Exhibit 99.12(a)
------------------------------------------------------------------------------
MBIA INSURANCE CORPORATION,
as Insurer
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and as Securities Administrator
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
as Seller
XXXXXX XXXXXXX CAPITAL I INC.,
as Depositor
and
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
INSURANCE AGREEMENT
Xxxxxx Xxxxxxx Capital I Inc.
Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-17XS
Mortgage Pass-Through Certificates, Series 2006-17XS
Class A-2-W and Class A-5-W Certificates
Dated as of December 1, 2006
------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 General Definitions............................................1
Section 1.02. Generic Terms..................................................4
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01 Representations, Warranties and Covenants of the Seller,
the Master Servicer and the Depositor..........................4
Section 2.02. Representations, Warranties and Covenants of Trustee and
Securities Administrator.......................................9
Section 2.03. Additional Covenants of the Insurer Relating to
Regulation AB.................................................11
ARTICLE III
THE POLICY; REIMBURSEMENT
Section 3.01. Agreement To Issue the Policy.................................13
Section 3.02. Conditions Precedent to Issuance of the Policy................13
Section 3.03. Payment of Fees and Premium...................................13
Section 3.04. Payment Procedure.............................................14
Section 3.05. Reimbursement and Additional Payment Obligation of the
Seller, the Master Servicer and the Depositor.................14
Section 3.06. Indemnification by the Seller, the Master Servicer and
the Depositor.................................................16
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of Agreement. ...........................17
Section 4.02. Waiver of Rights; Further Assurances. ........................17
Section 4.03. Obligations Absolute..........................................18
Section 4.04. Assignments; Reinsurance; Third-Party Rights..................18
Section 4.05. Liability of Insurer.............-............................19
Section 4.06. Subrogation ..................................................19
ARTICLE V
DEFAULTS; REMEDIES
Section 5.01. Defaults. ....................................................20
Section 5.02. Remedies; No Remedy Exclusive. ...............................20
Section 5.03. Waivers. .....................................................21
ARTICLE VI
MISCELLANEOUS
Section 6.01. Amendments, Changes and Modifications. .......................21
Section 6.02. Notices. .....................................................21
Section 6.03. Severability. ................................................22
Section 6.04. Governing Law. ...............................................23
Section 6.05. Consent to Jurisdiction and Venue, Etc. ......................23
Section 6.06. Consent of Insurer. ..........................................23
Section 6.07. Counterparts. ................................................23
Section 6.08. Headings. ....................................................23
Section 6.09. Waiver of Trial by Jury. .....................................23
Section 6.10. Entire Agreement. ............................................24
Section 6.11. Third Party Beneficiary. .....................................24
INSURANCE AGREEMENT
THIS INSURANCE AGREEMENT is made as of December 1, 2006 by and among
MBIA INSURANCE CORPORATION (the "Insurer"), XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer (the "Master Servicer") and as Securities
Administrator (the "Securities Administrator"), XXXXXX XXXXXXX MORTGAGE
CAPITAL INC., as Seller (the "Seller"), XXXXXX XXXXXXX CAPITAL I INC., as
Depositor (the "Depositor") and LASALLE BANK NATIONAL ASSOCIATION, solely in
its capacity as trustee under the PSA (the "Trustee").
RECITALS:
WHEREAS, the Pooling and Servicing Agreement dated as of December 1,
2006 by and among the Master Servicer, the Securities Administrator, the
Seller, the Depositor and the Trustee (the "PSA") relating to the Xxxxxx
Xxxxxxx Capital I Inc. Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-17XS Mortgage
Pass-Through Certificates, Series 2006-17XS Class A-2-W and Class A-5-W
Certificates (the "Insured Certificates") provides for, among other things,
the issuance of mortgage backed certificates, representing fractional
ownership interests in the trust estate (the "Trust") established thereby;
WHEREAS, the Depositor has requested that the Insurer issue, with
respect to the Insured Certificates, its certificate guaranty insurance policy
(the "Policy") to guarantee payment of Insured Payments (as defined in the
Policy) to the Securities Administrator on behalf of the Trustee for the
benefit of the Owners of the Insured Certificates upon such terms and
conditions as were mutually agreed upon by the parties and subject to the
terms and the conditions of the Policy;
WHEREAS, the parties hereto desire to specify the conditions precedent
to the issuance of the Policy by the Insurer and to provide for certain other
matters;
NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. The terms defined in this Article I
shall have the meanings provided herein for all purposes of this Agreement,
unless the context clearly requires otherwise, in both singular and plural
form, as appropriate. Capitalized terms used in this Agreement but not
otherwise defined herein will have the meanings assigned to such terms in the
PSA.
"Agreement" means this Insurance Agreement dated as of December 1, 2006,
including any amendments or any supplements hereto as herein permitted.
"Business Day" means any day other than (i) a Saturday or a Sunday, (ii)
a day on which the Insurer is closed or (iii) a day on which banking
institutions in New York City or in the city in which the corporate trust
office of the Securities Administrator under the PSA is located are authorized
or obligated by law or executive order to be closed.
"Commitment" means the Commitment, dated December 21, 2006 between the
Underwriter and the Insurer, relating to the Insured Certificates.
"Date of Issuance" means the date on which the Policy is issued as
specified therein.
"Event of Default" means any event of default set forth in Section 5.01
hereof.
"Financial Statements" means, with respect to the Seller, the Master
Servicer and the Depositor the balance sheets and the statements of income and
retained earnings and the notes thereto.
"Late Payment Rate" means the rate of interest publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in such prime rate of interest to be effective on the date such
change is announced by Citibank, N.A.) plus 3%. The Late Payment Rate shall be
computed on the basis of a year of 365 days calculating the actual number of
days elapsed. In no event shall the Late Payment Rate exceed the maximum rate
permissible under law applicable to this Agreement limiting interest rates.
"Liabilities" shall have the meaning ascribed to such term in Section
3.06(a) hereof.
"Material Adverse Change" means, in respect of any Person, a material
adverse change in the ability of such Person to perform its obligations under
any of the Transaction Documents.
"Moody's" means Xxxxx'x Investors Service, Inc., a Delaware corporation
and any successor thereto and, if such corporation shall for any reason no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized rating agency designated by
the Insurer.
"Offering Document" means the Prospectus dated December 1, 2006 and the
Prospectus Supplement thereto dated December 21, 2006 of the Depositor in
respect of the Insured Certificates (and any amendment or supplement thereto)
and any other offering document or termsheet in respect of the Insured
Certificates prepared by the Seller or the Depositor that makes reference to
the Policy.
"Organizational Documents" means (i) with respect to a corporation, the
articles of incorporation and the bylaws thereof and (ii) with respect to a
limited liability company, the certificate of formation and limited liability
company agreement thereof.
2
"Owner" means each Holder (as defined in the PSA) of an Insured
Certificate who, on the applicable Distribution Date, is entitled under the
terms of the Insured Certificates to payment thereunder.
"Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, business or owner trust, limited
liability company, partnership or other organization or entity (whether
governmental or private).
"Premium" means the premium payable in accordance with Section 3.03
hereof.
"PSA" means the Pooling and Servicing Agreement dated as of December 1,
2006 among the Seller, the Securities Administrator, the Master Servicer, the
Depositor and the Trustee, including any amendments and supplements thereto as
therein and herein permitted.
"Registration Statement" means the Registration Statement on Form S-3 of
the Depositor relating to the Certificates.
"Regulation AB" means Subpart 229.110 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss. ss. 229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518.70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto and, if such corporation
shall for any reason no longer perform the functions of a securities rating
agency, "S&P" shall be deemed to refer to any other nationally recognized
rating agency designated by the Insurer.
"Term of the Agreement" shall be determined as provided in Section 4.01
hereof.
"Transaction" means the transactions contemplated by the Transaction
Documents, including the transaction described in the Offering Document.
"Transaction Documents" means this Agreement, the PSA, the Offering
Document, the Certificates, the Commitment, the Servicing Agreements, the
Custodial Agreement, the Assignments, the Underwriting Agreement and the
Mortgage Loan Purchase Agreements.
"Trust" means the trust created pursuant to the PSA.
3
"Underwriter" means Xxxxxx Xxxxxxx & Co. Incorporated.
"Underwriting Agreement" means the Underwriting Agreement dated as of
December 21, 2006 between the Depositor and the Underwriter including any
amendments and supplements thereto as therein and herein permitted.
Section 1.02. Generic Terms. All words used herein shall be construed to
be of such gender or number as the circumstances require. This "Agreement"
shall mean this Agreement as a whole and as the same may, from time to time
hereafter, be amended, supplemented or modified. The words "herein," "hereby,"
"hereof," "hereto," "hereinabove" and "hereinbelow," and words of similar
import, refer to this Agreement as a whole and not to any particular
paragraph, clause or other subdivision hereof, unless otherwise specifically
noted.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations, Warranties and Covenants of the Seller,
the Master Servicer and the Depositor. The Seller, the Master Servicer and the
Depositor, each as to those matters relating to itself, represent, warrant and
covenant as of the Date of Issuance as follows
(a) Due Organization and Qualification. The Seller, the Master
Servicer and the Depositor are each a federal savings bank, a national
banking association, limited liability company or a corporation, duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization. The Seller, the Master Servicer
and the Depositor are each duly qualified to do business, is in good
standing and has obtained all licenses, permits, charters, registrations
and approvals (together, "approvals") necessary for the conduct of its
business as currently conducted and as described in the Offering
Document and the performance of its obligations under the Transaction
Documents to which it is a party, in each jurisdiction in which the
failure to be so qualified or to obtain such approvals would render any
Transaction Document to which it is a party unenforceable in any respect
or would have a material adverse effect upon the Transaction, the Owners
or the Insurer.
(b) Power and Authority. Each of the Seller, the Master Servicer
and the Depositor has all necessary corporate power and authority to
conduct its business as currently conducted and, as described in the
Offering Document, to execute, deliver and perform its obligations under
the Transaction Documents to which it is a party and to consummate the
Transaction.
(c) Due Authorization. The execution, delivery and performance of
the Transaction Documents to which it is a party by the Seller, the
Master Servicer and the Depositor have been duly authorized by all
necessary corporate action and do not require any additional approvals
or consents or other action by or any notice to or filing with any
Person, including, without limitation, any governmental entity or the
Seller's, the Master
4
Servicer's or the Depositor's stockholders, which have not previously
been obtained or given by the Seller, the Master Servicer or the
Depositor.
(d) Noncontravention. Neither the execution and delivery of the
Transaction Documents to which it is a party by each of the Seller, the
Master Servicer or the Depositor, the consummation of the transactions
contemplated thereby nor the satisfaction of the terms and conditions of
the Transaction Documents:
(i) conflicts with or results in any breach or violation of
any provision of Organizational Documents of the Seller, the
Master Servicer or the Depositor or any law, rule, regulation
order, writ, judgment, injunction, decree, determination or award
currently in effect having applicability to the Seller, the Master
Servicer or the Depositor or any of their material properties,
including regulations issued by an administrative agency or other
governmental authority having supervisory powers over the Seller,
the Master Servicer and the Depositor;
(ii) constitutes a default by the Seller, the Master
Servicer or the Depositor under or a breach of any provision of
any material loan agreement, mortgage, indenture or other
agreement or instrument to which the Seller, the Master Servicer
or the Depositor is a party or by which any of its or their
respective properties, which are individually or in the aggregate
material to the Seller, the Master Servicer or the Depositor, is
or may be bound or affected; or
(iii) results in or requires the creation of any lien upon
or in respect of any assets of the Seller, the Master Servicer or
the Depositor, except as contemplated by the Transaction
Documents.
(e) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Seller, the Master
Servicer or the Depositor or any of its or their subsidiaries or any
properties or rights of the Seller, the Master Servicer or the Depositor
or any of its or their subsidiaries, pending or, to the Seller's, the
Master Servicer's and the Depositor's knowledge, threatened, which, in
any case, could reasonably be expected to result in a Material Adverse
Change with respect to the Seller, the Master Servicer or the Depositor.
(f) Valid and Binding Obligation. The Transaction Documents to
which each of the Seller, the Master Servicer and the Depositor is a
party constitute and when executed by the Seller, the Master Servicer
and the Depositor, as applicable, (if not previously) will constitute,
the legal, valid and binding obligations of the Seller, the Master
Servicer and the Depositor, as applicable, enforceable against the
Seller, the Master Servicer and the Depositor in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or limiting creditors' rights generally and general
equitable principles, as such relate to the Seller, the Master Servicer
or the Depositor.
5
(g) Financial Statements. The Financial Statements supplied or
publicly available, to the Insurer prior to the Date of Issuance (i)
present fairly the financial condition and results of operations of the
Seller, the Master Servicer and the Depositor as of the dates and for
the periods indicated and (ii) have been prepared in accordance with
generally accepted accounting principles consistently applied, except as
noted therein and subject to year-end adjustments with respect to
interim statements. Since the date of such Financial Statements, there
has been no Material Adverse Change in such condition or operations of
the Seller, the Master Servicer or the Depositor.
(h) Compliance With Law, Regulations, Etc. Except as disclosed in
writing to the Insurer or in the Offering Document, none of the Seller,
the Master Servicer or the Depositor has notice or any reason to believe
that any practice, procedure or policy employed by the Seller, the
Master Servicer or the Depositor in the conduct of its business
violates, any law, regulation, judgment or agreement applicable to the
Seller, the Master Servicer or the Depositor which, if enforced, would
have a material adverse effect on the ability of the Seller, the Master
Servicer or the Depositor to perform its obligations under the
Transaction Documents to which it is a party. Except as disclosed in
writing to the Insurer or in the Offering Document, none of the Seller,
the Master Servicer or the Depositor is in breach of or in default under
any applicable law or administrative regulation of any department,
division, agency or instrumentality which has jurisdiction over it or
any applicable judgment or decree or any loan agreement, note,
resolution, certificate, agreement or other instrument to which the
Seller, the Master Servicer or the Depositor is a party or is otherwise
subject which, if enforced, would have a material adverse effect on the
ability of the Master Servicer, the Seller of the Depositor, as the case
may be, to perform its respective obligations under the Transaction
Documents to which it is a party.
(i) Accuracy of Information. None of the Transaction Documents to
which it is a party nor any other documents, reports, notices, operating
agreements, schedules, certificates, statements or other writings
(collectively, the "Documents"), furnished to the Insurer by the Seller,
the Master Servicer or the Depositor on or before the Date of Issuance
contain any statement of a material fact by the Seller, the Master
Servicer or the Depositor which was untrue or misleading in any material
respect when made. Since the furnishing of the Documents but prior to
the offering of the Insured Certificates, there has been no change nor
any development or event involving a prospective change of which the
Seller, the Master Servicer or the Depositor is aware which would render
any of the Transaction Documents to which it is a party untrue or
misleading in a material respect.
(j) Continuing Information. The Seller, the Master Servicer or the
Depositor, as applicable, shall deliver to the Insurer concurrently with
the delivery thereof to the Trustee and/or the Securities Administrator
the statements, notices, reports or other information required by the
PSA to be delivered by each such party to the Insurer or the
Certificateholders. Promptly upon receipt thereof, the Master Servicer
shall deliver copies of all schedules, financial statements or other
similar reports delivered to or by the
6
Master Servicer pursuant to the terms of the PSA. Upon the request of
the Insurer, the Seller, the Master Servicer or the Depositor shall make
available, with reasonable promptness, any Financial Statements or data
regarding the Trust.
(k) Access to Records; Discussions With Officers and Accountants.
The Seller, the Master Servicer and the Depositor shall, upon the
request of the Insurer, permit the Insurer or its authorized agent, at
reasonable times and upon reasonable notice, to inspect the Seller's,
the Master Servicer's or the Depositor's books and records as they may
relate to the Certificates, the Mortgage Loans and the Seller's, the
Master Servicer's or the Depositor's obligations under the Transaction
Documents to which it is a party and to discuss the Seller's, the Master
Servicer's or the Depositor's affairs, finances and accounts with an
appropriate authorized officer of the Seller, the Master Servicer or the
Depositor.
(l) Notice of Material Events. The Master Servicer (to the extent
that a responsible officer of the Master Servicer has actual knowledge
thereof), the Seller and the Depositor shall be obligated (which
obligation shall be satisfied as to each if performed by the Seller, the
Master Servicer or the Depositor) promptly to inform the Insurer in
writing of the occurrence of any of the following to the extent any of
the following relate to it:
(i) the submission of any claim or the initiation or threat
of any legal process, litigation or administrative or judicial
investigation or rule making or disciplinary proceeding in any
federal, state or local court or before any arbitration board or
any such proceeding threatened by any government agency, that, if
adversely determined, could have a material adverse effect on the
Depositor, the Owners or the Insurer or would result in a Material
Adverse Change with respect to the Seller, the Master Servicer or
the Depositor;
(ii) the occurrence of any Default or Event of Default or of
any Material Adverse Change;
(iii) the commencement of any proceedings by or against the
Seller, the Master Servicer or the Depositor under any applicable
bankruptcy, reorganization, liquidation, rehabilitation,
insolvency or other similar law now or hereafter in effect or of
any proceeding in which a receiver, liquidator, conservator,
trustee or similar official shall have been or may be, appointed
or requested for the Master Servicer, the Seller or the Depositor
or any of its or their assets; or
(iv) the receipt of notice that (A) the Seller, the Master
Servicer or the Depositor is being placed under regulatory
supervision, (B) any license, permit, charter, registration or
approval necessary for the conduct of the business of the Seller,
the Master Servicer or the Depositor is to be or may be suspended
or revoked or (C) the Seller, the Master Servicer or the Depositor
is to cease and desist any practice, procedure or policy employed
by the Master Servicer, the
7
Seller or the Depositor in the conduct of its business and such
cessation may result in a Material Adverse Change with respect to
the Seller, the Master Servicer or the Depositor or could have a
material adverse effect on the Owners or the Insurer.
(m) Impairment of Rights. The Seller, the Master Servicer and the
Depositor shall not take any action, if such action will have a material
adverse effect on the Insurer's ability to enforce its rights under the
PSA or this Agreement; provided, however, that this Section 2.01 (m)
shall not prohibit the Seller, the Master Servicer or the Depositor from
taking any action it is required to take pursuant to the Transaction
Documents to which it is a party, any applicable law or order of any
court or regulatory authority with jurisdiction over the Seller, the
Master Servicer, the Depositor, the Transaction Documents to which it is
a party or the Certificates.
(n) Securities Law Compliance. The Seller and the Depositor each
represents and warrants that neither the offer nor the sale of the
Certificates to the Underwriter has been or will be in violation of the
Securities Act or any federal or state securities laws. The Seller and
the Depositor each further represents and warrants that it is not
required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
(o) Transcripts. The Seller and the Depositor shall use its best
efforts to, within 90 days following the closing of the Transaction,
provide each of the Insurer and its counsel a final transcript
containing the documents and opinions executed in connection with the
Transaction. Upon the request of the Insurer, the Seller and the
Depositor shall provide or cause to be provided to the Insurer a copy of
each of the Transaction Documents in a format acceptable to the Insurer.
(p) Transaction Documents. Each of the representations and
warranties of the Seller, the Master Servicer and the Depositor
contained in the Transaction Documents to which it is a party is true
and correct in all material respects and the Seller, the Master Servicer
and the Depositor hereby make each such representation and warranty to
and for the benefit of, the Insurer as if the same were set forth in
full herein.
(q) Solvency; Fraudulent Conveyance. The Seller and the Depositor
are solvent and will not be rendered insolvent by the Transaction and,
after giving effect to the Transaction, neither the Seller nor the
Depositor will be left with an unreasonably small amount of capital with
which to engage in its business, nor does the Seller or the Depositor
intend to incur or believe that it has incurred, debts beyond its
ability to pay as they mature. Neither the Seller nor the Depositor
contemplates the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the Seller or the
Depositor or any of its or their assets. The amount of consideration
being received by the Seller and the Depositor upon the sale of the
Certificates to the Underwriter constitutes reasonably equivalent value
and fair consideration for the interest in the Mortgage Loans
8
evidenced by the Certificates. The Seller is not transferring the
Mortgage Loans to the Depositor, the Depositor is not transferring the
Mortgage Loans to the Trust and the Depositor is not selling the
Certificates to the Underwriter, as provided in the Transaction
Documents, with any intent to hinder, delay or defraud any of the
Seller's or the Depositor's creditors.
(r) Compliance With Agreements and Applicable Laws. The Seller,
the Master Servicer and the Depositor shall comply in all material
respects with the terms and conditions of the Transaction Documents to
which it is a party and shall comply with all material requirements of
any law, rule or regulation applicable to it.
(s) Maintenance of Existence. The Seller, the Master Servicer and
the Depositor, its or their successors and assigns, shall maintain their
corporate existence and shall at all times continue to be duly organized
under the laws of their respective jurisdictions of organization and
duly qualified and duly authorized (as described in section 2.01(a), (b)
and (c) hereof) and shall conduct its business in accordance with the
terms of its Organizational Documents.
(t) Financing Statements and Further Assurances. The Master
Servicer will cause to be filed all necessary financing statements or
other instruments and any amendments or continuation statements relating
thereto, necessary to be kept and filed in such manner and in such
places as may be required by law to preserve and protect fully the
interest of the Trustee in the Trust. The Master Servicer, the Depositor
and the Seller shall, upon the request of the Insurer, from time to
time, execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered, within ten days of such request, such
supplements or amendments hereto and such further instruments and take
such further action as may be reasonably required in the Insurer's
judgment to effectuate the intention, performance and provisions of the
Transaction Documents. In addition, each of the Master Servicer, the
Depositor and the Seller agree to cooperate with S&P and Xxxxx'x in
connection with any review of the Transaction that may be undertaken by
S&P and Xxxxx'x after the date hereof.
(u) Use of Name. The Master Servicer, the Depositor and the Seller
hereby agree not to use the Insurer's name in any public document (other
than as required by law, this Agreement or the other Transaction
Documents) including, without limitation, a press release or
presentation, announcement or forum without the Insurer's prior written
consent. In the event that the Master Servicer, the Depositor or the
Seller is advised by counsel that it has a legal obligation that is not
already required by this Agreement or any other Transaction Document to
disclose the Insurer's name in any press release, public announcement or
other public document, it shall provide the Insurer with at least three
Business Days prior written notice of its intent to use the Insurer's
name together with a copy of the proposed use of the Insurer's name and
of any description of a transaction with the Insurer and shall obtain
the Insurer's prior written consent as to the form and substance of the
proposed use of the Insurer's name and any such description.
9
Section 2.02. Representations, Warranties and Covenants of Trustee and
Securities Administrator. Each of the Securities Administrator and the Trustee
represents and warrants to, as of the Date of Issuance and covenants with the
other parties hereto, in each case as to itself, as follows:
(a) Due Organization and Qualification. Each of the Securities
Administrator and the Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws of the
United States. Each of the Securities Administrator and the Trustee is
duly qualified to do business, is in good standing and has obtained all
licenses, permits, charters, registrations and approvals (together,
"approvals") necessary for the conduct of its business as currently
conducted and as described in the Offering Document and the performance
of its obligations under the Transaction Documents, in each jurisdiction
in which the failure to be so qualified or to obtain such approvals
would render any Transaction Document unenforceable in any respect or
would have a material adverse effect upon the Transaction, the Owners or
the Insurer.
(b) Due Authorization. The execution, delivery and performance of
the Transaction Documents by the Trustee and the Securities
Administrator have been duly authorized by all necessary action and do
not require any additional approvals or consents or other action by or
any notice to or filing with any Person, including, without limitation,
any governmental entity or the Trustee's and the Securities
Administrator's stockholders, which have not previously been obtained or
given by the Trustee or the Securities Administrator, as applicable.
(c) Noncontravention. Neither the execution and delivery of the
Transaction Documents by the Trustee or the Securities Administrator,
the consummation of the transactions contemplated thereby nor the
satisfaction of the terms and conditions of the Transaction Documents:
(i) conflicts with or results in any breach or violation of
any provision of the Organizational Documents of the Trustee or
the Securities Administrator or any law, rule, regulation order,
writ, judgment, injunction, decree, determination or award
currently in effect having applicability to the Trustee or the
Securities Administrator or any of its material properties,
including regulations issued by an administrative agency or other
governmental authority having supervisory powers over the Trustee
or the Securities Administrator, as applicable;
(ii) constitutes a default by the Trustee or the Securities
Administrator under or a breach of any provision of any loan
agreement, mortgage, indenture or other agreement or instrument to
which the Trustee or the Securities Administrator is a party or by
which any of its or their respective properties, which are
individually or in the aggregate material to the Trustee or the
Securities Administrator, is or may be bound or affected; or
10
(iii) results in or requires the creation of any lien upon
or in respect of any assets of the Trustee or the Securities
Administrator, except as contemplated by the Transaction
Documents.
(d) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Trustee or the Securities
Administrator or any of its respective subsidiaries or any properties or
rights of the Trustee or the Securities Administrator or any of its
respective subsidiaries, pending or, to the Trustee's or the Securities
Administrator's knowledge after reasonable inquiry, threatened, which,
in any case, could reasonably be expected to result in a Material
Adverse Change with respect to the Trustee or the Securities
Administrator, as applicable.
(e) Valid and Binding Obligations. The Insured Certificates, when
executed, authenticated and issued in accordance with the PSA and the
Transaction Documents (other than the Insured Certificates) to which it
is a party, when executed and delivered by the Trustee and/or the
Securities Administrator, as applicable, will constitute the legal,
valid and binding obligations of the Trust, the Trustee or the
Securities Administrator, as applicable, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles.
Neither the Securities Administrator nor the Trustee will at any time in
the future deny that the Transaction Documents constitute the legal,
valid and binding obligations of the Trustee and the Securities
Administrator.
(f) Compliance With Law, Etc. No practice, procedure or policy
employed or proposed to be employed, by the Trustee or the Securities
Administrator in the conduct of its respective business violates any
law, regulation, judgment, agreement order or decree applicable to any
of them that, if enforced, could reasonably be expected to result in a
Material Adverse Change with respect to the Trustee or the Securities
Administrator. Neither the Securities Administrator nor the Trustee is
in breach of or in default under any applicable law or administrative
regulation of its respective jurisdiction of organization or any
department, division, agency or instrumentality thereof or of the United
States or any applicable judgment or decree or any loan agreement, note,
resolution, certificate, agreement or other instrument to which the
Trustee or the Securities Administrator is a party or is otherwise
subject which, if enforced, would have a material adverse effect on the
ability of the Trustee or the Securities Administrator to perform its
obligations under the Transaction Documents.
(g) Transaction Documents. Each of the representations and
warranties of the Trustee and the Securities Administrator contained in
the Transaction Documents is true and correct in all material respects
and each of the Securities Administrator and the Trustee hereby makes
each such representation and warranty to and for the benefit of, the
Insurer as if the same were set forth in full herein.
11
(h) Compliance. Each of the Securities Administrator and the
Trustee shall comply in all material respects with the terms and
conditions of the Transaction Documents to which it is a party.
Section 2.03. Additional Covenants of the Insurer Relating to Regulation
AB
(a) Upon the filing of its audited financial statements for the
2006 fiscal year, the Insurer hereby authorizes the Depositor to
incorporate into reports filed pursuant to the Exchange Act relating to
this transaction such audited financial statements as appropriate for
the related period meeting the requirements of Regulation S-X of the
Securities Act. The Insurer hereby authorizes the Depositor to
incorporate into reports filed pursuant to the Exchange Act relating to
this transaction the Insurer's quarterly and annual financial statements
for so long as such financial statements may be required for the
Depositor to comply with its reporting requirements under the Exchange
Act. All written notices to the Insurer under this Section 2.03 shall be
sent to the Insurer via electronic mail at
XXXXXXXxxxxxxxXxxxxx@xxxx.xxx.
(b) The Insurer shall give the Depositor written notice in the
event (i) MBIA Inc. no longer files reports with the Commission pursuant
to section 13(a) or 15(d) of the Exchange Act or (ii) the Insurer
determines that it otherwise fails to satisfy the conditions set forth
for incorporation by reference in Item 1100(c) under Regulation AB. If
the Insurer gives the Depositor any such written notice, upon the
written request of the Depositor, the Insurer shall furnish to the
Depositor the Insurer's unaudited financial statements for each of the
March, June and September fiscal quarters and audited financial
statements for each fiscal year (the "Insurer Financial Statements") as
soon as reasonably practical after the release thereof for the period
specified below in this Section 2.03(b). Subject to the provisions of
this Section 2.03(b), (i) the Insurer Financial Statements shall be
delivered in electronic form via electronic mail to
xxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx and
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx, or such other address that has
been designated by the Depositor or the Securities Administrator, as
applicable, and provided in writing to the Insurer, and (ii) the Insurer
shall continue to furnish Insurer Financial Statements to the Depositor
as soon as reasonably practical after the release thereof for so long as
the Depositor is subject to reporting requirements under the Exchange
Act in relation to the Insured Certificates and such Insurer Financial
Statements are required for the Depositor to comply with such reporting
requirements.
(c) If the Depositor is required to include information required
by Item 1119 of Regulation AB in the Depositor's Report on Form 10-K and
the Depositor provides written notice to the Insurer via electronic
mail, referencing "Reg AB Item 1119 Reporting" (i) identifying the
relevant parties to the transaction as required under paragraph (a) of
Item 1119 of Regulation AB (such parties, the "Transaction Parties") and
(ii) requesting that the Insurer identify whether the Insurer is an
affiliate of any of the Transaction Parties, then the Insurer shall
provide the following information to the Depositor in electronic form
via electronic mail to xxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx
12
and xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx, or such other address that has
been designated by the Depositor or the Securities Administrator, as
applicable, not later than 30 days after such request by the Depositor:
(x) any Transaction Party that directly controls, or is directly
controlled by the Insurer and (y) any Transaction Party that, to the
knowledge of senior management of the Insurer, indirectly controls, is
indirectly controlled by, or is under common control with, the Insurer.
ARTICLE III
THE POLICY; REIMBURSEMENT
Section 3.01. Agreement To Issue the Policy. The Insurer agrees, subject
to the conditions set forth in Section 3.02 hereof, to issue the Policy on the
Date of Issuance.
Section 3.02. Conditions Precedent to Issuance of the Policy. The
Seller, the Master Servicer, the Depositor and the Underwriter shall have
complied with the terms and satisfied the conditions precedent set forth
below:
(a) the Underwriter shall have paid or caused to be paid that
portion of a non-refundable Premium payable, if any, on the Date of
Issuance in accordance with Section 3.03 hereof;
(b) the Seller and the Depositor shall have complied with all
requirements of the Commitment;
(c) the Insurer shall have received true and correct copies of any
governmental approvals necessary for the transactions contemplated by
this Agreement and the PSA or a certificate to the effect that no such
approvals are necessary;
(d) the Insurer shall have received a certificate of an authorized
officer of the Seller, the Master Servicer and the Depositor certifying
the name and true signatures of the officers of the Seller, the Master
Servicer and the Depositor executing the Transaction Documents; and
(e) the Insurer shall have received confirmation that the risk
secured by the Policy constitutes a "AAA" risk by S&P and at least "Aaa"
by Xxxxx'x and that the Insured Certificates, when issued, will be rated
"AAA" by S&P and "Aaa" by Xxxxx'x in each case without regard to the
Policy.
Issuance of the Policy will be conclusive evidence of satisfaction or waiver
of any of the conditions set forth in this Section 3.02.
Section 3.03. Payment of Fees and Premium.
13
(a) In consideration of the issuance by the Insurer of the Policy,
the Insurer shall be entitled to receive a premium (the "Premium") in
accordance with the terms of the Commitment. The Premium due after the
Date of Issuance shall be payable pursuant to the PSA. The Premium shall
be calculated according to paragraph 1 of the Commitment. The Premium
paid hereunder shall be nonrefundable without regard to whether the
Insurer makes any payment under the Policy or any other circumstances
relating to the Insured Certificates or provision being made for payment
of the Insured Certificates prior to maturity. The Securities
Administrator from assets of the Trust shall make all payments of
Premium to be made pursuant to the PSA by wire transfer to an account
designated by the Insurer by written notice to the Securities
Administrator.
(b) The Underwriter shall pay the fees of the Insurer's counsel in
connection with the Transaction, Xxxxx'x fees, S&P's fees and the cost
of obtaining the Insurer's accountant's consent letter.
Section 3.04. Payment Procedure. All payments to be made to the Insurer
under this Agreement shall be made to the Insurer in lawful currency of the
United States of America in immediately available funds at the notice address
for the Insurer as specified in the PSA on the date when due. Payments to be
made to the Insurer under this Agreement shall bear interest at the Late
Payment Rate from the date when due to the date paid, provided that
reimbursement to the Insurer of Insured Payments shall be made from the assets
of the Trust in accordance with the terms of the PSA at the Late Payment Rate.
Section 3.05. Reimbursement and Additional Payment Obligation of the
Seller, the Master Servicer and the Depositor.
(a) In accordance with the priorities established in Sections 5.02
and 5.03 of the PSA, the Insurer shall be entitled to (i) reimbursement
for any payment made by the Insurer under the Policy, which
reimbursement shall be due and payable on the date that any amount is to
be paid pursuant to a Notice (as defined in the Policy), in an amount
equal to the amount to be so paid and all amounts previously paid that
remain unreimbursed, together with interest on any and all amounts
remaining unreimbursed (to the extent permitted by law, if in respect of
any unreimbursed amounts representing interest) from the date such
amounts became due until paid in full (after as well as before
judgment), at a rate of interest equal to the Late Payment Rate, (ii)
any unpaid Premium together with interest thereon at a rate equal to the
Late Payment Rate and (iii) payment or reimbursement of any other
amounts owned to the Insurer hereunder together with interest thereon at
a rate equal to the Late Payment Rate.
(b) Notwithstanding anything in Section 3.05(a) to the contrary,
the Seller, the Master Servicer and the Depositor agree to reimburse the
Insurer as follows: (i) from the Seller, for payments made under the
Policy arising as a result of the applicable Seller's failure to
repurchase any Mortgage Loan required to be repurchased pursuant to
Section 2.05 of the PSA, together with interest on any and all amounts
remaining
14
unreimbursed (to the extent permitted by law, if in respect of any
unreimbursed amounts representing interest) from the date such amounts
became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate and (ii) from the Master
Servicer, for payments made under the Policy, arising as a result of the
Master Servicer's failure to deposit into the Custodial Account or
Distribution Account any amount required to be so deposited pursuant to
the PSA, together with interest on any and all amounts remaining
unreimbursed (to the extent permitted by law, if in respect to any
unreimbursed amounts representing interest) from the date such amounts
became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate.
(c) The Seller and the Depositor each agrees to reimburse the
Insurer, as follows: any and all charges, fees, costs and expenses that
the Insurer may reasonably pay or incur, including, but not limited to,
attorneys' and accountants' fees and expenses, in connection with (i)
the enforcement, defense or preservation of the Insurer's rights in
respect of any of the Transaction Documents, including, without
limitation, instituting, defending, monitoring or participating in any
litigation or proceeding (including, without limitation, any insolvency
or bankruptcy proceeding in respect of any Transaction participant or
any affiliate thereof) relating to any of the Transaction Documents, any
party to any of the Transaction Documents, in its capacity as such a
party, or the Transaction, (ii) any action, proceeding or investigation
affecting the Trust, or the rights or obligations of the Insurer under
the Policy or the Transaction Documents, including (without limitation)
any judgment or settlement entered into affecting the Insurer or the
Insurer's interests, (iii) any consent, amendment, waiver or other
action with respect to, or related to, any Transaction Document, whether
or not executed or completed ("Reimbursable Amounts"). Reimbursable
Amounts due to MBIA shall bear interest at a rate equal to the Late
Payment Rate. In the event that the Master Servicer, the Seller or the
Depositor fails to pay to the Insurer any Reimbursable Amounts, the
Insurer shall be entitled to reimbursement of such amount together with
interest thereon from Sections 5.02 and 5.03 of the PSA. In addition,
MBIA reserves the right to charge a fee as a condition to executing any
waiver, consent or amendment proposed in respect of any of the
Transaction Documents.
(d) The Seller, the Master Servicer and the Depositor agree to pay
to the Insurer as follows: any payments made by the Insurer on behalf of
or advanced to the Seller, the Master Servicer or the Depositor,
respectively, including, without limitation, any amounts payable by the
Seller, the Master Servicer or the Depositor pursuant to the
Certificates or any other Transaction Documents.
(e) Following termination of the PSA pursuant to Section 7.01
thereof, the Master Servicer agrees to reimburse the Insurer for any
Insured Payments required to be made pursuant to the Policy subsequent
to the date of such termination.
All such amounts are to be immediately due and payable without demand.
15
Section 3.06. Indemnification by the Seller, the Master Servicer and the
Depositor.
(a) In addition to any and all rights of indemnification or any
other rights of the Insurer pursuant hereto or under law or equity, the
Seller, the Master Servicer and the Depositor and any successors thereto
agree, severally and not jointly, to pay and to protect, indemnify and
save harmless, the Insurer and its officers, directors, shareholders,
employees, agents and each person, if any, who controls the Insurer
within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act from and against any and all claims,
losses, liabilities (including penalties), actions, suits, judgments,
demands, damages, costs or reasonable expenses (including, without
limitation, reasonable fees and expenses of attorneys, consultants and
auditors and reasonable costs of investigations) or obligations
whatsoever paid by the Insurer (herein collectively referred to as
"Liabilities") of any nature arising out of or relating to the
transactions contemplated by the Transaction Documents by reason of:
(i) any act or omission of the Seller, the Master Servicer
or the Depositor or the allegation thereof, in connection with the
offering, issuance, sale or delivery of the Certificates other
than by reason of false or misleading information provided by the
Insurer in writing for inclusion in the Offering Document, which
is contained in the captions "Description of MBIA Insurance
Corporation" and "Description of the Certificates--The Class A-2-W
and Class A-5-W Policy" of the Offering Document;
(ii) the misfeasance or malfeasance of or negligence or
theft committed by, any director, officer, employee or agent of
the Seller, the Master Servicer or the Depositor;
(iii) the violation by the Seller, the Master Servicer or
the Depositor of any federal or state securities, banking or
antitrust laws, rules or regulations in connection with the
issuance, offer and sale of the Certificates or the transactions
contemplated by the Transaction Documents;
(iv) the violation by the Depositor, the Seller or the
Master Servicer of any federal or state laws, rules or regulations
relating to the Transaction or the origination of the Mortgage
Loans, including, without limitation, any consumer protection,
lending and disclosure laws and any laws with respect to the
maximum amount of interest permitted to be received on account of
any loan of money or with respect to the Mortgage Loans; provided,
however, that where the remedy of the Insurer for the breach of
any representation or warranty with respect to the Mortgage Loans
under the PSA is expressly limited to the payment of the Purchase
Price (as defined in the PSA) of the related Mortgage Loan, such
remedy shall be the sole remedy relating to such breach subject to
Section 3.06(b) of this Agreement;
16
(v) the material breach by the Seller, the Master Servicer
or the Depositor of any of its obligations under this Agreement or
any of the other Transaction Documents (after taking into account
any applicable cure period set forth in the related Transaction
Document); and
(vi) the material breach by the Seller, the Master Servicer
or the Depositor of any representation or warranty on the part of
the Seller, the Master Servicer or the Depositor contained in the
Transaction Documents or in any certificate or report furnished or
delivered to the Insurer thereunder (after taking into account any
applicable cure period set forth in the related Transaction
Document).
This indemnity provision and the provisions in Section 3.05 shall
survive the termination of this Agreement and shall survive until the
statute of limitations has run on any causes of action which arise from
one of these reasons and until all suits filed as a result thereof have
been finally concluded.
(b) The Seller agrees to indemnify the Trust and the Insurer for
any and all Liabilities that have been incurred and to pay in advance an
amount sufficient to fully protect and compensate the Trust and the
Insurer for any future risk of loss that is or may be incurred by the
Trust or the Insurer due to any claim, counterclaim, rescission, setoff
or defense asserted by an Obligor under any Mortgage Loan subject to the
Federal Trade Commission regulations provided in 16 C.F.R. Part 433 and
under any Mortgage Loan which is a "mortgage" as such term is defined in
15 U.S.C. ss. 1602(aa).
(c) Each of the Seller, the Master Servicer and the Depositor
agrees to pay to the Insurer interest on any and all amounts required to
be paid by the Seller, the Master Servicer or the Depositor, including
but not limited to those amounts described in Section 3.05 and this
Section 3.06, from the date payable until payment thereof is made in
full. Such interest shall be payable at the Late Payment Rate per annum.
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of Agreement. This Agreement shall
take effect on the date on which the Policy is issued and shall remain in
effect until such time as the Insurer is no longer subject to a claim under
the Policy and all amounts payable by the Seller, the Master Servicer or the
Depositor hereunder or under the PSA and under the Certificates have been paid
in full; provided, however, that the provisions of Sections 3.05 and 3.06
shall survive any termination of this Agreement.
Section 4.02. Waiver of Rights; Further Assurances.
17
(a) Excepting at such times as a default in payment under the
Policy shall exist or shall have occurred, none of the Master Servicer,
the Trustee, the Securities Administrator, the Seller or the Depositor
shall grant any waiver of any of its rights under any of the Transaction
Documents to which any of them is a party without the prior written
consent of the Insurer, such consent not to be unreasonably withheld or
delayed, (unless the grant of such waiver is expressly permitted in the
applicable Transaction Document) and any such waiver without the prior
written consent of the Insurer shall be null and void and of no force or
effect.
(b) To the extent permitted by law, the Master Servicer, the
Securities Administrator, the Trustee, the Seller and the Depositor
agree that they will, upon the reasonable request of the Insurer, from
time to time, following good faith negotiations in connection therewith,
execute, acknowledge and deliver or cause to be executed, acknowledged
and delivered, within 10 days of such request, such amendments hereto
and such further instruments and take such further action as may be
required in the Insurer's reasonable judgment to effectuate the
intention of or facilitate the performance of this Insurance Agreement.
Section 4.03. Obligations Absolute. The obligations of the Seller, the
Master Servicer, the Depositor, the Securities Administrator and the Trustee
hereunder shall be absolute and unconditional and shall not be subject to and
the Seller, the Master Servicer, the Depositor, the Securities Administrator
and the Trustee hereby waive (a) presentment and demand for payment, (b)
notices in connection with delivery and acceptance hereof or notices in
connection with performance, default or enforcement of payment hereunder and
(c) its rights of, abatement, diminution, postponement or deduction or to any
defense other than payment or to any right of setoff or recoupment arising out
of any breach under any of the Transaction Documents, by any party thereto or
any beneficiary thereof or out of any obligation at any time owing to the
Seller, the Securities Administrator, the Master Servicer, the Depositor or
the Trustee. Nothing herein shall be construed as prohibiting the Seller, the
Master Servicer, the Securities Administrator, the Depositor or the Trustee
from pursuing any rights or remedies it may have against any other person or
entity in a separate legal proceeding. The obligations of the Seller, the
Master Servicer, the Depositor, the Securities Administrator and the Trustee
hereunder are absolute and unconditional and will be paid or performed
strictly in accordance with this Agreement.
Section 4.04. Assignments; Reinsurance; Third-Party Rights.
(a) This Agreement shall be a continuing obligation of the Seller,
the Master Servicer and the Depositor and shall (i) be binding upon the
Seller, the Master Servicer and the Depositor or their respective
successors and assigns and (ii) inure to the benefit of and be
enforceable by the Insurer and its successors, transferees and assigns.
None of the Seller, the Master Servicer or the Depositor may assign this
Agreement or delegate any of its rights or obligations hereunder,
without the prior written consent of the Insurer, such consent not to be
unreasonably withheld or delayed.
18
(b) The Insurer shall have the right to give participations in its
rights under this Agreement and to enter into contracts of reinsurance
with respect to the Policy and each such participant or reinsurer shall
be entitled to the benefit of any representation, warranty, covenant and
obligation of the Seller, the Master Servicer or the Depositor hereunder
as if such participant or reinsurer was a party hereto; provided that no
such grant of participation shall operate to relieve the Insurer of any
of its obligations hereunder or under the Policy.
(c) In addition, the Insurer shall be entitled to assign or pledge
to any bank or other lender providing liquidity or credit with respect
to the Transaction or the obligations of the Insurer in connection
therewith any rights of the Insurer under the Transaction Documents or
with respect to any real or personal property or other interests pledged
to the Insurer or in which the Insurer has a security interest, in
connection with the Transaction.
(d) Except as provided herein with respect to participants and
reinsurers, nothing in this Agreement shall confer any right, remedy or
claim, express or implied, upon any person, including, particularly, any
Holder of a Certificate, other than the Insurer, against the Seller, the
Master Servicer and the Depositor and all the terms, covenants,
conditions, promises and agreements contained herein shall be for the
sole and exclusive benefit of the parties hereto and their successors.
None of the Securities Administrator, the Trustee or any Holder of a
Certificate shall have any right to payment from the premium paid
pursuant to Section 3.03 hereof.
Section 4.05. Liability of Insurer. The Insurer shall not be responsible
for any act or omission of the Securities Administrator or the Trustee with
respect to its use of the Policy. Neither the Insurer nor any of its officers,
directors or employees shall be liable or responsible for: (a) the use which
may be made of the Policy by or for any acts or omissions of the Securities
Administrator or the Trustee in connection therewith; or (b) the validity,
sufficiency, accuracy or genuineness of documents or of any endorsement(s)
thereon, submitted by any person in connection with a claim under the Policy,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged, unless the Insurer has actual
knowledge thereof. In furtherance and not in limitation of the foregoing, the
Insurer may accept documents that appear on their face to be in order, without
responsibility for further investigation.
Section 4.06. Subrogation. To the extent of any payments under a Policy,
the Insurer shall be fully subrogated to any remedies against the Seller, the
Master Servicer or the Depositor or in respect of the Mortgage Loans available
to the Trustee and the Securities Administrator under the PSA. The Trustee and
the Securities Administrator acknowledge such subrogation and, further, agrees
to execute such instruments prepared by the Insurer and to take such
reasonable actions as, in the sole judgment of the Insurer, are necessary to
evidence such subrogation and to perfect the rights of the Insurer to receive
any moneys paid or payable under the PSA.
19
ARTICLE V
DEFAULTS; REMEDIES
Section 5.01. Defaults. The occurrence of either of the following events
shall constitute an Event of Default hereunder:
(a) any representation or warranty made by the Seller, the Master
Servicer or the Depositor under this Agreement shall prove to be untrue
or incomplete in any material respect; provided, however, that if the
Seller, the Master Servicer or the Depositor effectively cures any such
defect in any representation or warranty under such agreement within the
time period specified in such agreement as the cure period therefor,
such defect shall not in and of itself constitute an Event of Default
hereunder; or
(b) the Seller, the Master Servicer or the Depositor shall fail to
pay to the Insurer when due any amount payable by the Seller, the Master
Servicer or the Depositor under this Agreement or the PSA, unless such
amounts are paid in full within the applicable cure period explicitly
provided for under such agreement; or
(c) the occurrence of an Event of Default under the PSA (as
defined therein).
Section 5.02. Remedies; No Remedy Exclusive.
(a) Upon the occurrence of an Event of Default, the Insurer may
exercise any one or more of the rights and remedies set forth below:
(i) exercise any rights and remedies available to the
Insurer under the Transaction Documents in accordance with the
terms of the Transaction Documents or direct the Trustee and the
Securities Administrator to exercise such party's remedies in
accordance with the terms of the Transaction Documents; or
(ii) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts then
due and thereafter to become due under the Transaction Documents
or to enforce performance and observance of any obligation,
agreement or covenant of the Seller, the Master Servicer or the
Depositor under the Transaction Documents, as applicable.
(b) Unless otherwise expressly provided, no remedy herein
conferred upon or reserved is intended to be exclusive of any other
available remedy, but each remedy shall be cumulative and shall be in
addition to other remedies given under the Transaction Documents or
existing at law or in equity. No delay or omission to exercise any right
or power accruing under the Transaction Documents upon the happening of
any event set forth in Section 5.01 hereof shall impair any such right
or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Insurer to exercise any
20
remedy reserved to the Insurer in this Article, it shall not be
necessary to give any notice, other than such notice as may be expressly
required in this Article V.
Section 5.03. Waivers.
(a) No failure by the Insurer of the parties to exercise and no
delay by the Insurer in exercising, any right hereunder shall operate as
a waiver thereof. The exercise by the Insurer of any right hereunder
shall not preclude the exercise of any other right and the remedies
provided herein to the Insurer are declared in every case to be
cumulative and not exclusive of any remedies provided by law or equity.
(b) The Insurer shall have the right, to be exercised in its
complete discretion, to waive any Event of Default hereunder, by a
writing setting forth the terms, conditions and extent of such waiver
signed by the Insurer and delivered to the Trustee, the Securities
Administrator, the Seller, the Master Servicer and the Depositor. Unless
such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence which gave rise to
the Event of Default so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Amendments, Changes and Modifications. This Agreement may
be amended, changed, modified, altered or terminated only by written
instrument or written instruments signed by the Insurer, the Trustee, the
Securities Administrator, the Seller, the Master Servicer and the Depositor.
The Seller and the Depositor also agree to provide prior written notification
to Xxxxx'x and S&P of any amendment to this Agreement. No act or course of
dealing shall be deemed to constitute an amendment, modification or
termination hereof.
Section 6.02. Notices. All demands, notices and other communications to
be given hereunder shall be in writing (except as otherwise specifically
provided herein) and shall be mailed by registered mail or personally
delivered or telecopied to the recipient as follows:
(a) To the Insurer:
21
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Insured Portfolio Management-Structured Finance
(IPM-SF)(MSM 2006-17XS)
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
(in each case in which notice or other communication to the
Insurer refers to an Event of Default, a claim on the Policy
or with respect to which failure on the part of the Insurer
to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other
communication should also be sent to the attention of each
of the general counsel and the Insurer and shall be marked
to indicate "URGENT MATERIAL ENCLOSED.")
(b) To the Depositor:
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-17XS
Confirmation: (000) 000-0000
(c) To the Master Servicer and the Securities Administrator:
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Client Manager, MSM 2006-17XS
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
(d) To the Trustee:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Global Securities and Trust Services MSM 2006-17XS
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
(e) To the Seller:
22
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-17XS
Section 6.03. Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate
or render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect
in any way the ability of any such party to pursue any other remedy available
to it.
Section 6.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED and THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED,
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE
OF LAW PROVISIONS.
Section 6.05. Consent to Jurisdiction and Venue, Etc. The parties hereto
irrevocably (i) agree that any suit, action or other legal proceeding arising
out of or relating to this Agreement may be brought in a court of record in
the Borough of Manhattan, City of New York, State of New York or in the Courts
of the United States of America located in such state, (ii) consent to the
jurisdiction of each such court in any such suit, action or proceeding and
(iii) waive any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum.
Nothing in this Section 6.05 shall limit or affect the right of the
Insurer to serve legal process in any manner permitted by law or to start
legal proceedings relating to any Transaction Document against any party
hereto or its or their respective property in the courts of any jurisdiction.
Section 6.06. Consent of Insurer. In the event that the Insurer's
consent is required under any of the Transaction Documents, it is understood
and agreed that, except as otherwise provided expressly herein or therein, the
determination whether to grant or withhold such consent shall be made solely
by the Insurer in its absolute discretion. The Insurer hereby agrees that it
will respond to any request for consent in a timely manner, taking into
consideration the business of the Depositor.
Section 6.07. Counterparts. This Agreement may be executed in
counterparts by the parties hereto and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 6.08. Headings. The headings of Articles, Sections and the Table
of Contents contained in this Agreement are provided for convenience only.
They form no part of this
23
Agreement and shall not affect its construction or interpretation. All
references to Articles and Sections of this Agreement refer to the
corresponding Articles and Sections of this Agreement.
Section 6.09. WAIVER OF TRIAL BY JURY. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER
THINGS, THIS WAIVER.
Section 6.10. Entire Agreement. The Transaction Documents and the Policy
set forth the entire agreement between the parties with respect to the subject
matter thereof and this Agreement supersedes and replaces any agreement or
understanding that may have existed between the parties prior to the date
hereof in respect of such subject matter.
Section 6.11. Third Party Beneficiary. Each of the parties hereto
acknowledges that the Insurer shall be an express third party beneficiary of
each of the Transaction Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above mentioned.
MBIA INSURANCE CORPORATION
By: /s/ XXXXXXXXX XXXXXX XXXXXXXXXX
---------------------------------
Title: Assistant Secretary
XXXXXX XXXXXXX CAPITAL I INC., as
Depositor
By: /s/ XXXXXXX XXX
---------------------------------
Title: VICE PRESIDENT
---------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC., as
Seller
By: /s/ XXXXXXX XXX
---------------------------------
Title: VICE PRESIDENT
---------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and as Securities
Administrator
By: /s/ XXXXXXXX XXXXX
---------------------------------
Title: VICE PRESIDENT
---------------------------------
LASALLE BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ XXXXX X. XXXX
---------------------------------
Title: ASSISTANT VICE PRESIDENT
---------------------------------
