Cap Rate
for such Floating Rate Payer Period End Date.
Floating Rate Payer The 25th calendar day of each month during the
Period End Dates: Term of this Transaction, commencing October 25,
2006, and ending on the Termination Date, subject
to adjustment in accordance with the Business Day
Convention.
Floating Rate Payer Early Payment shall be applicable. The Floating
Payment Dates: Rate Payer Payment Date shall be two (2) Business
Days prior to each Floating Rate Payer Period End
Date.
Floating Rate Option: USD-LIBOR-BBA; provided, however, if the Floating
Rate Option for any Calculation Period is greater
than 10.200% then the Floating Rate Option for such
Calculation Period shall be deemed to be 10.200%.
Floating Amount To be determined in accordance with the following
formula: the greater of (i) (Floating Rate Option -
Cap Rate) * Notional Amount * Floating Rate Day
Count Fraction and (ii) zero.
Designated Maturity: One month.
Floating Rate Day Count
Fraction: Actual/360
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 4 of 15
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Business Day Convention: Modified Following
Calculation Agent: Cap Provider
3. Additional Provisions:
Each party hereto is hereby advised and acknowledges that the other party
has engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into the Transaction
being entered into on the terms and conditions set forth herein and in the
Confirmation relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
a) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
b) Termination Provisions. For purposes of the Master Agreement:
(i) "Specified Entity" is not applicable to Cap Provider or
Counterparty for any purpose.
(ii) "Specified Transaction" is not applicable to Cap Provider or
Counterparty for any purpose, and, accordingly, Section 5(a)(v)
of the ISDA Form Master Agreement shall not apply to Cap Provider
or Counterparty.
(iii) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA
Form Master Agreement will not apply to Counterparty.
(iv) The provisions of Section 5 (a) (ii), (iii), and (iv) of the ISDA
Form Master Agreement will not apply to Counterparty.
(v) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of
the ISDA Form Master Agreement will not apply to Cap Provider or
Counterparty.
(vi) The "Automatic Early Termination" provision of Section 6(a) of
the ISDA Form Master Agreement will not apply to Cap Provider or
to Counterparty.
Reference Number: IRG16082450
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September 28, 2006
Page 5 of 15
(vii) Payments on Early Termination. For the purpose of Section 6(e)
of the ISDA Form Master Agreement:
(A) Market Quotation will apply.
(B) The Second Method will apply.
(viii) "Termination Currency" means United States Dollars.
c) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e) of the ISDA
Form Master Agreement, Cap Provider and Counterparty each 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) of the ISDA Form Master Agreement) 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) of the ISDA Form Master Agreement;
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement
and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of the ISDA Form Master Agreement;
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) of the ISDA Form
Master Agreement by reason of material prejudice to its legal or
commercial position.
Payee Tax Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement,
(i) Cap Provider makes no Payee Tax Representations.
Counterparty makes no Payee Tax Representations.
d) Miscellaneous.
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 6 of 15
(i) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Cap Provider:
Address: 00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Legal Department - Derivatives Documentation
Facsimile: 0-000-000-0000/2534
Phone: 0-000-000-0000/2532
With a copy to:
Address: Greenwich Capital Markets, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: 0-000-000-0000
Phone: 0-000-000-0000
Address for notices or communications to the Counterparty:
Address: LaSalle Bank National Association
Global Securities and Trust Services
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Client Manager - MLMI 2006-HE5
Facsimile: (000) 000-0000
Phone: (000) 000-0000
(ii) Process Agent. For the purpose of Section 13(c) of the ISDA Form
Master Agreement: Not Applicable.
(iii) Offices. The provisions of Section 10(a) will apply to the ISDA
Form Master Agreement.
(iv) Multibranch Party. For the purpose of Section 10(c) of the ISDA
Form Master Agreement:
Cap Provider is a Multibranch Party.
The Counterparty is not a Multibranch Party.
(v) Credit Support Document. Not applicable for either Cap Provider
or the Counterparty.
Reference Number: IRG16082450
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September 28, 2006
Page 7 of 15
(vi) Credit Support Provider. Not applicable for either Cap Provider
or the Counterparty.
(vii) Governing Law. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof, other than New York General Obligation Law Section
5-1401.
(viii) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(ix) 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 officers or
employees 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.
(x) Waiver of Jury Trial. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(xi) Transfer, Amendment and Assignment. Cap Provider shall not
unreasonably withhold its consent to any Assignment of this
Agreement. This Agreement shall not be transferred or amended
unless the Counterparty shall have received prior written
confirmation from each of the Rating Agencies that such amendment
or transfer will not cause such Rating Agency to downgrade or
withdraw its then-current ratings of any outstanding
Certificates.
(xii) Proceedings. Cap Provider shall not institute against or cause
any other person to institute against, or join any other person
in instituting against, Counterparty
Reference Number: IRG16082450
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September 28, 2006
Page 8 of 15
or 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 following payment in full of the Securities.
e) Section 3 of the ISDA Form Master Agreement is hereby amended by adding
at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Subject to Paragraph 6 herein, each party represents to the other
party on each date when it enters into a Transaction that:
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement in respect of that
Transaction.
(2) Evaluation and Understanding.
(i) Each party is acting for its own account and has
made its own independent decisions to enter into this
Transaction and as to whether this Transaction is
appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into
this Transaction; it being understood that information
and explanations related to the terms and conditions of
this Transaction shall not be considered investment
advice or a recommendation to enter into this
Transaction. It has not received from the other party
any assurance or guarantee as to the expected results
of this Transaction.
(ii) It is capable of evaluating and understanding (on
its own behalf or through independent professional
advice), and understands and accepts, the terms,
conditions and risks of this Transaction. It is also
capable of assuming, and assumes, the financial and
other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or
an advisor for it in respect of this Transaction.
(3) Purpose. It is an "eligible contract participant" as
defined in Section 1(a)(12) of the Commodity Exchange Act,
as amended."
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 9 of 15
f) Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of
the ISDA Form Master Agreement, if Counterparty has satisfied its payment
obligations under Section 2(a)(i) of the ISDA Form Master Agreement, then
unless Cap Provider is required pursuant to appropriate proceedings to
return to Counterparty or otherwise returns to Counterparty upon demand of
Counterparty any portion of such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect to
Counterparty shall not constitute an Event of Default or Potential Event of
Default with respect to Counterparty as the Defaulting Party and (b) Cap
Provider shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the ISDA Form Master Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the ISDA Form Master Agreement with respect to Cap Provider as the
Affected Party or Section 5(b)(iii) of the ISDA Form Master Agreement with
respect to Cap Provider as the Burdened Party. For purposes of the
Transaction to which this Agreement relates, Counterparty's only obligation
under Section 2(a)(i) of the ISDA Form Master Agreement is to pay the Fixed
Amount on the Fixed Rate Payer Payment Date.
g) Set-off. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
h) Additional Termination Events. Additional Termination Events will apply.
(i) If a Rating Agency Downgrade has occurred and Cap Provider has
not, within 30 days, complied with Clause i below, then an
Additional Termination Event shall have occurred with respect to
Cap Provider and Cap Provider shall be the sole Affected Party
with respect to such an Additional Termination Event.
(ii) If (A) Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI"), as
depositor under the Pooling Agreement (as defined in Paragraph 6
below) still has a reporting obligation with respect to this
Transaction pursuant to Regulation AB and (B) the Cap Provider
has not, within 30 days after receipt of a Cap Disclosure Request
complied with the provisions set forth in Paragraph 7 below
(provided that if the significance percentage reaches 10% after a
Cap Disclosure Request has been made to Cap Provider, Cap
Provider must comply with the provisions set forth in Paragraph 7
below within 10 days of Cap Provider being informed of the
significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to Cap
Provider and Cap Provider shall be the sole Affected Party with
respect to such Additional Termination Event.
i) Rating Agency Downgrade. If a Ratings Event (as defined below) occurs
with respect to the Cap Provider, then the Cap Provider shall, at its own
expense, (i) assign this Transaction hereunder to a third party within
thirty (30) days of such Ratings Event that meets or exceeds, or as to
which any applicable credit support provider meets or exceeds, the Approved
Ratings Thresholds (as defined below), (ii) deliver Eligible Collateral in
an amount (after taking the relevant Valuation Percentages into account)
equal to the Exposure
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 10 of 15
(as defined below), and an executed 1994 ISDA Credit Support Annex (subject
to New York law), within thirty (30) days of such Ratings Event and if any
Securities are outstanding, subject to the applicable Rating Agencies'
written confirmation that delivery of such collateral in the context of
such downgrade will not result in a withdrawal, qualification or downgrade
of the then current ratings assigned to the Securities (such confirmation,
a "RATING AGENCY CONFIRMATION"), or (iii) any other action subject to
Rating Agency Confirmation. For the avoidance of doubt, a downgrade of the
rating on the Securities could occur in the event that the Cap Provider
does not post sufficient collateral. For purposes of this Transaction, a
"RATINGS EVENT" shall occur with respect to the Cap Provider, if its
long-term unsecured and unsubordinated debt rating ceases to be rated at
least "AA-" by S&P, and at least "Aa3" by Moody's (including in connection
with a merger, consolidation or other similar transaction by the Cap
Provider) such ratings being referred to herein as the "APPROVED RATINGS
THRESHOLDS", (unless, within 30 days after such withdrawal or downgrade,
the applicable Rating Agencies have reconfirmed the rating of the
Securities, as applicable, which was in effect immediately prior to such
withdrawal or downgrade). Notwithstanding the foregoing, in the event that
the Cap Provider's long-term unsecured and unsubordinated debt rating is
either (i) withdrawn or (ii) reduced below "BBB-" by S&P or "A2" by
Moody's, or its unsecured, short-term debt obligation is reduced below
"A-3" by S&P, then the Cap Provider shall, within ten (10) days of such
reductions, at its own expense, and subject to Rating Agency Confirmation,
(i) secure another entity to replace the Cap Provider as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty acceptable
to the Rating Agencies of another person with the Approved Rating
Thresholds to honor the Cap Provider's obligations under this Agreement, or
(iii) take any other action subject to Rating Agency Confirmation. Failure
to satisfy the foregoing shall constitute an Additional Termination Event
as defined by Section 5(b)(v) of the ISDA Form Master Agreement, with the
Cap Provider as the sole Affected Party. Notwithstanding any of the above
downgrades, unless and until the Cap Provider transfers the Transaction to
a replacement counterparty pursuant to the foregoing, the Cap Provider will
continue to perform its obligations under the Transaction. The Cap
Provider's failure to comply with the above downgrade provisions and
requirements shall constitute the sole Additional Termination Events as
defined in Section 5(b)(v) of the ISDA Form Master Agreement. Only with
respect to such Ratings Event, "EXPOSURE" shall mean the following: (i) the
xxxx-to-market value of the Transaction as of the Valuation Date as such
term is defined in the 1994 ISDA Credit Support Annex (subject to New York
law). The provisions of Paragraph 6(c) shall apply to Counterparty. In the
event that the parties hereto execute a 1994 ISDA Credit Support Annex upon
the occurrence of a Ratings Event, Cap Provider shall request its legal
counsel to deliver to Counterparty an opinion as to the enforceability of
the Agreement and the 1994 ISDA Credit Support Annex (provided that each of
S&P and Moody's shall be permitted to receive a copy of such opinion for
the purposes of information only and the Cap Provider's legal counsel shall
not have any liability to S&P, Moody's or any person other than the
Counterparty in relation to the contents of such opinion).
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 11 of 15
5. Account Details and PAYMENTS TO CAP PROVIDER:
Settlement Information: X.X. Xxxxxx Chase Bank, New York
Agent Swift Address: XXXXXX00
ABA#: 000000000
Beneficiary: The Royal Bank of Scotland plc
Account #400930153
PAYMENTS TO COUNTERPARTY:
ABA#: 071 000 505
Account #: 724111.3
Re: MLMI 2006-HE5
6. Limitation of Liability of Securities Administrator
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by LaSalle Bank National Association
not individually but solely as securities administrator (the "SECURITIES
ADMINISTRATOR") on behalf of Citibank, N.A. as trustee (the "TRUSTEE") of
the Trust, in the exercise of the powers and authority conferred upon and
vested in it under the Pooling and Servicing Agreement dated as of
September 1, 2006, by and among the Trustee, as trustee, MLMI, as depositor
(the "DEPOSITOR"), LaSalle Bank, as master servicer (the "MASTER SERVICER")
and Securities Administrator and Wilshire Credit Corporation, as a servicer
and IndyMac Bank, F.S.B., as a servicer (the "POOLING AGREEMENT") and
pursuant to instructions set forth therein, and that the Securities
Administrator shall perform its duties and obligations hereunder in
accordance with the standard of care set forth in the Pooling Agreement,
(b) each of the representations, undertakings and agreements herein is made
and intended not as a personal representation, undertaking or agreement of
the Securities Administrator but is made and intended for the purpose of
binding only the Trust, and (c) under no circumstances shall the Securities
Administrator be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust herein; provided that nothing in this paragraph shall relieve the
Securities Administrator from performing its duties and obligations
hereunder in accordance with the standard of care set forth in the Pooling
Agreement.
7. Compliance with Regulation AB
a) The Cap Provider acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB, the
Depositor is required under Regulation AB under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended
("REGULATION AB"), to disclose certain information set forth in Regulation
AB regarding the Cap Provider or its group of affiliated entities, if
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 12 of 15
applicable, depending on the aggregate "significance percentage" of this
Agreement and any other derivative contracts between the Cap Provider or
its group of affiliated entities, if applicable, and the Counterparty, as
calculated from time to time in accordance with Item 1115 of Regulation AB.
b) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nine (9)
percent, then the Depositor may request on a Business Day after the date of
such determination from the Cap Provider the same information set forth in
Item 1115(b) of Regulation AB that would have been required if the
significance percentage had in fact increased to ten (10) percent (such
request, a "CAP DISCLOSURE REQUEST" and such requested information, subject
to the last sentence of this paragraph, is the "CAP FINANCIAL DISCLOSURE").
The Depositor shall provide the Cap Provider and the Counterparty with the
calculations and any other information reasonably requested by the Cap
Provider or the Counterparty with respect to the Depositor's determination
that led to the Cap Disclosure Request. The parties hereto further agree
that the Cap Financial Disclosure provided to meet the Cap Disclosure
Request may be, solely at the Cap Provider's option, either the information
set forth in Item 1115(b)(1) or Item 1115(b)(2) of Regulation AB.
c) Upon the occurrence of a Cap Disclosure Request, the Cap Provider, at
its own expense, shall (i) provide the Depositor with the Cap Financial
Disclosure, (ii) subject to Rating Agency Confirmation, secure another
entity to replace the Cap Provider as party to this Agreement on terms
substantially similar to this Agreement which entity is able to provide the
Cap Financial Disclosure or (iii) subject to Rating Agency Confirmation,
obtain a guaranty of the Cap Provider's obligations under this Agreement
from an affiliate of the Cap Provider that is able to provide with the Cap
Financial Disclosure, such that disclosure provided in respect of the
affiliate will satisfy any disclosure requirements applicable to the Cap
Provider, and cause such affiliate to provide Cap Financial Disclosure. If
permitted by Regulation AB, any required Cap Financial Disclosure may be
provided by incorporation by reference from reports filed pursuant to the
Securities Exchange Act. For purposes of clause (ii) above, the parties
agree that National Westminster Bank Plc ("NATWEST") shall be an acceptable
replacement for the Cap Provider, so long as NatWest is able to provide
suitable Cap Financial Disclosure.
8. MLML Shall Not Benefit
The parties hereto agree and acknowledge that amounts paid hereunder are
not intended to benefit the holder of any class of certificates rated by
any rating agency if such holder is MLML or any of its affiliates. If MLML
or any of its affiliates receives any such amounts, it will promptly remit
(or, if such amounts are received by an affiliate of MLML, MLML hereby
agrees that it will cause such affiliate to promptly remit) such amounts to
the Securities Administrator, whereupon the Securities Administrator will
promptly remit such amounts to the Cap Provider.
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 13 of 15
9. In the event that the transaction to which the Pooling Agreement relates
does not occur, and the Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-HE5 is not formed, the Cap Provider and MLML agree that MLML shall
become the Cap Counterparty under this Agreement.
10. Agency Role of Greenwich Capital Markets, Inc.
This Transaction has been entered into by Greenwich Capital Markets, Inc.,
as agent for the Cap Provider. Greenwich Capital Markets, Inc. has not
guaranteed and is not otherwise responsible for the obligations of the Cap
Provider under this Transaction.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 14 of 15
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE ROYAL BANK OF SCOTLAND PLC
BY: GREENWICH CAPITAL MARKETS, INC.,
ITS AGENT
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
SECURITIES ADMINISTRATOR OF XXXXXXX XXXXX MORTGAGE INVESTORS TRUST, SERIES
2006-HE5
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraphs 8 and 9,
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Reference Number: IRG16082450
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 15 of 15
APPENDIX A
(all such dates subject to adjustment in accordance with the Business Day
Convention)
From and including To but excluding Notional Amount (USD) Cap Rate (%)
------------------ ---------------- --------------------- ------------
9/28/2006 10/25/2006 903,126,000 8.324
10/25/2006 11/25/2006 893,538,187 7.232
11/25/2006 12/25/2006 881,459,437 7.478
12/25/2006 1/25/2007 866,901,784 7.232
1/25/2007 2/25/2007 849,891,133 7.233
2/25/2007 3/25/2007 830,469,155 8.023
EXHIBIT M-3
FORM OF SUBORDINATE CERTIFICATES CAP CONTRACT
EXECUTION COPY
(RBS LOGO)
The Royal Bank of Scotland
DATE: September 28, 2006
TO: LaSalle Bank National Association, not in its individual
capacity, but solely as Securities Administrator of
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
(the "TRUST")
ATTENTION: Xxxxx X. Xxxxxxxxx-Xxxxxx, Global Securities and Trust
Services
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
TO: Xxxxxxx Xxxxx Mortgage Lending, Inc.
ATTENTION: Xxxx X'Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: The Royal Bank of Scotland plc
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER(S): IRG16082453
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between The Royal Bank of Scotland plc ("CAP PROVIDER"),
LaSalle Bank National Association, not in its individual capacity, but solely as
Securities Administrator (the "COUNTERPARTY") of Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2006-HE5 and, solely with respect to Paragraphs 8 and 9,
Xxxxxxx Xxxxx Mortgage Lending, Inc. ("MLML"). This Agreement, which evidences a
complete and binding agreement between you and us to enter into the Transaction
on the terms set forth below, constitutes a "Confirmation" as referred to in the
"ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as
referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the "DEFINITIONS"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement and in lieu
of negotiating a Schedule to the 1992 ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA FORM MASTER AGREEMENT"), an
ISDA Form Master Agreement shall be deemed to have been executed by you and
us on the date we entered into the Transaction. In the event of any
inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. For the avoidance of doubt, this
M-3-2
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 2 of 15
Agreement is intended to be a stand alone agreement and is therefore not subject
to any ISDA Master Agreement actually executed and existing between the parties
hereto.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap Corridor
Notional Amount: Shall equal the lesser of (1) the Notional Amount
as detailed in Appendix A attached hereto and (2)
the aggregate Certificate Balance of the
Subordinate Certificates immediately prior to the
related Floating Rate Payer Payment Date. The
Securities Administrator shall make available each
month via the Securities Administrator's website a
statement containing the aggregate Certificate
Principal Balance of the Subordinate Certificates
as of the first day of such Calculation Period and
shall notify the Cap Provider at least five (5)
Business Days prior to the related Floating Rate
Payer Payment Date of the aggregate Certificate
Principal Balance of the Subordinate Certificates
as of the first day of such Calculation Period and
shall send such notification to the Cap Provider at
the following email addresses:
Xxxxxxx.Xxxxxxx@xxxxx.xxx and
XXXxxxxXxxxxxx@xxxxx.xxx; provided, however, that
if the Securities Administrator shall not provide
such email notification, the Cap Provider shall
rely upon the statement of Certificate Principal
Balance of the Subordinate Certificates made
available on the Securities Administrator's
website.
Any payment by the Cap Provider to the Counterparty
in excess of the amount due under this Transaction
on any Floating Rate Payer Payment Date shall be
returned by the Counterparty to the Cap Provider
promptly after notification from the Counterparty
that the Counterparty is aware of such overpayment.
Other than the return of such overpayment, neither
the Cap Provider nor the Counterparty shall incur
any penalty or liability hereunder with respect to
such overpayment.
Trade Date: September 8, 2006
Effective Date: September 28, 2006
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 3 of 15
Termination Date: March 25, 2007, subject to adjustment in accordance
with the Business Day Convention.
FIXED AMOUNT:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: September 28, 2006
Fixed Amount: [___________]
FLOATING AMOUNTS:
Floating Rate Payer: Cap Provider
Cap Rate: For each Floating Payer Period End Date the
percentage set forth in Appendix A as the Cap Rate
for such Floating Rate Payer Period End Date.
Floating Rate Payer The 25th calendar day of each month during the Term
Period End Dates: of this Transaction, commencing October 25, 2006,
and ending on the Termination Date, subject to
adjustment in accordance with the Business Day
Convention.
Floating Rate Payer Early Payment shall be applicable. The Floating
Payment Dates: Rate Payer Payment Date shall be two (2) Business
Days prior to each Floating Rate Payer Period End
Date.
Floating Rate Option: USD-LIBOR-BBA; provided, however, if the Floating
Rate Option for any Calculation Period is greater
than 8.970% then the Floating Rate Option for such
Calculation Period shall be deemed to be 8.970%.
Floating Amount To be determined in accordance with the following
formula: the greater of (i) (Floating Rate Option -
Cap Rate) * Notional Amount * Floating Rate Day
Count Fraction and (ii) zero.
Designated Maturity: One month.
Floating Rate Day Count
Fraction: Actual/360
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 4 of 15
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Business Day Convention: Modified Following
Calculation Agent: Cap Provider
3. Additional Provisions:
Each party hereto is hereby advised and acknowledges that the other party
has engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into the Transaction
being entered into on the terms and conditions set forth herein and in the
Confirmation relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
a) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
b) Termination Provisions. For purposes of the Master Agreement:
(i) "Specified Entity" is not applicable to Cap Provider or
Counterparty for any purpose.
(ii) "Specified Transaction" is not applicable to Cap Provider or
Counterparty for any purpose, and, accordingly, Section 5(a)(v)
of the ISDA Form Master Agreement shall not apply to Cap Provider
or Counterparty.
(iii) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA
Form Master Agreement will not apply to Counterparty.
(iv) The provisions of Section 5 (a) (ii), (iii), and (iv) of the ISDA
Form Master Agreement will not apply to Counterparty.
(v) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of
the ISDA Form Master Agreement will not apply to Cap Provider or
Counterparty.
(vi) The "Automatic Early Termination" provision of Section 6(a) of
the ISDA Form Master Agreement will not apply to Cap Provider or
to Counterparty.
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 5 of 15
(vii) Payments on Early Termination. For the purpose of Section 6(e)
of the ISDA Form Master Agreement:
(A) Market Quotation will apply.
(B) The Second Method will apply.
(viii) "Termination Currency" means United States Dollars.
c) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e) of the ISDA
Form Master Agreement, Cap Provider and Counterparty each 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) of the ISDA Form Master Agreement) 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) of the ISDA Form Master Agreement;
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement
and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of the ISDA Form Master Agreement;
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) of the ISDA Form
Master Agreement by reason of material prejudice to its legal or
commercial position.
Payee Tax Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement,
(i) Cap Provider makes no Payee Tax Representations.
Counterparty makes no Payee Tax Representations.
d) Miscellaneous.
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 6 of 15
(i) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Cap Provider:
Address: 00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Legal Department - Derivatives Documentation
Facsimile: 0-000-000-0000/2534
Phone: 0-000-000-0000/2532
With a copy to:
Address: Greenwich Capital Markets, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: 0-000-000-0000
Phone: 0-000-000-0000
Address for notices or communications to the Counterparty:
Address: LaSalle Bank National Association
Global Securities and Trust Services
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Client Manager - MLMI 2006-HE5
Facsimile: (000) 000-0000
Phone: (000) 000-0000
(ii) Process Agent. For the purpose of Section 13(c) of the ISDA Form
Master Agreement: Not Applicable.
(iii) Offices. The provisions of Section 10(a) will apply to the ISDA
Form Master Agreement.
(iv) Multibranch Party. For the purpose of Section 10(c) of the ISDA
Form Master Agreement:
Cap Provider is a Multibranch Party.
The Counterparty is not a Multibranch Party.
(v) Credit Support Document. Not applicable for either Cap Provider
or the Counterparty.
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 7 of 15
(vi) Credit Support Provider. Not applicable for either Cap Provider
or the Counterparty.
(vii) Governing Law. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof, other than New York General Obligation Law Section
5-1401.
(viii) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(ix) 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 officers or
employees 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.
(x) Waiver of Jury Trial. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(xi) Transfer, Amendment and Assignment. Cap Provider shall not
unreasonably withhold its consent to any Assignment of this
Agreement. This Agreement shall not be transferred or amended
unless the Counterparty shall have received prior written
confirmation from each of the Rating Agencies that such amendment
or transfer will not cause such Rating Agency to downgrade or
withdraw its then-current ratings of any outstanding
Certificates.
(xii) Proceedings. Cap Provider shall not institute against or cause
any other person to institute against, or join any other person
in instituting against, Counterparty
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 8 of 15
or 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 following payment in full of the Securities.
e) Section 3 of the ISDA Form Master Agreement is hereby amended by
adding at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Subject to Paragraph 6 herein, each party represents to the other
party on each date when it enters into a Transaction that:
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement in respect of that
Transaction.
(2) Evaluation and Understanding.
(i) Each party is acting for its own account and has
made its own independent decisions to enter into this
Transaction and as to whether this Transaction is
appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into
this Transaction; it being understood that information
and explanations related to the terms and conditions of
this Transaction shall not be considered investment
advice or a recommendation to enter into this
Transaction. It has not received from the other party
any assurance or guarantee as to the expected results
of this Transaction.
(ii) It is capable of evaluating and understanding (on
its own behalf or through independent professional
advice), and understands and accepts, the terms,
conditions and risks of this Transaction. It is also
capable of assuming, and assumes, the financial and
other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or
an advisor for it in respect of this Transaction.
(3) Purpose. It is an "eligible contract participant" as
defined in Section 1(a)(12) of the Commodity Exchange Act,
as amended."
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 9 of 15
f) Additional Provisions. Notwithstanding the terms of Sections 5 and 6
of the ISDA Form Master Agreement, if Counterparty has satisfied its
payment obligations under Section 2(a)(i) of the ISDA Form Master
Agreement, then unless Cap Provider is required pursuant to
appropriate proceedings to return to Counterparty or otherwise returns
to Counterparty upon demand of Counterparty any portion of such
payment, (a) the occurrence of an event described in Section 5(a) of
the ISDA Form Master Agreement with respect to Counterparty shall not
constitute an Event of Default or Potential Event of Default with
respect to Counterparty as the Defaulting Party and (b) Cap Provider
shall be entitled to designate an Early Termination Event pursuant to
Section 6 of the ISDA Form Master Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) of the ISDA Form Master Agreement with respect to Cap
Provider as the Affected Party or Section 5(b)(iii) of the ISDA Form
Master Agreement with respect to Cap Provider as the Burdened Party.
For purposes of the Transaction to which this Agreement relates,
Counterparty's only obligation under Section 2(a)(i) of the ISDA Form
Master Agreement is to pay the Fixed Amount on the Fixed Rate Payer
Payment Date.
g) Set-off. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
h) Additional Termination Events. Additional Termination Events will
apply.
(i) If a Rating Agency Downgrade has occurred and Cap Provider has
not, within 30 days, complied with Clause i below, then an
Additional Termination Event shall have occurred with respect to
Cap Provider and Cap Provider shall be the sole Affected Party
with respect to such an Additional Termination Event.
(ii) If (A) Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI"), as
depositor under the Pooling Agreement (as defined in Paragraph 6
below) still has a reporting obligation with respect to this
Transaction pursuant to Regulation AB and (B) the Cap Provider
has not, within 30 days after receipt of a Cap Disclosure Request
complied with the provisions set forth in Paragraph 7 below
(provided that if the significance percentage reaches 10% after a
Cap Disclosure Request has been made to Cap Provider, Cap
Provider must comply with the provisions set forth in Paragraph 7
below within 10 days of Cap Provider being informed of the
significance percentage reaching 10%), then an Additional
Termination Event shall have occurred with respect to Cap
Provider and Cap Provider shall be the sole Affected Party with
respect to such Additional Termination Event.
i) Rating Agency Downgrade. If a Ratings Event (as defined below) occurs
with respect to the Cap Provider, then the Cap Provider shall, at its
own expense, (i) assign this Transaction hereunder to a third party
within thirty (30) days of such Ratings Event that meets or exceeds,
or as to which any applicable credit support provider meets or
exceeds, the Approved Ratings Thresholds (as defined below), (ii)
deliver Eligible Collateral in an amount (after taking the relevant
Valuation Percentages into account) equal to the Exposure
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 10 of 15
(as defined below), and an executed 1994 ISDA Credit Support Annex
(subject to New York law), within thirty (30) days of such Ratings
Event and if any Securities are outstanding, subject to the applicable
Rating Agencies' written confirmation that delivery of such collateral
in the context of such downgrade will not result in a withdrawal,
qualification or downgrade of the then current ratings assigned to the
Securities (such confirmation, a "RATING AGENCY CONFIRMATION"), or
(iii) any other action subject to Rating Agency Confirmation. For the
avoidance of doubt, a downgrade of the rating on the Securities could
occur in the event that the Cap Provider does not post sufficient
collateral. For purposes of this Transaction, a "RATINGS EVENT" shall
occur with respect to the Cap Provider, if its long-term unsecured and
unsubordinated debt rating ceases to be rated at least "AA-" by S&P,
and at least "Aa3" by Moody's (including in connection with a merger,
consolidation or other similar transaction by the Cap Provider) such
ratings being referred to herein as the "APPROVED RATINGS THRESHOLDS",
(unless, within 30 days after such withdrawal or downgrade, the
applicable Rating Agencies have reconfirmed the rating of the
Securities, as applicable, which was in effect immediately prior to
such withdrawal or downgrade). Notwithstanding the foregoing, in the
event that the Cap Provider's long-term unsecured and unsubordinated
debt rating is either (i) withdrawn or (ii) reduced below "BBB-" by
S&P or "A2" by Moody's, or its unsecured, short-term debt obligation
is reduced below "A-3" by S&P, then the Cap Provider shall, within ten
(10) days of such reductions, at its own expense, and subject to
Rating Agency Confirmation, (i) secure another entity to replace the
Cap Provider as party to this Agreement that meets or exceeds the
Approved Rating Thresholds on terms substantially similar to this
Agreement, (ii) obtain a guaranty acceptable to the Rating Agencies of
another person with the Approved Rating Thresholds to honor the Cap
Provider's obligations under this Agreement, or (iii) take any other
action subject to Rating Agency Confirmation. Failure to satisfy the
foregoing shall constitute an Additional Termination Event as defined
by Section 5(b)(v) of the ISDA Form Master Agreement, with the Cap
Provider as the sole Affected Party. Notwithstanding any of the above
downgrades, unless and until the Cap Provider transfers the
Transaction to a replacement counterparty pursuant to the foregoing,
the Cap Provider will continue to perform its obligations under the
Transaction. The Cap Provider's failure to comply with the above
downgrade provisions and requirements shall constitute the sole
Additional Termination Events as defined in Section 5(b)(v) of the
ISDA Form Master Agreement. Only with respect to such Ratings Event,
"EXPOSURE" shall mean the following: (i) the xxxx-to-market value of
the Transaction as of the Valuation Date as such term is defined in
the 1994 ISDA Credit Support Annex (subject to New York law). The
provisions of Paragraph 6(c) shall apply to Counterparty. In the event
that the parties hereto execute a 1994 ISDA Credit Support Annex upon
the occurrence of a Ratings Event, Cap Provider shall request its
legal counsel to deliver to Counterparty an opinion as to the
enforceability of the Agreement and the 1994 ISDA Credit Support Annex
(provided that each of S&P and Moody's shall be permitted to receive a
copy of such opinion for the purposes of information only and the Cap
Provider's legal counsel shall not have any liability to S&P, Moody's
or any person other than the Counterparty in relation to the contents
of such opinion).
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 11 of 15
5. Account Details and PAYMENTS TO CAP PROVIDER:
Settlement Information: X.X. Xxxxxx Chase Bank, New York
Agent Swift Address: XXXXXX00
ABA#: 000000000
Beneficiary: The Royal Bank of Scotland plc
Account #400930153
PAYMENTS TO COUNTERPARTY:
ABA#: 071 000 505
Account #: 724111.3
Re: MLMI 2006-HE5
6. Limitation of Liability of Securities Administrator
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by LaSalle Bank National Association
not individually but solely as securities administrator (the "SECURITIES
ADMINISTRATOR") on behalf of Citibank, N.A. as trustee (the "TRUSTEE") of
the Trust, in the exercise of the powers and authority conferred upon and
vested in it under the Pooling and Servicing Agreement dated as of
September 1, 2006, by and among the Trustee, as trustee, MLMI, as depositor
(the "DEPOSITOR"), LaSalle Bank, as master servicer (the "MASTER SERVICER")
and Securities Administrator and Wilshire Credit Corporation, as a servicer
and IndyMac Bank, F.S.B., as a servicer (the "POOLING AGREEMENT") and
pursuant to instructions set forth therein, and that the Securities
Administrator shall perform its duties and obligations hereunder in
accordance with the standard of care set forth in the Pooling Agreement,
(b) each of the representations, undertakings and agreements herein is made
and intended not as a personal representation, undertaking or agreement of
the Securities Administrator but is made and intended for the purpose of
binding only the Trust, and (c) under no circumstances shall the Securities
Administrator be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust herein; provided that nothing in this paragraph shall relieve the
Securities Administrator from performing its duties and obligations
hereunder in accordance with the standard of care set forth in the Pooling
Agreement.
7. Compliance with Regulation AB
a) The Cap Provider acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB, the
Depositor is required under Regulation AB under the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended
("REGULATION AB"), to disclose certain information set forth in
Regulation AB regarding the Cap Provider or its group of affiliated
entities, if applicable, depending on the aggregate "significance
percentage" of this Agreement and any other derivative contracts
between the Cap Provider or its group of affiliated entities,
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 12 of 15
if applicable, and the Counterparty, as calculated from time to time
in accordance with Item 1115 of Regulation AB.
b) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nine (9)
percent, then the Depositor may request on a Business Day after the
date of such determination from the Cap Provider the same information
set forth in Item 1115(b) of Regulation AB that would have been
required if the significance percentage had in fact increased to ten
(10) percent (such request, a "CAP DISCLOSURE REQUEST" and such
requested information, subject to the last sentence of this paragraph,
is the "CAP FINANCIAL DISCLOSURE"). The Depositor shall provide the
Cap Provider and the Counterparty with the calculations and any other
information reasonably requested by the Cap Provider or the
Counterparty with respect to the Depositor's determination that led to
the Cap Disclosure Request. The parties hereto further agree that the
Cap Financial Disclosure provided to meet the Cap Disclosure Request
may be, solely at the Cap Provider's option, either the information
set forth in Item 1115(b)(1) or Item 1115(b)(2) of Regulation AB.
c) Upon the occurrence of a Cap Disclosure Request, the Cap Provider, at
its own expense, shall (i) provide the Depositor with the Cap
Financial Disclosure, (ii) subject to Rating Agency Confirmation,
secure another entity to replace the Cap Provider as party to this
Agreement on terms substantially similar to this Agreement which
entity is able to provide the Cap Financial Disclosure or (iii)
subject to Rating Agency Confirmation, obtain a guaranty of the Cap
Provider's obligations under this Agreement from an affiliate of the
Cap Provider that is able to provide with the Cap Financial
Disclosure, such that disclosure provided in respect of the affiliate
will satisfy any disclosure requirements applicable to the Cap
Provider, and cause such affiliate to provide Cap Financial
Disclosure. If permitted by Regulation AB, any required Cap Financial
Disclosure may be provided by incorporation by reference from reports
filed pursuant to the Securities Exchange Act. For purposes of clause
(ii) above, the parties agree that National Westminster Bank Plc
("NATWEST") shall be an acceptable replacement for the Cap Provider,
so long as NatWest is able to provide suitable Cap Financial
Disclosure.
8. MLML Shall Not Benefit
The parties hereto agree and acknowledge that amounts paid hereunder are
not intended to benefit the holder of any class of certificates rated by
any rating agency if such holder is MLML or any of its affiliates. If MLML
or any of its affiliates receives any such amounts, it will promptly remit
(or, if such amounts are received by an affiliate of MLML, MLML hereby
agrees that it will cause such affiliate to promptly remit) such amounts to
the Securities Administrator, whereupon the Securities Administrator will
promptly remit such amounts to the Cap Provider.
9. In the event that the transaction to which the Pooling Agreement relates
does not occur, and the Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-HE5 is not formed, the Cap
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 13 of 15
Provider and MLML agree that MLML shall become the Cap Counterparty under
this Agreement.
10. Agency Role of Greenwich Capital Markets, Inc.
This Transaction has been entered into by Greenwich Capital Markets, Inc.,
as agent for the Cap Provider. Greenwich Capital Markets, Inc. has not
guaranteed and is not otherwise responsible for the obligations of the Cap
Provider under this Transaction.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 14 of 15
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE ROYAL BANK OF SCOTLAND PLC
BY: GREENWICH CAPITAL MARKETS, INC.,
ITS AGENT
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
SECURITIES ADMINISTRATOR OF XXXXXXX XXXXX MORTGAGE INVESTORS TRUST, SERIES
2006-HE5
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraphs 8 and 9,
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Reference Number: IRG16082453
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 15 of 15
APPENDIX A
(all such dates subject to adjustment in accordance with the Business Day
Convention)
From and including To but excluding Notional Amount (USD) Cap Rate (%)
------------------ ---------------- --------------------- ------------
9/28/2006 10/25/2006 246,359,000 7.976
10/25/2006 11/25/2006 246,359,000 6.879
11/25/2006 12/25/2006 246,359,000 7.126
12/25/2006 1/25/2007 246,359,000 6.879
1/25/2007 2/25/2007 246,359,000 6.88
2/25/2007 3/25/2007 246,359,000 7.674
EXHIBIT N-1
CLASS A-1 ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 09/28/06 10/25/06 169,018,000 8.583 10.850
2 10/25/06 11/25/06 166,857,355 7.456 10.850
3 11/25/06 12/25/06 164,232,026 7.710 10.850
4 12/25/06 01/25/07 161,147,335 7.457 10.850
5 01/25/07 02/25/07 157,610,822 7.457 10.850
6 02/25/07 03/25/07 153,631,942 8.273 10.850
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 10.850%)
exceeds the Lower Collar, the Issuing Entity will receive payments pursuant
to the Class A-1 Cap Contract.
N-1-1
EXHIBIT N-2
CLASS A-2 ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 09/28/06 10/25/06 903,126,000 8.324 10.200
2 10/25/06 11/25/06 893,538,187 7.232 10.200
3 11/25/06 12/25/06 881,459,437 7.478 10.200
4 12/25/06 01/25/07 866,901,784 7.232 10.200
5 01/25/07 02/25/07 849,891,133 7.233 10.200
6 02/25/07 03/25/07 830,469,155 8.023 10.200
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 10.200%)
exceeds the Lower Collar, the Issuing Entity will receive payments pursuant
to the Class A-2 Cap Contract.
N-2-1
EXHIBIT N-3
SUBORDINATE CERTIFICATES ONE-MONTH LIBOR CAP TABLE (1)
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 09/28/06 10/25/06 246,359,000 7.976 8.970
2 10/25/06 11/25/06 246,359,000 6.879 8.970
3 11/25/06 12/25/06 246,359,000 7.126 8.970
4 12/25/06 01/25/07 246,359,000 6.879 8.970
5 01/25/07 02/25/07 246,359,000 6.880 8.970
6 02/25/07 03/25/07 246,359,000 7.674 8.970
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 8.970%) exceeds
the Lower Collar, the Issuing Entity will receive payments pursuant to the
Subordinate Certificates Cap Contract.
N-3-1
EXHIBIT O
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER TO REGULATION S BOOK-ENTRY CERTIFICATE
FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
In connection with our disposition of the Class ___ Certificates which
are held in the form of Definitive Certificates or in the form of a beneficial
interest in a Rule 144A Book-Entry Certificate and to effect the transfer
pursuant to Regulation S under the Securities Act of 1933, as amended
("Regulation S") of the above Certificates in exchange for an equivalent
beneficial interest in a Regulation S Book-Entry Certificate, we hereby certify
that such transfer has been effected in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
September 1, 2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as Depositor,
LaSalle Bank National Association, as Master Servicer and Securities
Administrator, Citibank, N.A., as Trustee, Wilshire Credit Corporation, as a
Servicer, IndyMac Bank, N.A., as a Servicer, and in the Certificates and (ii) in
accordance with Regulation S, and that:
a. the offer of the Certificates was not made to a person in the
United States;
b. at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
c. no directed selling efforts have been made in contravention of the
requirements of Rule 903 or 904 of Regulation S, as applicable;
d. the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933, as
amended; and
e. the transferee is not a U.S. Person (as defined by Regulation S).
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
O-1
Very truly yours,
Print Name of Transferor
By
-------------------------------------
Authorized Officer
O-2
EXHIBIT P
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER PURSUANT TO RULE 144A FROM A HOLDER OF
A REGULATION S BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
Ladies and Gentlemen:
In connection with our disposition of the Class __ Certificates which
are held in the form of Definitive Certificates or in the form of a beneficial
interest in a Regulation S Book-Entry Certificate and to effect the transfer
pursuant to Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
of the above Certificates in exchange for an equivalent beneficial interest in a
Rule 144A Book-Entry Certificate or a Definitive Note, we hereby certify that
such Certificates are being transferred in accordance with (i) the transfer
restrictions set forth in the Pooling and Servicing Agreement, dated as of
September 1, 2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as Depositor,
LaSalle Bank National Association, as Master Servicer and Securities
Administrator, Citibank, N.A., as Trustee, Wilshire Credit Corporation, as a
Servicer, IndyMac Bank, N.A., as a Servicer, and in the Certificates and (ii)
Rule 144A under the Securities Act of 1933, as amended, to a transferee that we
reasonably believe is purchasing the Certificates for its own account or an
account with respect to which the transferee exercises sole investment
discretion, the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable securities laws
of any state of the United States or any other jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal Proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
Print Name of Transferor
By:
------------------------------------
Authorized Officer
P-1
EXHIBIT Q
FORM OF SWAP AGREEMENT
EXECUTION COPY
(RBS LOGO)
The Royal Bank of Scotland
DATE: September 28, 2006
TO: LaSalle Bank National Association, not in its individual
capacity, but solely as Securities Administrator for the
Supplemental Interest Trust (the "SUPPLEMENTAL INTEREST
TRUST") with respect to Xxxxxxx Xxxxx Mortgage Investors
Trust, Series 2006-HE5
ATTENTION: Xxxxx X. Xxxxxxxxx-Xxxxxx, Global Securities and Trust
Services
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
TO: Xxxxxxx Xxxxx Mortgage Lending, Inc.
ATTENTION: Xxxx X'Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: The Royal Bank of Scotland plc
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER(S): D16082263
The purpose of this letter agreement ("AGREEMENT") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between The Royal Bank of Scotland plc ("PARTY A"), LaSalle
Bank National Association, not in its individual capacity, but solely as
Securities Administrator ("PARTY B") for the Supplemental Interest Trust with
respect to the Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5 (the
"ISSUING ENTITY") and, solely with respect to Paragraphs 8 and 9, Xxxxxxx Xxxxx
Mortgage Lending, Inc. ("MLML"). This Agreement, which evidences a complete and
binding agreement between you and us to enter into the Transaction on the terms
set forth below, constitutes a "Confirmation" as referred to in the "ISDA Form
Master Agreement" (as defined below), as well as a "Schedule" as referred to in
the ISDA Form Master Agreement.
Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings assigned to them (or incorporated by reference) in the Pooling and
Servicing Agreement dated as of September 1, 2006, by and among LaSalle Bank,
National Association, as securities administrator (the "SECURITIES
ADMINISTRATOR"), Citibank, N.A., as trustee (the "TRUSTEE"), MLMI, as depositor
(the "DEPOSITOR"), LaSalle Bank, National Association, as master servicer (the
"MASTER SERVICER"), Wilshire Credit Corporation, as a servicer and IndyMac Bank,
F.S.B, as a servicer (the "POOLING AGREEMENT").
Q-1
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 2 of 18
1. This Agreement is subject to the 2000 ISDA Definitions (the "DEFINITIONS"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement and in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA FORM MASTER AGREEMENT"), an ISDA Form Master Agreement
shall be deemed to have been executed by you and us on the date we entered into
the Transaction. In the event of any inconsistency between the provisions of
this Agreement and the Definitions or the ISDA Form Master Agreement, this
Agreement shall prevail for purposes of the Transaction. For the avoidance of
doubt, this Agreement is intended to be a stand alone agreement and is therefore
not subject to any ISDA Master Agreement actually executed and existing between
the parties hereto.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Swap
Notional Amount: With respect to any Calculation
Period, the amount set forth in
Appendix A attached hereto.
Trade Date: September 8, 2006
Effective Date: September 28, 2006
Termination Date: November 25, 2010
FIXED AMOUNT:
Fixed Rate Payer: Party B
Fixed Rate Payer Period The 25th calendar day of each month
End Dates: during the Term of this Transaction,
commencing April 25, 2007, and ending
on the Termination Date, subject to no
adjustment.
Fixed Rate Payer Payment Dates: Early Payment shall be applicable. The
Fixed Rate Payer Payment Date shall be
two (2) Business Days prior to each
Fixed Rate Payer Period End Date.
Fixed Amounts: The Fixed Amount payable by Party B
shall be an amount equal to (i) the
Notional Amount for such Fixed Rate
Payer Payment Date * (ii) the Fixed
Rate * (iii) the Fixed Rate Day Count
Fraction.
Fixed Rate: 5.22%
Fixed Rate Day Count 30/360
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 3 of 18
Fraction:
FLOATING AMOUNTS:
Floating Rate Payer: Party A
Floating Rate Payer Period End The 25th calendar day of each month
Dates: during the Term of this Transaction,
commencing April 25, 2007, and ending
on the Termination Date, subject to
adjustment in accordance with the
Business Day Convention.
Floating Rate Payer Payment Early Payment shall be applicable. The
Dates: Floating Rate Payer Payment Date shall
be two (2) Business Days prior to each
Floating Rate Payer Period End Date.
Floating Amount The Floating Amount payable by Party A
shall be an amount equal to (i) the
Notional Amount for such Floating Rate
Payer Payment Date * (ii) the Floating
Rate * (iii) the Floating Rate Day
Count Fraction.
Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: One month.
Floating Rate Day Count
Fraction: Actual/360
Additional Floating Amount: USD 1,768,000, payable on the
Effective Date to Xxxxxxx Xxxxx
Mortgage Lending, Inc.
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable
Business Days: New York
Business Day Convention: Modified Following
Calculation Agent: Party A
3. Additional Provisions:
Each party hereto is hereby advised and acknowledges that the other party
has engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 4 of 18
the Transaction being entered into on the terms and conditions set forth
herein and in the Confirmation relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
a) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
b) Termination Provisions. For purposes of the Master Agreement:
(i) "Specified Entity" is not applicable to Party A or Party B for
any purpose.
(ii) Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A
and Party B; provided, however, that the reference to "third
Local Business Day" shall be amended to be "second Local Business
Day".
(iii) Section 5(a)(ii) (Breach of Agreement) will not apply to Party A
or Party B.
(iv) Section 5(a)(iii) (Credit Support Default) will apply to Party A
and will not apply to Party B.
(v) Section 5(a)(iv) (Misrepresentation) will not apply to Party A or
Party B.
(vi) "Specified Transaction" is not applicable to Party A or Party B
for any purpose, and, accordingly Section 5(a)(v) (Default under
Specified Transaction) will not apply to Party A or Party B.
(vii) Section 5(a)(vi) (Cross Default) will not apply to Party A or
Party B.
(viii) Section 5(a)(vii) (Bankruptcy) will apply to Party A and will
not apply to Party B.
(ix) Section 5(a)(viii) (Merger without Assumption) will apply to
Party A and will not apply to Party B.
(x) Section 5(b)(iv) (Credit Event upon Merger) will not apply to
Party A or Party B.
(xi) The "Automatic Early Termination" provision of Section 6(a) of
the ISDA Form Master Agreement will not apply to Party A or Party
B.
(xii) Payments on Early Termination. For the purpose of Section 6(e)
of the ISDA Form Master Agreement:
(A) Market Quotation will apply.
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 5 of 18
(B) The Second Method will apply.
(xiii) "Termination Currency" means United States Dollars.
c) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e) of the ISDA
Form Master Agreement, Party A and Party B each 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) of the ISDA Form Master Agreement) 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) of the ISDA Form Master Agreement;
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement
and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of the ISDA Form Master Agreement;
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) of the ISDA Form
Master Agreement by reason of material prejudice to its legal or
commercial position.
Payee Tax Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement,
(i) Party A represents that
(a) it is a tax resident of the United Kingdom;
(b) it is a "foreign person" within the meaning of the applicable
U.S. Treasury Regulations concerning information reporting and
backup withholding tax (as in effect on January 1, 2001), unless
Party A provides written notice to Party B that it is no longer a
foreign person;
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 6 of 18
(c) in respect of each Transaction it enters into through an
office or discretionary agent in the United States or which
otherwise is allocated (in whole or part) for United States
federal income tax purposes to such United States trade or
business, each payment received or to be received by it under
such Transaction (or portion thereof, if applicable) will be
effectively connected with its conduct of a trade or business in
the United States; and
(d) in respect of all other Transactions or portions thereof, no
such payment received or to be received by it in connection with
this Agreement is attributable to a trade or business carried on
by it through a permanent establishment in the United States.
Party B represents that
(a) it is the Securities Administrator for the Supplemental
Interest Trust;
(b) it is a national banking association and not a foreign
corporation for United States tax purposes; and
(c) the Supplemental Interest Trust is a New York common law
trust and not a foreign trust for United States tax purposes.
d) Documents to be delivered. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED
TO DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
------------------- --------------------------------------------- ----------------------------------
Party A and Party B Any form or document required or reasonably Promptly upon reasonable demand by
requested to allow the other party to make the other party.
payments under the Agreement without any
deduction or withholding for or on account of
any Tax, or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered are:
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 7 of 18
PARTY REQUIRED
TO DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
------------------- ---------------------------------------------- -----------------------------------
Party B Certified copy of the Board of Directors Concurrently with the execution and
resolution (or equivalent authorizing delivery of this Agreement.
documentation) which sets forth the authority
of each signatory to this Agreement and each
Credit Support Document (if any) signing on
its behalf and the authority of such party to
enter into Transactions contemplated and
performance of its obligations hereunder.
Party A and Party B Incumbency Certificate (or, if available the Concurrently with the execution and
current authorized signature book or delivery of this Agreement unless
equivalent authorizing documentation) previously delivered and still in
specifying the names, titles, authority and full force and effect.
specimen signatures of the persons authorized
to execute this Agreement which sets forth the
specimen signatures of each signatory to this
Agreement.
Party B An executed copy of the Pooling Agreement. Within 30 days after the date of
this Agreement.
Party B Opinions of counsel of Party B reasonably Concurrently with the execution and
satisfactory to Party A. delivery of the Confirmation.
e) Miscellaneous.
(i) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: 00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Legal Department - Derivatives Documentation
Facsimile: 0-000-000-0000/2534
Phone: 0-000-000-0000/2532
With a copy to:
Address: Greenwich Capital Markets, Inc.
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 8 of 18
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: 0-000-000-0000
Phone: 0-000-000-0000
Address for notices or communications to Party B:
Address: LaSalle Bank National Association
Global Securities and Trust Services
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Client Manager - MLMI 2006-HE5
Facsimile: (000) 000-0000
Phone: (000) 000-0000
(ii) Process Agent. For the purpose of Section 13(c) of the ISDA Form
Master Agreement: Not Applicable.
(iii) Offices. The provisions of Section 10(a) will apply to the ISDA
Form Master Agreement.
(iv) Multibranch Party. For the purpose of Section 10(c) of the ISDA
Form Master Agreement:
Party A is a Multibranch Party.
Party B is not a Multibranch Party.
(v) Credit Support Document. Not applicable for either Party A or
Party B.
(vi) Credit Support Provider. Not applicable for either Party A or
Party B.
(vii) Governing Law. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole, without regard to conflict of law provisions
thereof, other than New York General Obligation Law Section
5-1401.
(viii) 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
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 9 of 18
parties as to the subject matter of this Agreement and the
deletion of such portion of this Agreement will not substantially
impair the respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(ix) 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 officers or
employees 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.
(x) Waiver of Jury Trial. Each party waives any right it may have to
a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(xi) Proceedings. Party A shall not institute against or cause any
other person to institute against, or join any other person in
instituting against, Party B or 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 following payment in full of
the Securities.
f) Section 3 of the ISDA Form Master Agreement is hereby amended by
adding at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Subject to Paragraph 6 herein, each party represents to the other
party on each date when it enters into a Transaction that:
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement in respect of that Transaction.
(2) Evaluation and Understanding.
(i) Each party is acting for its own account and has made
its own independent decisions to enter into this Transaction
and as to whether this Transaction is appropriate or proper
for it based upon
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 10 of 18
its own judgment and upon advice from such advisors as it
has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or
as a recommendation to enter into this Transaction; it being
understood that information and explanations related to the
terms and conditions of this Transaction shall not be
considered investment advice or a recommendation to enter
into this Transaction. It has not received from the other
party any assurance or guarantee as to the expected results
of this Transaction.
(ii) It is capable of evaluating and understanding (on its
own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of
this Transaction. It is also capable of assuming, and
assumes, the financial and other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.
(3) Purpose. It is an "eligible contract participant" as defined
in Section 1(a)(12) of the Commodity Exchange Act, as amended."
h) Set-off. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
i) Additional Termination Events. 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) A Rating Agency Downgrade has occurred and Party A has not,
within 30 days, complied with Clause j below. Party A shall be
the sole Affected Party with respect to such an Additional
Termination Event.
(ii) (A) Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI"), as depositor
under the Pooling Agreement still has a reporting obligation with
respect to this Transaction pursuant to Regulation AB and (B)
Party A has not, within 30 days after receipt of a Swap
Disclosure Request complied with the provisions set forth in
Paragraph 7 below (provided that if the "significance percentage"
reaches 10% after a Swap Disclosure Request has been made to
Party A, Party A must comply with the provisions set forth in
Paragraph 7 below within 10 days of Party A being informed of the
significance percentage reaching 10%). Party A shall be the sole
Affected Party with respect to such Additional Termination Event.
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 11 of 18
(iii) The Supplemental Interest Trust or the Trust Fund is terminated
pursuant to the Pooling Agreement.
(iv) The Pooling Agreement is amended or modified without the prior
written consent of Party A, where such consent is required under
the terms of the Pooling Agreement.
(v) Party B, as securities administrator under the Pooling Agreement
gives notice of any termination of the Trust Fund under Section
9.02 of the Pooling Agreement to Certificateholders.
Notwithstanding the provisions of section 6(b)(iv) of the ISDA
Form Master Agreement, either Party A or Party B may designate an
Early Termination Date in respect of this Additional Termination
Event.
j) Rating Agency Downgrade. If a Ratings Event (as defined below) occurs
with respect to Party A, then Party A shall, at its own expense, (i)
assign this Transaction hereunder to a third party within thirty (30)
days of such Ratings Event that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved
Ratings Thresholds (as defined below), (ii) deliver Eligible
Collateral in an amount (after taking the relevant Valuation
Percentages into account) equal to the Exposure (as defined below),
and an executed 1994 ISDA Credit Support Annex (subject to New York
law), within thirty (30) days of such Ratings Event and if any
Securities are outstanding, subject to the applicable Rating Agencies'
written confirmation that delivery of such collateral in the context
of such downgrade will not result in a withdrawal, qualification or
downgrade of the then current ratings assigned to the Securities (such
confirmation, a "RATING AGENCY CONFIRMATION"), or (iii) any other
action subject to Rating Agency Confirmation. For the avoidance of
doubt, a downgrade of the rating on the Securities could occur in the
event that Party A does not post sufficient collateral. For purposes
of this Transaction, a "RATINGS EVENT" shall occur with respect to
Party A, if its long-term unsecured and unsubordinated debt rating
ceases to be rated at least "AA-" by S&P, and at least "Aa3" by
Moody's (including in connection with a merger, consolidation or other
similar transaction by Party A) such ratings being referred to herein
as the "APPROVED RATINGS THRESHOLDS", (unless, within 30 days after
such withdrawal or downgrade, the applicable Rating Agencies have
reconfirmed the rating of the Securities, as applicable, which was in
effect immediately prior to such withdrawal or downgrade).
Notwithstanding the foregoing, in the event that Party A's long-term
unsecured and unsubordinated debt rating is either (i) withdrawn or
(ii) reduced below "BBB-" by S&P or "A2" by Moody's, or its unsecured,
short-term debt obligation is reduced below "A-3" by S&P, then Party A
shall, within ten (10) days of such reductions, at its own expense,
and subject to Rating Agency Confirmation, (i) secure another entity
to replace Party A as party to this Agreement that meets or exceeds
the Approved Rating Thresholds on terms substantially similar to this
Agreement, (ii) obtain a guaranty acceptable to the Rating Agencies of
another person with the Approved Rating Thresholds to honor Party A's
obligations under this Agreement, or (iii) take any other action
subject to Rating Agency Confirmation. Failure to satisfy the
foregoing shall constitute an Additional Termination
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 12 of 18
Event as defined by Section 5(b)(v) of the ISDA Form Master Agreement, with
Party A as the sole Affected Party. Notwithstanding any of the above
downgrades, unless and until Party A transfers the Transaction to a
replacement counterparty pursuant to the foregoing, Party A will continue
to perform its obligations under the Transaction. Party A's failure to
comply with the above downgrade provisions and requirements shall
constitute the sole Additional Termination Events as defined in Section
5(b)(v) of the ISDA Form Master Agreement. Only with respect to such
Ratings Event, "EXPOSURE" shall mean the following: (i) the xxxx-to-market
value of the Transaction as of the Valuation Date as such term is defined
in the 1994 ISDA Credit Support Annex (subject to New York law). The
provisions of Paragraph 6(c) shall apply to Party B. In the event that the
parties hereto execute a 1994 ISDA Credit Support Annex upon the occurrence
of a Ratings Event, Party A shall request its legal counsel to deliver to
Party B an opinion as to the enforceability of the Agreement and the 1994
ISDA Credit Support Annex (provided that each of S&P and Moody's shall be
permitted to receive a copy of such opinion for the purposes of information
only and Party A's legal counsel shall not have any liability to S&P,
Moody's or any person other than Party B in relation to the contents of
such opinion).
5. Account Details and Settlement PAYMENTS TO PARTY A:
Information: X.X. Xxxxxx Xxxxx Bank, New York
Agent Swift Address: XXXXXX00
ABA#: 000000000
Beneficiary: The Royal Bank of Scotland
plc
Account #400930153
PAYMENTS TO PARTY B:
LaSalle Bank National Association
ABA#: 071 000 505
Account #: 724111.2
Re: MLMI 2006-HE5
PAYMENTS TO XXXXXXX XXXXX MORTGAGE
LENDING, INC.
Deutsche Bank NY NY
Ac# 00854209
Xxxxxxx Xxxxx Mortgage Lending Inc.
Ref: Subprime
ABA# 000000000
6. Limitation of Liability of Securities Administrator
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by LaSalle Bank National Association
not individually but solely as Securities Administrator on behalf of
Citibank, N.A., as Trustee of the Supplemental Interest Trust and the
Issuing Entity, in the exercise of the powers and authority conferred upon
and vested in it under the Pooling Agreement and pursuant to instructions
set forth
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 13 of 18
therein, and that the Securities Administrator shall perform its duties and
obligations hereunder in accordance with the standard of care set forth in
the Pooling Agreement, (b) each of the representations, undertakings and
agreements herein is made and intended not as a personal representation,
undertaking or agreement of the Securities Administrator but is made and
intended for the purpose of binding only the Supplemental Interest Trust,
and (c) under no circumstances shall the Securities Administrator be
personally liable for the payment of any indebtedness or expenses of the
Trust Fund or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust Fund
herein; provided that nothing in this paragraph shall relieve the
Securities Administrator from performing its duties and obligations
hereunder in accordance with the standard of care set forth in the Pooling
Agreement.
7. Compliance with Regulation AB
a) Party A acknowledges that for so long as there are reporting obligations
with respect to this Transaction under Regulation AB, the Depositor is
required under Regulation AB under the Securities Act of 1933, as amended,
and the Securities Exchange Act of 1934, as amended ("REGULATION AB"), to
disclose certain information set forth in Regulation AB regarding Party A
or its group of affiliated entities, if applicable, depending on the
aggregate "significance percentage" of this Agreement and any other
derivative contracts between Party A or its group of affiliated entities,
if applicable, and Party B, as calculated from time to time in accordance
with Item 1115 of Regulation AB.
b) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nine (9)
percent, then the Depositor may request on a Business Day after the date of
such determination from Party A the same information set forth in Item
1115(b) of Regulation AB that would have been required if the significance
percentage had in fact increased to ten (10) percent (such request, a "SWAP
DISCLOSURE REQUEST" and such requested information, subject to the last
sentence of this paragraph, is the "SWAP FINANCIAL DISCLOSURE"). Party B or
the Depositor shall provide Party A with the calculations and any other
information reasonably requested by Party A with respect to the Depositor's
determination that led to the Swap Disclosure Request. The parties hereto
further agree that the Swap Financial Disclosure provided to meet the Swap
Disclosure Request may be, solely at Party A's option, either the
information set forth in Item 1115(b)(1) or Item 1115(b)(2) of Regulation
AB.
c) Upon the occurrence of a Swap Disclosure Request, Party A, at its own
expense, shall (i) provide the Depositor with the Swap Financial
Disclosure, (ii) subject to Rating Agency Confirmation, secure another
entity to replace Party A as party to this Agreement on terms substantially
similar to this Agreement which entity is able to provide the Swap
Financial Disclosure or (iii) subject to Rating Agency Confirmation, obtain
a guaranty of Party A's obligations under this Agreement from an affiliate
of Party A that is able to provide with the Swap Financial Disclosure, such
that disclosure provided in respect of
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 14 of 18
the affiliate will satisfy any disclosure requirements applicable to Party
A, and cause such affiliate to provide Swap Financial Disclosure. If
permitted by Regulation AB, any required Swap Financial Disclosure may be
provided by incorporation by reference from reports filed pursuant to the
Securities Exchange Act. For purposes of clause (ii) above, the parties
agree that National Westminster Bank Plc ("NATWEST") shall be an acceptable
replacement for Party A, so long as NatWest is able to provide suitable
Swap Financial Disclosure.
8. MLML Shall Not Benefit
The parties hereto agree and acknowledge that amounts paid hereunder are
not intended to benefit the holder of any class of certificates rated by
any rating agency if such holder is MLML or any of its affiliates. If MLML
or any of its affiliates receives any such amounts, it will promptly remit
(or, if such amounts are received by an affiliate of MLML, MLML hereby
agrees that it will cause such affiliate to promptly remit) such amounts to
the Securities Administrator, whereupon the Securities Administrator will
promptly remit such amounts to Party A.
9. In the event that the transaction to which the Pooling Agreement relates
does not occur, and the Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-HE5 is not formed, Party A and MLML agree that MLML shall become Party
B under this Agreement.
10. Transfer.
Neither Party A nor Party B is permitted to amend, assign, novate or
transfer (whether by way of security or otherwise) as a whole or in part
any of its rights, obligations or interests under this Agreement or any
Transaction without the prior written consent of the other party; provided,
however, that (i) Party A may make such a transfer or assignment of this
Agreement pursuant to a consolidation or amalgamation with, or merger with
or into, or transfer of substantially all of its assets to, another entity,
or an incorporation, reincorporation or reconstitution, and (ii) Party A
may transfer or assign this Agreement to any Person, including, without
limitation, another of Party A's offices, branches or affiliates (any such
Person, office, branch or affiliate, a "TRANSFEREE") on at least five
Business Days' prior written notice to Party B; provided that, with respect
to clause (ii), (A) as of the date of such transfer the Transferee will not
be required to withhold or deduct on account of a Tax from any payments
under this Agreement unless the Transferee will be required to make
payments of additional amounts pursuant to Section 2(d)(i)(4) of the ISDA
Form Master Agreement in respect of such Tax (B) a Termination Event or
Event of Default does not occur under this Agreement as a result of such
transfer; (C) such notice is accompanied by a written instrument pursuant
to which the Transferee acquires and assumes the rights and obligations of
Party A so transferred; and (D) Party A will be responsible for any costs
or expenses incurred in connection with such transfer. Party B will execute
such documentation as is reasonably deemed necessary by Party A for the
effectuation of any such transfer. Notwithstanding the
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 15 of 18
foregoing, no transfer by either party shall be made unless the
transferring party obtains a written acknowledgment from each of the Rating
Agencies that, notwithstanding such transfer, the then-current ratings of
the Certificates will not be reduced or withdrawn.
Except as specified otherwise in the documentation evidencing a transfer or
assignment, a transfer or assignment of all the obligations of Party A will
constitute an acceptance and assumption of such obligations (and any
related interests so transferred) by the Transferee, a novation of the
transferee in place of Party A with respect to such obligations (and any
related interests so transferred), and a release and discharge by Party B
of Party A from, and an agreement by Party B not to make any claim for
payment, liability, or otherwise against Party A with respect to, such
obligations from and after the effective date of the transfer.
11. Amendment of the Pooling Agreement.
Party B shall not amend the Pooling Agreement without Party A's prior
written consent, where such consent is required under the terms of the
Pooling Agreement.
12. Agency Role of Greenwich Capital Markets, Inc.
This Transaction has been entered into by Greenwich Capital Markets, Inc.,
as agent for Party A. Greenwich Capital Markets, Inc. has not guaranteed
and is not otherwise responsible for the obligations of Party A under this
Transaction.
13. Amendments.
This Agreement will not be amended unless Party B shall have received (i)
prior written confirmation from each of the Rating Agencies that such
amendment will not cause such Rating Agency to downgrade or withdraw its
then-current ratings of any outstanding Certificates.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 16 of 18
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE ROYAL BANK OF SCOTLAND PLC
BY: GREENWICH CAPITAL MARKETS, INC.,
ITS AGENT
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
SECURITIES ADMINISTRATOR FOR THE SUPPLEMENTAL INTEREST TRUST WITH RESPECT TO
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST, SERIES 2006-HE5
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Solely with respect to Paragraphs 8
and 9,
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 17 of 18
APPENDIX A
(all such dates subject to adjustment in accordance with the Business Day
Convention)
From and including To but excluding Notional Amount (USD)
------------------ ---------------- ---------------------
9/28/2006 10/25/2006 0
10/25/2006 11/25/2006 0
11/25/2006 12/25/2006 0
12/25/2006 1/25/2007 0
1/25/2007 2/25/2007 0
2/25/2007 3/25/2007 0
3/25/2007 4/25/2007 1,147,550,567
4/25/2007 5/25/2007 1,101,977,416
5/25/2007 6/25/2007 1,052,650,249
6/25/2007 7/25/2007 997,054,235
7/25/2007 8/25/2007 938,487,211
8/25/2007 9/25/2007 881,821,028
9/25/2007 10/25/2007 829,520,894
10/25/2007 11/25/2007 780,198,262
11/25/2007 12/25/2007 734,170,547
12/25/2007 1/25/2008 691,407,324
1/25/2008 2/25/2008 651,817,765
2/25/2008 3/25/2008 614,840,057
3/25/2008 4/25/2008 579,716,526
4/25/2008 5/25/2008 545,328,111
5/25/2008 6/25/2008 510,276,994
6/25/2008 7/25/2008 471,383,290
7/25/2008 8/25/2008 426,649,296
8/25/2008 9/25/2008 380,091,955
9/25/2008 10/25/2008 340,482,420
10/25/2008 11/25/2008 308,812,638
11/25/2008 12/25/2008 282,632,626
12/25/2008 1/25/2009 260,295,006
1/25/2009 2/25/2009 247,736,952
2/25/2009 3/25/2009 247,736,952
3/25/2009 4/25/2009 241,627,233
4/25/2009 5/25/2009 227,360,361
5/25/2009 6/25/2009 213,230,538
6/25/2009 7/25/2009 194,471,352
7/25/2009 8/25/2009 176,343,677
Reference Number: D16082263
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-HE5
September 28, 2006
Page 18 of 18
From and including To but excluding Notional Amount (USD)
------------------ ---------------- ---------------------
8/25/2009 9/25/2009 160,066,404
9/25/2009 10/25/2009 148,248,259
10/25/2009 11/25/2009 138,196,357
11/25/2009 12/25/2009 129,395,937
12/25/2009 1/25/2010 121,428,044
1/25/2010 2/25/2010 114,172,259
2/25/2010 3/25/2010 107,570,411
3/25/2010 4/25/2010 101,562,140
4/25/2010 5/25/2010 96,039,217
5/25/2010 6/25/2010 90,936,098
6/25/2010 7/25/2010 86,199,689
7/25/2010 8/25/2010 81,793,151
8/25/2010 9/25/2010 77,712,970
9/25/2010 10/25/2010 73,940,119
10/25/2010 11/25/2010 70,344,523
EXHIBIT R
FORM OF ASSESSMENT OF COMPLIANCE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
Wilshire Credit Corporation
00000 X.X. Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
IndyMac Bank, F.S.B.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard & Poor's, a division of
The XxXxxx-Xxxx Companies, Inc.
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement") dated as of
September 1, 2006 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Wilshire Credit Corporation, as a servicer, IndyMac Bank,
F.S.B., as a servicer, LaSalle Bank National Association, as master
servicer and securities administrator, and Citibank, N.A. as trustee,
relating to Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2006-HE5 (the "Issuing Entity")
For the calendar year ending December 31, [2006] or portion thereof,
[LaSalle Bank National Association, as Master Servicer] [LaSalle Bank National
Association, as Securities Administrator] [Wilshire Credit Corporation, as a
Servicer] [IndyMac Bank, F.S.B., as a Servicer] for the Issuing Entity has
complied in all material respects with the relevant Servicing Criteria in
Exhibit S of the Agreement.
R-1
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Agreement.
Date:
-------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
R-2
EXHIBIT S
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
KEY: X - obligation
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
SECURITIES
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR MASTER SERVICER SERVICERS
---------------- ------------------------------------------- ----------------- --------------- -----------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to X X X
monitor any performance or other triggers
and events of default in accordance with
the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are IF APPLICABLE FOR IF APPLICABLE IF APPLICABLE FOR
outsourced to third parties, policies and A TRANSACTION FOR A A TRANSACTION
procedures are instituted to monitor the PARTICIPANT TRANSACTION PARTICIPANT
third party's performance and compliance PARTICIPANT
with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction N/A N/A N/A
agreements to maintain a back-up servicer
for the Pool Assets are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions X
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the
amount of coverage required by and
otherwise in accordance with the terms of
the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited into X X X
the appropriate custodial bank accounts and
related bank clearing accounts no more than
two business days following receipt, or
such other number of days specified in the
transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on X X X
behalf of an obligor or to an investor are
made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding X X
collections, cash flows or distributions,
and any interest or other fees charged for
such advances, are made, reviewed and
approved as specified in the transaction
agreements.
1122(d)(2)(iv) The related accounts for the transaction, X X X
such as cash reserve accounts or accounts
established as a form of over
collateralization, are separately
maintained (e.g., with respect to
commingling of cash) as set forth in the
transaction agreements.
S-1
SECURITIES
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR MASTER SERVICER SERVICERS
---------------- ------------------------------------------- ----------------- --------------- -----------------
1122(d)(2)(v) Each custodial account is maintained at a X X
federally insured depository institution as
set forth in the transaction agreements.
For purposes of this criterion, "federally
insured depository institution" with
respect to a foreign financial institution
means a foreign financial institution that
meets the requirements of Rule 13k-1(b)(1)
of the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to X
prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly X X X
basis for all asset-backed securities
related bank accounts, including custodial
accounts and related bank clearing
accounts. These reconciliations are (A)
mathematically accurate; (B) prepared
within 30 calendar days after the bank
statement cutoff date, or such other number
of days specified in the transaction
agreements; (C) reviewed and approved by
someone other than the person who prepared
the reconciliation; and (D) contain
explanations for reconciling items. These
reconciling items are resolved within 90
calendar days of their original
identification, or such other number of
days specified in the transaction
agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be X X X
filed with the Commission, are maintained
in accordance with the transaction
agreements and applicable Commission
requirements. Specifically, such reports
(A) are prepared in accordance with
timeframes and other terms set forth in the
transaction agreements; (B) provide
information calculated in accordance with
the terms specified in the transaction
agreements; (C) are filed with the
Commission as required by its rules and
regulations; and (D) agree with investors'
or the trustee's records as to the total
unpaid principal balance and number of Pool
Assets serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and X X X
remitted in accordance with timeframes,
distribution priority and other terms set
forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are X X
posted within two business days to the
Servicer's investor records, or such other
number of days specified in the transaction
agreements.
1122(d)(3)(iv) Amounts remitted to investors per the X X X
investor reports agree with cancelled
checks, or other form of payment, or
custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is X
maintained as required by the transaction
agreements or related pool asset documents.
1122(d)(4)(ii) Pool assets and related documents are X
safeguarded as required by the transaction
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to X
the asset pool are made, reviewed and
approved in accordance with any conditions
or requirements in the transaction
agreements.
S-2
SECURITIES
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR MASTER SERVICER SERVICERS
---------------- ------------------------------------------- ----------------- --------------- -----------------
1122(d)(4)(iv) Payments on pool assets, including any X
payoffs, made in accordance with the
related pool asset documents are posted to
the Servicer's obligor records maintained
no more than two business days after
receipt, or such other number of days
specified in the transaction agreements,
and allocated to principal, interest or
other items (e.g., escrow) in accordance
with the related pool asset documents.
1122(d)(4)(v) The Servicer's records regarding the pool X
assets agree with the Servicer's records
with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status X
of an obligor's pool assets (e.g., loan
modifications or re-agings) are made,
reviewed and approved by authorized
personnel in accordance with the
transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds
in lieu of foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded in
accordance with the timeframes or other
requirements established by the transaction
agreements.
1122(d)(4)(viii) Records documenting collection efforts are X
maintained during the period a pool asset
is delinquent in accordance with the
transaction agreements. Such records are
maintained on at least a monthly basis, or
such other period specified in the
transaction agreements, and describe the
entity's activities in monitoring
delinquent pool assets including, for
example, phone calls, letters and payment
rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of X
return for pool assets with variable rates
are computed based on the related pool
asset documents.
1122(d)(4)(x) Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's pool asset documents, on at least
an annual basis, or such other period
specified in the transaction agreements;
(B) interest on such funds is paid, or
credited, to obligors in accordance with
applicable pool asset documents and state
laws; and (C) such funds are returned to
the obligor within 30 calendar days of full
repayment of the related pool assets, or
such other number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such X
as tax or insurance payments) are made on
or before the related penalty or expiration
dates, as indicated on the appropriate
bills or notices for such payments,
provided that such support has been
received by the servicer at least 30
calendar days prior to these dates, or such
other number of days specified in the
transaction agreements.
S-3
SECURITIES
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR MASTER SERVICER SERVICERS
---------------- ------------------------------------------- ----------------- --------------- -----------------
1122(d)(4)(xii) Any late payment penalties in connection X
with any payment to be made on behalf of an
obligor are paid from the Servicer's funds
and not charged to the obligor, unless the
late payment was due to the obligor's error
or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor X
are posted within two business days to the
obligor's records maintained by the
servicer, or such other number of days
specified in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and X X
uncollectible accounts are recognized and
recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, X
identified in Item 1114(a)(1) through (3)
or Item 1115 of Regulation AB, is
maintained as set forth in the transaction
agreements.
S-4
EXHIBIT T
XXXXXXXX-XXXXX CERTIFICATIONS
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-HE5
I, [identify the certifying individual], certify that:
1. I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
5. All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor or securities administrator].]
T-1
Date:
-------------------------------
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[Signature]
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[Title]
T-2
EXHIBIT U
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-HE5
Re: Pooling and Servicing Agreement (the "Agreement") dated as of September 1,
2006 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Wilshire
Credit Corporation, as a servicer, IndyMac Bank, F.S.B., as a servicer,
LaSalle Bank National Association, as master servicer and securities
administrator, Citibank N.A., as trustee, relating to Xxxxxxx Xxxxx
Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-HE5
I, [identify name of certifying individual], [title of certifying individual] of
[name of servicing company] (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the Agreement has
been made under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].
Date:
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[Servicer],
as Servicer
By:
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Name:
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Title:
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U-1
SCHEDULE X
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
ITEM 1.01- ENTRY INTO A MATERIAL All parties (excluding the Trustee)
DEFINITIVE AGREEMENT
Disclosure is required regarding entry
into or amendment of any definitive
agreement that is material to the
securitization, even if depositor is not
a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
ITEM 1.02- TERMINATION OF A MATERIAL All parties (excluding the Trustee)
DEFINITIVE AGREEMENT
Disclosure is required regarding
termination of any definitive agreement
that is material to the securitization
(other than expiration in accordance
with its terms), even if depositor is
not a party.
Examples: servicing agreement, custodial
agreement.
ITEM 1.03- BANKRUPTCY OR RECEIVERSHIP Depositor
Disclosure is required regarding the
bankruptcy or receivership, with respect
to any of the following:
- Sponsor (Seller) Depositor/Sponsor (Seller)
- Depositor Depositor
- Master Servicer Master Servicer
- Affiliated Servicer Servicer
- Other Servicer servicing 20% or Servicer
more of the pool assets at the time
of the report
- Other material servicers Servicer
- Securities Administrator Securities Administrator
- Significant Obligor Depositor
- Credit Enhancer (10% or more) Depositor
- Derivative Counterparty Depositor
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
- Custodian Custodian
ITEM 2.04- TRIGGERING EVENTS THAT Depositor
ACCELERATE OR INCREASE A DIRECT Master Servicer
FINANCIAL OBLIGATION OR AN OBLIGATION Securities Administrator
UNDER AN OFF-BALANCE SHEET ARRANGEMENT
Includes an early amortization,
performance trigger or other event,
including event of default, that would
materially alter the payment
priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other
than waterfall triggers which are
disclosed in the monthly statements to
the certificateholders.
ITEM 3.03- MATERIAL MODIFICATION TO Securities Administrator
RIGHTS OF SECURITY HOLDERS Depositor
Disclosure is required of any material
modification to documents defining the
rights of Certificateholders, including
the Pooling and Servicing Agreement.
ITEM 5.03- AMENDMENTS OF ARTICLES OF Depositor
INCORPORATION OR BYLAWS; CHANGE OF
FISCAL YEAR
Disclosure is required of any amendment
"to the governing documents of the
issuing entity".
ITEM 6.01- ABS INFORMATIONAL AND Depositor
COMPUTATIONAL MATERIAL
ITEM 6.02- CHANGE OF SERVICER OR Master Servicer/Securities
SECURITIES ADMINISTRATOR Administrator/Depositor/ Servicers
Requires disclosure of any removal,
replacement, substitution or addition of
any master servicer, affiliated
servicer, other servicer servicing 10%
or more of pool assets at time of
report, other material servicers or
trustee.
Reg AB disclosure about any new servicer Servicer/Master Servicer/Depositor
or master servicer is also required.
Reg AB disclosure about any new Master Servicer/Depositor
Securities Administrator is also
required.
ITEM 6.03- CHANGE IN CREDIT ENHANCEMENT Depositor/Securities Administrator
OR EXTERNAL SUPPORT
Covers termination of any enhancement in
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
manner other than by its terms, the
addition of an enhancement, or a
material change in the enhancement
provided. Applies to external credit
enhancements as well as derivatives.
Reg AB disclosure about any new Depositor
enhancement provider is also required.
ITEM 6.04- FAILURE TO MAKE A REQUIRED Securities Administrator
DISTRIBUTION
ITEM 6.05- SECURITIES ACT UPDATING Depositor
DISCLOSURE
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure about
the actual asset pool.
If there are any new servicers or Depositor
originators required to be disclosed
under Regulation AB as a result of the
foregoing, provide the information
called for in Items 1108 and 1110
respectively.
ITEM 7.01- REG FD DISCLOSURE Depositor
ITEM 8.01- OTHER EVENTS Depositor
Any event, with respect to which
information is not otherwise called for
in Form 8-K, that the registrant deems
of importance to certificateholders.
ITEM 9.01- FINANCIAL STATEMENTS AND Responsible party for reporting/
EXHIBITS disclosing the financial statement or
exhibit (excluding the Trustee)
SCHEDULE Y
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
ITEM 1: DISTRIBUTION AND POOL
PERFORMANCE INFORMATION
Information included in the [Monthly Master Servicer
Statement] Servicer
Securities Administrator
Any information required by 1121 which Depositor
is NOT included on the [Monthly
Statement]
ITEM 2: LEGAL PROCEEDINGS
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any
proceeding known to be contemplated by
governmental authorities:
- Issuing Entity (Trust Fund) Master Servicer, Securities
Administrator and Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other than Servicer
the Master Servicer or Securities
Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
ITEM 3: SALE OF SECURITIES AND USE OF Depositor
PROCEEDS
Information from Item 2(a) of Part II of
Form 10-Q:
With respect to any sale of securities
by the sponsor, depositor or issuing
entity, that are backed by the same
asset pool or are otherwise issued by
the issuing entity, whether or not
registered, provide the sales and use of
proceeds information in Item 701 of
Regulation S-K. Pricing information can
be omitted if securities were not
registered.
ITEM 4: DEFAULTS UPON SENIOR SECURITIES Securities Administrator
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
Information from Item 3 of Part II of
Form 10-Q:
Report the occurrence of any Event of
Default (after expiration of any grace
period and provision of any required
notice)
ITEM 5: SUBMISSION OF MATTERS TO A VOTE Securities Administrator
OF SECURITY HOLDERS
Information from Item 4 of Part II of
Form 10-Q
ITEM 6: SIGNIFICANT OBLIGORS OF POOL Depositor
ASSETS
Item 1112(b) - Significant Obligor
Financial Information*
* This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Item.
ITEM 7: SIGNIFICANT ENHANCEMENT PROVIDER
INFORMATION
Item 1114(b)(2) - Credit Enhancement
Provider Financial Information*
- Determining applicable disclosure Depositor
threshold
- Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation
by reference
Item 1115(b) - Derivative Counterparty
Financial Information*
- Determining current maximum
probable exposure Depositor
- Determining current significance
percentage Depositor
- Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation
by reference
* This information need only be
reported on the Form 10-D for the
distribution period in which
updated information is required
pursuant to the Items.
ITEM 8: OTHER INFORMATION Any party responsible for the
applicable Form 8-K
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
Disclosure item
Disclose any information required to be
reported on Form 8-K during the period
covered by the Form 10-D but not
reported
ITEM 9: EXHIBITS
Monthly Statement to Certificateholders Securities Administrator
Exhibits required by Item 601 of Depositor
Regulation S-K, such as material
agreements
SCHEDULE Z
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
ITEM 1B: UNRESOLVED STAFF COMMENTS Depositor
ITEM 9B: OTHER INFORMATION Any party responsible for disclosure
items on Form 8-K
Disclose any information required to be
reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not
reported
ITEM 15: EXHIBITS, FINANCIAL STATEMENT Securities Administrator/Servicers/Master Servicer/
SCHEDULES Depositor, as applicable
REG AB ITEM 1112(B): SIGNIFICANT
OBLIGORS OF POOL ASSETS
Significant Obligor Financial Depositor
Information*
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1114(B)(2): CREDIT
ENHANCEMENT PROVIDER FINANCIAL
INFORMATION
- Determining applicable disclosure Depositor
threshold
- Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation
by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1115(B): DERIVATIVE
COUNTERPARTY FINANCIAL INFORMATION
- Determining current maximum Depositor
probable exposure
- Determining current significance Depositor
percentage
- Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation
by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1117: LEGAL PROCEEDINGS
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any
proceeding known to be contemplated by
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
governmental authorities:
- Issuing Entity (Trust Fund) Master Servicer, Securities
Administrator and Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other than Servicer
the Master Servicer or Securities
Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
REG AB ITEM 1119: AFFILIATIONS AND
RELATIONSHIPS
Whether (a) the Sponsor (Seller), Depositor as to (a)
Depositor or Issuing Entity is an Sponsor/Seller as to (a)
affiliate of the following parties, and
(b) to the extent known and material,
any of the following parties are
affiliated with one another:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Trustee
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any "outside the Depositor as to (a)
ordinary course business arrangements" Sponsor/Seller as to (a)
other than would be obtained in an arm's
length transaction between (a) the
Sponsor (Seller), Depositor or Issuing
Entity on the one hand, and (b) any of
the following parties (or their
affiliates) on the other hand, that
exist currently or within the past two
years and that are material to a
Certificateholder's understanding of the
Certificates:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any specific Depositor as to (a)
relationships involving the transaction Sponsor/Seller as to (a)
or the pool assets between (a) the
Sponsor (Seller), Depositor or Issuing
Entity on the one hand, and (b) any of
the following parties (or their
affiliates) on the other hand, that
exist currently or within the past two
years and that are material:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material party Depositor/Sponsor
