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STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
Depositor
XXXXXXXXX MORTGAGE HOME LOANS, INC.,
Seller
XXXXX FARGO BANK, N.A.,
Master Servicer and
Securities Administrator
WILMINGTON TRUST COMPANY,
Delaware Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Trustee and Custodian
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2006
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Xxxxxxxxx Mortgage Securities Trust 2006-5
Mortgage Loan Pass-Through Certificates, Series 2006-5
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS; DECLARATION OF TRUST.............................. 4
SECTION 1.01. Defined Terms............................................. 4
SECTION 1.02. Accounting................................................ 42
ARTICLE IA ORGANIZATION OF TRUST......................................... 42
Section 1A.01. Name of Trust............................................. 42
Section 1A.02. Office.................................................... 42
Section 1A.03. Declaration of Trust...................................... 42
Section 1A.04. Purpose and Powers........................................ 43
Section 1A.05. Liability of the Certificateholders....................... 43
Section 1A.06. Title To Trust Property................................... 43
Section 1A.07. Situs of Trust............................................ 43
Section 1A.08. The Delaware Trustee...................................... 43
Section 1A.09 Separateness Provisions................................... 45
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.......................................................... 46
SECTION 2.01. Conveyance of Mortgage Loans.............................. 46
SECTION 2.02. Acceptance by Trustee..................................... 51
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the
Seller................................................. 52
SECTION 2.04. Representations and Warranties of the Seller with Respect
to the Mortgage Loans.................................. 55
SECTION 2.05. [Reserved]................................................ 56
SECTION 2.06. Representations and Warranties of the Depositor........... 56
SECTION 2.07. Issuance of Certificates.................................. 58
SECTION 2.08. Representations and Warranties of the Seller.............. 58
SECTION 2.09. Covenants of the Seller................................... 59
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS........... 60
SECTION 3.01. Master Servicer to Service and Administer the Mortgage
Loans.................................................. 60
SECTION 3.02. REMIC-Related Covenants................................... 61
SECTION 3.03. Monitoring of Servicers................................... 61
SECTION 3.04. Fidelity Bond............................................. 64
SECTION 3.05. Power to Act; Procedures.................................. 64
SECTION 3.06. Due-on-Sale Clauses; Assumption Agreements................ 65
SECTION 3.07. Release of Mortgage Files................................. 65
SECTION 3.08. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trust.......................... 66
SECTION 3.09. Standard Hazard Insurance and Flood Insurance Policies.... 67
SECTION 3.10. Presentment of Claims and Collection of Proceeds.......... 67
i
SECTION 3.11. Maintenance of the Primary Insurance Policies............. 68
SECTION 3.12. Trustee to Retain Possession of Certain Insurance
Policies and Documents................................. 68
SECTION 3.13. Realization Upon Defaulted Mortgage Loans................. 68
SECTION 3.14. Additional Compensation to the Master Servicer............ 69
SECTION 3.15. REO Property.............................................. 69
SECTION 3.16. Assessments of Compliance and Attestation Reports......... 70
SECTION 3.17. Annual Compliance Statement............................... 72
SECTION 3.18. Xxxxxxxx-Xxxxx Certification.............................. 73
SECTION 3.19. Reports Filed with Securities and Exchange Commission..... 73
SECTION 3.20. Additional Information.................................... 79
SECTION 3.21. Intention of the Parties and Interpretation............... 79
SECTION 3.22. Indemnification........................................... 80
SECTION 3.23. Amendments to Master Servicing Guide and Correspondent
Sellers Guide.......................................... 80
SECTION 3.24. UCC....................................................... 81
SECTION 3.25. Optional and Required Purchases of Certain Mortgage
Loans.................................................. 81
SECTION 3.26. Realization upon Troubled Mortgage Loans.................. 82
SECTION 3.27. Closing Certificate and Opinion........................... 82
SECTION 3.28. Liabilities of the Master Servicer........................ 82
SECTION 3.29. Merger or Consolidation of the Master Servicer............ 83
SECTION 3.30. Indemnification of the Trustee, the Delaware Trustee, the
Master Servicer and the Securities Administrator....... 83
SECTION 3.31. Limitations on Liability of the Master Servicer and
Others; Indemnification of Trustee and Others.......... 84
SECTION 3.32. Master Servicer Not to Resign............................. 85
SECTION 3.33. Successor Master Servicer................................. 85
SECTION 3.34. Sale and Assignment of Master Servicing................... 86
SECTION 3.35. Reporting Requirements of the Commission.................. 86
ARTICLE IV ACCOUNTS...................................................... 87
SECTION 4.01. Servicing Accounts........................................ 87
SECTION 4.02. Distribution Account...................................... 88
SECTION 4.03. Permitted Withdrawals and Transfers from the Distribution
Account................................................ 90
ARTICLE V FLOW OF FUNDS.................................................. 92
SECTION 5.01. Distributions............................................. 92
SECTION 5.02. [Reserved]................................................ 95
SECTION 5.03. Allocation of Realized Losses............................. 95
SECTION 5.04. Statements................................................ 96
SECTION 5.05. Remittance Reports; Advances.............................. 99
SECTION 5.06. Compensating Interest Payments............................ 100
SECTION 5.07. [Reserved]................................................ 100
SECTION 5.08. [Reserved]................................................ 100
SECTION 5.09. Yield Maintenance Account................................. 100
SECTION 5.10. Recoveries................................................ 101
ii
ARTICLE VI THE CERTIFICATES.............................................. 101
SECTION 6.01. The Certificates.......................................... 101
SECTION 6.02. Registration of Transfer and Exchange of Certificates..... 102
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates......... 109
SECTION 6.04. Persons Deemed Owners..................................... 109
SECTION 6.05. Appointment of Paying Agent............................... 109
SECTION 6.06. Optional Purchase of Certificates......................... 110
ARTICLE VII DEFAULT...................................................... 111
SECTION 7.01. Event of Default.......................................... 111
SECTION 7.02. Trustee to Act............................................ 114
SECTION 7.03. Waiver of Event of Default................................ 115
SECTION 7.04. Notification to Certificateholders........................ 115
ARTICLE VIII THE TRUSTEE AND THE SECURITIES ADMINISTRATOR................ 116
SECTION 8.01. Duties of Trustee and Securities Administrator............ 116
SECTION 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator.......................................... 117
SECTION 8.03. Trustee and the Securities Administrator Not Liable for
Certificates, Mortgage Loans or Additional Collateral.. 119
SECTION 8.04. Trustee, Custodian, Delaware Trustee, Master Servicer and
Securities Administrator May Own Certificates.......... 120
SECTION 8.05. Trustee's, Delaware Trustee's and Securities
Administrator's Fees and Expenses...................... 120
SECTION 8.06. Eligibility Requirements for Trustee and Securities
Administrator.......................................... 121
SECTION 8.07. Resignation or Removal of Trustee and Securities
Administrator.......................................... 121
SECTION 8.08. Successor Trustee and Successor Securities Administrator.. 122
SECTION 8.09. Merger or Consolidation of Trustee or Securities
Administrator.......................................... 123
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee............. 123
SECTION 8.11. Limitation of Liability................................... 124
SECTION 8.12. Trustee May Enforce Claims Without Possession of
Certificates........................................... 125
SECTION 8.13. Suits for Enforcement..................................... 125
SECTION 8.14. Waiver of Bond Requirement................................ 126
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement............................................ 126
SECTION 8.16. Appointment of Custodians................................. 126
SECTION 8.17. Auction Administration Agreement; Auction Swap Agreement.. 126
ARTICLE IX REMIC ADMINISTRATION.......................................... 127
SECTION 9.01. REMIC Administration...................................... 127
SECTION 9.02. Prohibited Transactions and Activities.................... 129
ARTICLE X TERMINATION.................................................... 130
SECTION 10.01. Termination............................................... 130
SECTION 10.02. Additional Termination Requirements....................... 131
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ARTICLE XI DISPOSITION OF TRUST ASSETS................................... 132
SECTION 11.01. Disposition of Trust Assets............................... 132
ARTICLE XII MISCELLANEOUS PROVISIONS..................................... 132
SECTION 12.01. Amendment................................................. 132
SECTION 12.02. Recordation of Agreement; Counterparts.................... 134
SECTION 12.03. Limitation on Rights of Certificateholders................ 134
SECTION 12.04. Governing Law; Jurisdiction............................... 135
SECTION 12.05. Notices................................................... 135
SECTION 12.06. Severability of Provisions................................ 136
SECTION 12.07. Article and Section References............................ 136
SECTION 12.08. Notice to the Rating Agencies............................. 136
SECTION 12.09. Further Assurances........................................ 137
SECTION 12.10. Benefits of Agreement..................................... 137
SECTION 12.11. Acts of Certificateholders................................ 137
SECTION 12.12. Successors and Assigns.................................... 138
SECTION 12.13. Derivative Transactions................................... 138
EXHIBITS AND SCHEDULES:
Exhibit A Form of Senior Certificate................................... A-1
Exhibit B Form of Class A-X Certificate................................ B-1
Exhibit C Form of Class A-R Certificate................................ C-1
Exhibit D Form of Subordinate Certificate.............................. D-1
Exhibit E Form of Reverse of the Certificates.......................... E-1
Exhibit F Request for Release.......................................... F-1
Exhibit G-1 Form of Receipt of Mortgage Note............................. G-1-1
Exhibit G-2 Form of Interim Certificate of Trustee....................... G-2-1
Exhibit G-3 Form of Final Certification of Trustee....................... G-3-1
Exhibit H Form of Lost Note Affidavit.................................. H-1
Exhibit I Form of ERISA Representation................................. I-1
Exhibit J-1 Form of Investment Letter [Non-Rule 144A].................... X-0-0
Xxxxxxx X-0 Form of Rule 144A Investment Letter.......................... J-2-1
Exhibit K Form of Transferor Certificate............................... K-1
Exhibit L Transfer Affidavit for Class A-R Certificate Pursuant to
Section 6.02(e)........................................... L-1
Exhibit M Form of Certificate of Trust................................. M-1
Exhibit N List of Servicers and Servicing Agreements................... N-1
Exhibit O Notice of Exercise of Optional Securities Purchase Right..... O-1
Exhibit P [Reserved]................................................... P-1
Exhibit Q Servicing Criteria........................................... Q-1
Exhibit R Additional Form 10-D Disclosure.............................. R-1
Exhibit S Additional Form 10-K Disclosure.............................. S-1
Exhibit T Form 8-K Disclosure Information.............................. T-1
Exhibit U Form of Additional Disclosure Notification................... U-1
iv
Schedule I Mortgage Loan Schedule
v
This Pooling and Servicing Agreement is dated as of August 1, 2006
(the "AGREEMENT"), among STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., a
Delaware corporation, as depositor (the "DEPOSITOR"), XXXXXXXXX MORTGAGE HOME
LOANS, INC., a Delaware corporation, as seller (the "SELLER"), XXXXX FARGO BANK,
N.A., a national banking association, as master servicer (in such capacity, the
"MASTER SERVICER") and as securities administrator (in such capacity, the
"SECURITIES ADMINISTRATOR"), WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as Delaware trustee (the "DELAWARE TRUSTEE") and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, as trustee (in such
capacity, the "TRUSTEE") and custodian (in such capacity, the "CUSTODIAN").
PRELIMINARY STATEMENT:
On August 24, 2006 the Depositor formed Xxxxxxxxx Mortgage Securities
Trust 2006-5, as a Delaware statutory trust (the "Trust") pursuant to (i) the
Trust Agreement, dated as of August 24, 2006 (the "ORIGINAL TRUST AGREEMENT"),
among the Depositor, the Trustee and the Delaware Trustee and (ii) a Certificate
of Trust filed with the Secretary of State of the State of Delaware on August
24, 2006.
The parties to this Agreement desire to amend and restate the Original
Trust Agreement in its entirety, and, as evidenced by their signatures hereto,
the Original Trust Agreement is hereby amended, restated and replaced in its
entirety as of the date first written above by this Agreement.
Through this Agreement, the Depositor intends to cause the issuance
and sale of the Trust's Mortgage Pass-Through Certificates, Series 2006-5 (the
"CERTIFICATES") representing in the aggregate the entire beneficial ownership of
the Trust, the primary assets of which are the Mortgage Loans (as defined
below).
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. On the Closing Date, the Depositor will sell the Mortgage
Loans and certain other property to the Trust and receive in consideration
therefor Certificates evidencing the entire beneficial ownership of the Trust.
The Depositor intends to sell the Certificates, to be issued hereunder
in multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Trust. The Certificates will consist of ten classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class A-X Certificates, (iv) the Class A-R Certificate,
(v) the Class B-1 Certificates, (vi) the Class B-2 Certificates, (vii) the Class
B-3 Certificates, (viii) the Class B-4 Certificates, (ix) the Class B-5
Certificates and (x) the Class B-6 Certificates.
For federal income tax purposes, the Trust Fund (exclusive of the
Additional Collateral, the Yield Maintenance Agreement, the Auction Swap
Agreement and the Yield Maintenance Account, collectively, the "EXCLUDED TRUST
ASSETS") is comprised of two REMICs in a tiered REMIC structure - the lower Tier
REMIC (the "LOWER TIER REMIC") and the upper tier REMIC (the "UPPER TIER
REMIC"). Each Certificate, other than the Class A-R Certificate, shall represent
ownership of a regular interest in the Upper-Tier REMIC, as described herein. In
addition, the Class A-1 and Class A-2 Certificates represent the right to
receive payments from
the Yield Maintenance Account as provided in Section 5.09. The Class A-R
Certificate represents ownership of the sole class of residual interest in each
REMIC. The Holders of the Class A-1 and Class A-2 Certificates own the Yield
Maintenance Account for federal income tax purposes in proportion to their
respective Certificate Principal Balances.
The Lower Tier REMIC will hold as its assets all of the assets
constituting the Trust Fund (exclusive of the Excluded Trust Assets) and will
issue interests (the "LOWER TIER REGULAR INTERESTS") (which will be
uncertificated and will represent the regular interests in the Lower Tier REMIC)
and a residual interest (the "LT-R INTEREST" and, together with the Lower Tier
Regular Interests, the "LOWER TIER INTERESTS") which will also be uncertificated
and which will represent the sole class of residual interest in the Lower Tier
REMIC. The Trustee will hold the Lower Tier Regular Interests as assets of the
Upper Tier REMIC. The Certificates, other than the Class A-R Certificate, will
represent "regular interests" in the Upper Tier REMIC, and the Class A-R
Certificate, which will represent the sole class of "residual interest" in the
Upper Tier REMIC as well as ownership of the LT-R Interest.
For purposes of the REMIC Provisions, the startup day is the Closing
Date. All REMIC regular and residual interests created hereby will be retired on
or before the Latest Possible Maturity Date.
THE LOWER TIER REMIC
The following table specifies the designation, interest rate, and
initial principal amount for each Lower Tier Interest:
INITIAL CORRESPONDING
PRINCIPAL CLASS OF
DESIGNATION INTEREST RATE BALANCE CERTIFICATES
----------- ------------- --------- -------------
LT-A-1 (1) (2) X-0
XX-X-0 (1) (2) A-2
LT-B-1 (1) (2) B-1
LT-B-2 (1) (2) B-2
LT-B-3 (1) (2) B-3
LT-B-4 (1) (2) B-4
LT-B-5 (1) (2) B-5
LT-B-6 (1) (2) B-6
LT-R (1) (2) A-R
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(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these Lower Tier Interests will be a per annum
rate equal to the Net WAC of the Mortgage Loans.
(2) Each of these Lower Tier Interests shall have a principal balance initially
equal to the Class Certificate Principal Balance of its Corresponding Class
of Certificates as of the Closing Date.
On each Distribution Date, interest shall be distributed with respect
to the Lower Tier Interests based on the interest rates described above.
2
On each Distribution Date, principal shall be distributed concurrently
to the XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0 and LT-R
Interests until the principal balance of each such Lower Tier Regular Interest
equals the Class Certificate Principal Balance of its Corresponding Class of
Certificates immediately after such Distribution Date.
On each Distribution Date, Realized Losses shall be allocated among
the Lower Tier Regular Interests in the same manner that principal is
distributed among the Lower Tier Regular Interests.
UPPER TIER REMIC
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates comprising a regular interest in the REMIC created
hereunder, each of which, except for the Class A-R Certificate, is hereby
designated a REMIC regular interest in the Upper Tier REMIC for purposes of the
REMIC Provisions:
ORIGINAL CLASS CERTIFICATE
PRINCIPAL BALANCE OR CLASS PASS-THROUGH
CLASS CERTIFICATE NOTIONAL BALANCE RATE
--------- ------------------------------------- ------------
Class A-1 $2,340,859,000 (1)
Class A-2 $ 260,095,000 (1)
Class A-X $2,600,954,000 (notional) (1)
Class A-R $ 100 (1)
Class B-1 $ 34,930,000 (1)
Class B-2 $ 21,495,000 (1)
Class B-3 $ 12,091,000 (1)
Class B-4 $ 5,374,000 (1)
Class B-5 $ 4,030,000 (1)
Class B-6 $ 8,062,075 (1)
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(1) Calculated pursuant to the definition of "Pass-Through Rate." For purposes
of the REMIC Provisions, however, the Pass Through Rate for each of the
Auction Certificates, for each Distribution Date on or before the Auction
Distribution Date shall be treated as though it were subject to a cap equal
to the Net WAC.
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ARTICLE I
DEFINITIONS; DECLARATION OF TRUST
SECTION 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. All calculations of interest described
herein shall be made on the basis of an assumed 360-day year consisting of
twelve 30-day months unless otherwise indicated in this Agreement.
"ACCEPTED MASTER SERVICING PRACTICES": With respect to any Mortgage
Loan, as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage 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 Trustee
(as successor Master Servicer) or the Master Servicer (except in its capacity as
a Servicer or as a successor to another Servicer), or (y) as provided in the
applicable Servicing Agreement, to the extent applicable to any Servicer, but in
no event below the standard set forth in clause (x).
"ACCOUNT": The Distribution Account, each Servicing Account, the Yield
Maintenance Account, the Swap Proceeds Account and the Auction Proceeds Account,
as the context requires.
"ACCRUAL PERIOD": With respect to each Distribution Date and the Class
A-1 and Class A-2 Certificates, the period beginning on the prior Distribution
Date (or the Closing Date, in the case of the first Distribution Date) and
ending on the day immediately preceding such Distribution Date. Interest for
such Classes will be calculated based upon a 360-day year and the actual number
of days in each Accrual Period. With respect to each Distribution Date and any
Class of Lower Tier Regular Interests and the Class A-X and Class A-R
Certificates and the Subordinate Certificates, the calendar month prior to the
month of such Distribution Date. Interest for such Lower Tier Regular Interests
and such Classes will be calculated based upon a 360-day year consisting of
twelve 30-day months in each Accrual Period.
"ADDITIONAL COLLATERAL": With respect to any Additional Collateral
Mortgage Loan, the marketable securities or other assets subject to a security
interest pursuant to the related pledge agreement.
"ADDITIONAL COLLATERAL MORTGAGE LOAN": Each Mortgage Loan identified
as such in the Mortgage Loan Schedule and as to which Additional Collateral is
then required to be provided as security therefor.
"ADDITIONAL DISCLOSURE NOTIFICATION": As defined in Section 3.19(a).
"ADDITIONAL FORM 10-D DISCLOSURE": As defined in Section 3.19(a).
"ADDITIONAL FORM 10-K DISCLOSURE": As defined in Section 3.19(b).
4
"ADJUSTABLE RATE MORTGAGE LOANS": The Mortgage Loans identified as
such and as set forth on Schedule I hereto.
"ADJUSTMENT DATE": With respect to each Mortgage Loan, each adjustment
date on which the related Loan Rate changes pursuant to the related Mortgage
Note. The first Adjustment Date following the Cut-Off Date as to each Mortgage
Loan is set forth in the Mortgage Loan Schedule.
"ADVANCE": As to any Mortgage Loan or REO Property, any advance made
by the Master Servicer (including the Trustee in its capacity as successor
Master Servicer) in respect of any Distribution Date pursuant to Section 5.05.
"ADVERSE REMIC EVENT": Either (i) the loss of status as a REMIC,
within the meaning of Section 860D of the Code, for any group of assets
identified as a REMIC in the Preliminary Statement to this Agreement, or (ii)
the imposition of any tax, including the tax imposed under Section 860F(a)(1) on
prohibited transactions and the tax imposed under Section 860G(d) on certain
contributions to a REMIC, on any REMIC created hereunder to the extent such tax
would be payable from assets held as part of the Trust Fund.
"AFFILIATE": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For 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 "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"AGGREGATE SUBORDINATE PERCENTAGE": As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate of
the Class Certificate Principal Balances of the Classes of Subordinate
Certificates and the denominator of which is the Pool Balance for such
Distribution Date.
"AGREEMENT": This Pooling and Servicing Agreement, dated as of August
1, 2006, as amended, supplemented and otherwise modified from time to time.
"APPLICABLE CREDIT SUPPORT PERCENTAGE": As defined in Section 5.01(e).
"ASSIGNMENT": As to any Mortgage, an assignment of mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient,
under the laws of the jurisdiction in which the related Mortgaged Property is
located, to reflect or record the sale of such Mortgage.
"AUCTION ADMINISTRATOR": As defined in Section 8.17.
"AUCTION ADMINISTRATION AGREEMENT": The Auction Administration
Agreement dated as of August 31, 2006 between the Auction Swap Counterparty and
the Auction Administrator.
"AUCTION CALL": The exercise of the auction under the Auction
Administration Agreement and the Auction Swap Agreement on the Auction Call
Date.
5
"AUCTION CERTIFICATES": The Class A-1 and Class A-2 Certificates.
"AUCTION DISTRIBUTION DATE": The Distribution Date in August 2011.
"AUCTION PROCEEDS ACCOUNT": The account maintained by the Auction
Administrator pursuant to the Auction Administration Agreement and which shall
not be an asset of any REMIC.
"AUCTION SWAP AGREEMENT": The swap agreement dated August 31, 2006 by
and between the Auction Swap Counterparty and the Auction Administrator,
including the ISDA Master Agreement between the Auction Swap Counterparty and
the Auction Administrator, the schedule thereto and the related confirmation
External ID: 9336865 / Risk ID: 562350087), dated as of August 31, 2006.
"AUCTION SWAP COUNTERPARTY": Credit Suisse International.
"AVAILABLE FUNDS": As to any Distribution Date, an amount equal to (i)
the sum, without duplication, of (a) the aggregate of the Monthly Payments
received on or prior to the related Determination Date (excluding Monthly
Payments due in future Due Periods but received by the related Determination
Date) in respect of the Mortgage Loans, (b) Net Liquidation Proceeds, Insurance
Proceeds, Principal Prepayments (but not including Prepayment Penalty Amounts),
Recoveries and other unscheduled recoveries of principal and interest in respect
of the Mortgage Loans received during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of REO Properties for such
Distribution Date, (d) the aggregate of any amounts of Interest Shortfalls
(excluding for such purpose all shortfalls as a result of Relief Act Reductions)
paid by the Servicers pursuant to the related Servicing Agreements and
Compensating Interest Payments deposited in the Distribution Account for such
Distribution Date in respect of the Mortgage Loans, (e) the aggregate of the
Purchase Prices, Substitution Adjustments and amounts collected for purchases
pursuant to Sections 2.03 or 3.25 deposited in the Distribution Account during
the related Prepayment Period in respect of the Mortgage Loans, (f) the
aggregate of any Advances made by the Servicers and the Master Servicer for such
Distribution Date in respect of the Mortgage Loans, (g) the aggregate of any
Advances made by the Trustee (as successor Master Servicer) for such
Distribution Date pursuant to Section 7.02 hereof in respect of the Mortgage
Loans and (h) the Termination Price on the Distribution Date on which the Trust
is terminated; minus (ii) the sum of (w) the Expense Fees for such Distribution
Date in respect of the Mortgage Loans, (x) amounts in reimbursement for Advances
previously made in respect of the Mortgage Loans and other amounts as to which
the Servicers, the Trustee, the Securities Administrator and the Master Servicer
are entitled to be reimbursed pursuant to Section 4.03, (y) the amount payable
from funds of the Trust to the Trustee, the Delaware Trustee, the Master
Servicer, the Custodian or the Securities Administrator pursuant to Section
8.05, Section 3.30 and Section 3.31(c) and (z) amounts deposited in the
Distribution Account in error, in respect of the Mortgage Loans, in each case
without duplication. Notwithstanding the foregoing, with respect to the first
Distribution Date, Available Funds shall include the amount of $844,839.41,
deposited by the Seller on the Closing Date to cover interest on the first
Distribution Date with respect to certain Mortgage Loans which have first
payment dates to the Trust after September 1, 2006.
6
"BANKRUPTCY CODE": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"BASE VALUE": With respect to any Mortgage Loan for which Additional
Collateral has been pledged, the value of the Additional Collateral as
determined with respect to that Mortgage Loan in accordance with the applicable
underwriting guidelines.
"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 6.02 hereof). On the Closing
Date, all Classes of the Certificates other than the Physical Certificates shall
be Book-Entry Certificates.
"BUSINESS DAY": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Minnesota, the State of
Maryland, the State of Illinois, the State of New York or in the city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"CERTIFICATE": Any Regular Certificate or Residual Certificate.
"CERTIFICATE NOTIONAL BALANCE": With respect to the Notional
Certificates and any date of determination, the product of (i) the Class
Certificate Notional Balance of such Class and (ii) the applicable Percentage
Interest of such Certificate.
"CERTIFICATE OF TRUST": The certificate of trust filed with the
Delaware Secretary of State in respect of the Trust pursuant to Section 3810 of
the DSTS.
"CERTIFICATE OWNER": With respect to each Book-Entry Certificate, any
beneficial owner thereof and with respect to each Physical Certificate, the
Certificateholder thereof.
"CERTIFICATE PRINCIPAL BALANCE": With respect to each Certificate of a
given Class (other than the Class A-X Certificates) and any date of
determination, the product of (i) the Class Certificate Principal Balance of
such Class and (ii) the applicable Percentage Interest of such Certificate.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR": The register
maintained and registrar appointed pursuant to Section 6.02 hereof.
"CERTIFICATEHOLDER" or "HOLDER": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual
Certificate for any purpose hereof.
"CERTIFICATION PARTIES": As defined in Section 3.18.
"CERTIFYING PERSON": As defined in Section 3.18.
7
"CLASS": Collectively, Certificates that have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"CLASS A-1 CERTIFICATE": Any of the Class A-1 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit A, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS A-2 CERTIFICATE": Any of the Class A-2 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit A, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS A-R CERTIFICATE": The Class A-R Certificate as designated on
the face thereof, executed by the Securities Administrator, and authenticated
and delivered by the Certificate Registrar, substantially in the form annexed
hereto as Exhibit C, evidencing the ownership of the sole class of "residual
interests" in the Upper Tier REMIC created hereunder as well as ownership of the
Class LT-R Interest and representing the right to distributions as set forth
herein and therein.
"CLASS A-X CERTIFICATE": Any of the Class A-X Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit B, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS B-1 CERTIFICATE": Any of the Class B-1 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS B-2 CERTIFICATE": Any of the Class B-2 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS B-3 CERTIFICATE": Any of the Class B-3 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
8
"CLASS B-4 CERTIFICATE": Any of the Class B-4 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS B-5 CERTIFICATE": Any of the Class B-5 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS B-6 CERTIFICATE": Any of the Class B-6 Certificates as
designated on the face thereof, executed by the Securities Administrator and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit D, evidencing the ownership of a "regular
interest" in the Upper Tier REMIC created hereunder and representing the right
to distributions as set forth herein and therein.
"CLASS CERTIFICATE NOTIONAL BALANCE": With respect to the Class A-X
Certificates and any Distribution Date on or prior to the Distribution Date in
August 2011, the sum of the Class Certificate Principal Balances of the Class
A-1 and Class A-2 Certificates immediately prior to such Distribution Date, and
after the Distribution Date in August 2011, zero.
"CLASS CERTIFICATE PRINCIPAL BALANCE": As to any Distribution Date,
with respect to any Class of Certificates (other than the Class A-X
Certificates), the Original Class Certificate Principal Balance as reduced by
the sum of (x) all amounts actually distributed in respect of principal of that
Class on all prior Distribution Dates, (y) all Realized Losses, if any, actually
allocated to that Class on all prior Distribution Dates and (z) in the case of
the Subordinate Certificates, any applicable Writedown Amount; provided,
however, that pursuant to Section 5.10, the Class Certificate Principal Balance
of a Class of Certificates may be increased up to the amount of Realized Losses
previously allocated to such Class, in the event that there is a Recovery on a
Mortgage Loan, and the Certificate Principal Balance of any individual
Certificate of such Class will be increased by its pro rata share of the
increase to such Class.
"CLASS SUBORDINATION PERCENTAGE": With respect to each Class of
Subordinate Certificates and any Distribution Date, the percentage equivalent of
a fraction the numerator of which is the Class Certificate Principal Balance of
such Class immediately before such Distribution Date and the denominator of
which is the aggregate of the Class Certificate Principal Balances of all
Classes of Certificates immediately before such Distribution Date.
"CLOSE OF BUSINESS": As used herein, with respect to any Business Day
and location, 5:00 p.m. at such location.
"CLOSING DATE": August 31, 2006.
"CODE": The Internal Revenue Code of 1986, as amended.
9
"COMMISSION": U.S. Securities and Exchange Commission.
"COMPENSATING INTEREST PAYMENT": With respect to any Distribution
Date, an amount equal to the amount, if any, by which (x) the aggregate amount
of any Interest Shortfalls (excluding for such purpose all shortfalls as a
result of Relief Act Reductions) required to be paid by the Servicers pursuant
to the related Servicing Agreement with respect to such Distribution Date,
exceeds (y) the aggregate amount actually paid by the Servicers in respect of
such shortfalls; provided, that such amount, to the extent payable by the Master
Servicer, shall not exceed the aggregate Master Servicing Fee that would be
payable to the Master Servicer in respect of such Distribution Date without
giving effect to any Compensating Interest Payment.
"CONVERTED MORTGAGE LOAN": Any Mortgage Loan as to which the Mortgagor
thereunder has exercised its right under the related Mortgage Note to convert
the adjustable Loan Rate thereon to a fixed Loan Rate.
"CONVERTED MORTGAGE LOAN SCHEDULE": With respect to each Distribution
Date, a schedule prepared by the Master Servicer pursuant to Section 3.05
listing each Convertible Mortgage Loan that has become a Converted Mortgage Loan
during the immediately preceding Due Period, and the Purchase Price for each
such Converted Mortgage Loan.
"CONVERTIBLE MORTGAGE LOAN": Any Mortgage Loan which, at the option of
the Mortgagor and in accordance with the terms of the related Mortgage Note, may
have the related Mortgage Rate converted from an adjustable rate to a fixed
rate.
"COOPERATIVE CORPORATION": The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
"COOPERATIVE LOAN": Any Mortgage Loan secured by Cooperative Shares
and a Proprietary Lease.
"COOPERATIVE LOAN DOCUMENTS": As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original or a
copy of the executed Security Agreement and the assignment of the Security
Agreement in blank; (iii) the original or a copy of the executed Proprietary
Lease and the original assignment of the Proprietary Lease endorsed in blank;
(iv) the original, if available, or a copy of the executed Recognition Agreement
and, if available, the original assignment of the Recognition Agreement (or a
blanket assignment of all Recognition Agreements) endorsed in blank; (v) the
executed UCC-1 financing statement with evidence of recording thereon, which has
been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) executed UCC Amendments
(or copies thereof) or other appropriate UCC financing statements required by
state law, evidencing a complete and unbroken line from the mortgagee to the
Trustee with evidence of recording thereon (or in a form suitable for
recordation).
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"COOPERATIVE PROPERTY": The real property and improvements owned by
the Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
"COOPERATIVE SHARES": Shares issued by a Cooperative Corporation.
"COOPERATIVE UNIT": A single family dwelling located in a Cooperative
Property.
"CORPORATE TRUST OFFICE": With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention:
Global Securities and Trust Services, Xxxxxxxxx 0000-0, or at such other address
as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor and the Seller. With respect to the Securities
Administrator and the Certificate Registrar and (i) presentment of Certificates
for registration of transfer, exchange or final payment, Xxxxx Fargo Bank,
National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Corporate Trust, Xxxxxxxxx Mortgage Securities Trust 2006-5,
and (ii) for all other purposes, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for
overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000),
Attention: Corporate Trust, Xxxxxxxxx Mortgage Securities Trust 2006-5.
"CORRESPONDENT SELLERS GUIDE": The Seller's Correspondent Sellers
Guide, revised September 15, 2005, as amended by Regulation AB Amendment dated
December 1, 2005 and as revised and/or amended from time to time.
"CORRESPONDING CLASS": With respect to each class of Lower Tier
Regular Interests, the Class or Classes of Certificates corresponding to such
class as set forth in the Preliminary Statement.
"CUSTODIAN": LaSalle Bank National Association, and its successors
acting as custodian of the Mortgage Files.
"CUT-OFF DATE": With respect to any Mortgage Loan other than a
Qualified Substitute Mortgage Loan or any Mortgage Loan originated after August
1, 2006, the Close of Business in New York City on August 1, 2006. With respect
to any Qualified Substitute Mortgage Loan, the date designated as such on the
Mortgage Loan Schedule (as amended). With respect to any Mortgage Loan
originated after August 1, 2006 but before the Closing Date, the date of
origination of such Mortgage Loan.
"CUT-OFF DATE AGGREGATE PRINCIPAL BALANCE": The aggregate of the
Cut-Off Date Principal Balances of the Mortgage Loans.
"CUT-OFF DATE PRINCIPAL BALANCE": With respect to any Mortgage Loan,
the principal balance thereof remaining to be paid, after application of all
scheduled principal payments due on or before the Cut-Off Date whether or not
received as of the Cut-Off Date (or as of the applicable date of substitution
with respect to a Qualified Substitute Mortgage Loan).
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"DEFINITIVE CERTIFICATES": Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 6.02(c) or (d) hereof.
"DELAWARE STATUTORY TRUST STATUTE" or "DSTS": As defined in Section
1A.03.
"DELAWARE TRUSTEE": Wilmington Trust Company, not in its individual
capacity but solely as trustee, and its successors and assigns.
"DELETED MORTGAGE LOAN": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"DELINQUENT": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the succeeding Due Date.
"DEPOSITOR": Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or any successor in interest.
"DEPOSITORY": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. 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 PARTICIPANT": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"DETERMINATION DATE": For any Distribution Date and each Mortgage
Loan, the date each month, as set forth in the related Servicing Agreement, on
which the related Servicer determines the amount of all funds required to be
remitted to the Master Servicer on the Servicer Remittance Date with respect to
the Mortgage Loans it is servicing.
"DISQUALIFIED ORGANIZATION": A "disqualified organization" defined in
Section 860E(e)(5) of the Code, or any other Person so designated by the Trustee
based upon an Opinion of Counsel provided to the Trustee by nationally
recognized counsel acceptable to the Trustee that the holding of an ownership
interest in the Residual Certificate by such Person may cause the Trust Fund or
any Person having an ownership interest in any Class of Certificates (other than
such Person) to incur liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the transfer of an ownership interest in
the Residual Certificate to such Person.
"DISTRIBUTION ACCOUNT": The trust account or accounts created and
maintained by the Securities Administrator pursuant to Section 4.02 hereof which
shall be entitled "Distribution Account, Xxxxx Fargo Bank, N.A., as Securities
Administrator for LaSalle Bank National Association, as Trustee, in trust for
the registered Holders of Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage
Pass-Through Certificates, Series 2006-5" and which must be an Eligible Account.
12
"DISTRIBUTION ACCOUNT INCOME": As to any Distribution Date, any
interest or other investment income earned on funds deposited in the
Distribution Account during the month of such Distribution Date.
"DISTRIBUTION DATE": The 25th day of the month, or, if such day is not
a Business Day, the next Business Day commencing in September 2006.
"DISTRIBUTION DATE STATEMENT": As defined in Section 5.04(a) hereof.
"DOCUMENT TRANSFER EVENT": The day on which (i) Xxxxx Fargo Bank, N.A.
or any successor thereto is no longer the servicer of any of the Mortgage Loans,
(ii) the senior, unsecured long-term debt rating of Xxxxx Fargo & Company
assigned by Fitch is less than "BBB-" or (iii) any Rating Agency requires Xxxxx
Fargo Bank, N.A., as Servicer to deliver the Retained Mortgage Files to the
Custodian.
"DUE DATE": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due, exclusive of any
days of grace.
"DUE PERIOD": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"ELIGIBLE ACCOUNT": Any of
(i) an account or accounts maintained with a federal or state
chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or
trust company that is the principal subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated in
the highest short term rating category of each Rating Agency at the time
any amounts are held on deposit therein;
(ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by it), the uninsured
deposits in which account are otherwise secured such that, as evidenced by
an Opinion of Counsel delivered to the Securities Administrator and the
Trustee and to each Rating Agency, the Trustee on behalf of
Certificateholders will have a claim with respect to the funds in the
account or a perfected first priority security interest against the
collateral (which shall be limited to Permitted Investments) securing those
funds that is superior to claims of any other depositors or creditors of
the depository institution with which such account is maintained;
(iii) an account or accounts maintained with the trust department
of a federal or state chartered depository institution, national banking
association or trust company acting in its fiduciary capacity; or
(iv) an account otherwise acceptable to each Rating Agency
without reduction or withdrawal of its then current ratings of the
Certificates as evidenced by a letter from such
13
Rating Agency to the Securities Administrator and the Trustee. Eligible
Accounts may bear interest.
"EMPLOYEE LOAN": Any Mortgage Loan identified as such in the Mortgage
Loan Schedule and which was originated by the Seller, which provides for an
increase in the Loan Rate thereof in the event of the change of employment of
the Mortgagor thereunder.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-QUALIFYING UNDERWRITING": A best efforts or firm commitment
underwriting or private placement that meets the requirements of the
Underwriter's Exemption.
"ERISA-RESTRICTED AUCTION CERTIFICATES": Any of the Class A-1 or Class
A-2 Certificates.
"ERISA-RESTRICTED CERTIFICATES": The Residual Certificate, the Class
B-4, Class B-5 and Class B-6 Certificates and any Certificate that does not
satisfy the applicable rating requirement under the Underwriter's Exemption.
"ESCROW PAYMENTS": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"EVENT OF DEFAULT": In respect of the Master Servicer, one or more of
the events (howsoever described) set forth in Section 7.01 hereof as an event or
events upon the occurrence and continuation of which the Master Servicer may be
terminated.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"EXPENSE FEE": With respect to any Mortgage Loan, the sum of (w) the
Retained Interest, if any, (x) the Master Servicing Fee and (y) the related
Servicing Fee with respect to the related Servicer.
"EXPENSE FEE RATE": With respect to any Mortgage Loan, the per annum
rate at which the Expense Fee accrues for such Mortgage Loan as set forth in the
Mortgage Loan Schedule.
"XXXXXX XXX": The Federal National Mortgage Association or any
successor thereto.
"FDIC": The Federal Deposit Insurance Corporation or any successor
thereto.
"FINAL RECOVERY DETERMINATION": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to or contemplated by Section 2.03, 3.25 and 10.01), a
determination made by the related Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which it expects to be
finally recoverable in respect thereof have been so recovered.
"FITCH": Fitch Ratings or any successor thereto.
14
"FIVE-YEAR HYBRID MORTGAGE LOANS": The Mortgage Loans identified as
such and as set forth on Schedule I hereto.
"FORM 8-K DISCLOSURE INFORMATION": As defined in Section 3.19(c).
"XXXXXXX MAC": The Federal Home Loan Mortgage Corporation or any
successor thereto.
"GROSS MARGIN": With respect to each Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the
applicable Index on each Adjustment Date in accordance with the terms of the
related Mortgage Note used to determine the Loan Rate for such Mortgage Loan.
"INDEMNIFIED PERSONS": The Trustee (individually in its corporate
capacity and in all capacities hereunder), the Delaware Trustee, the Master
Servicer, the Seller, the Depositor and the Securities Administrator (in all
capacities hereunder) and their officers, directors, agents and employees and,
with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
"INDEPENDENT": When used with respect to any accountants, a Person who
is "independent" within the meaning of Rule 2-01 of the Securities and Exchange
Commission' Regulation S.X. When used with respect to any other specified
Person, any such Person who (a) is in fact independent of the Depositor and its
Affiliates, (b) does not have any direct financial interest in or any material
indirect financial interest in the Depositor or any Affiliate thereof, (c) is
not connected with the Depositor or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions and (d) is not a member of the immediate family of a Person
defined in clause (b) or (c) above.
"INDEX": With respect to each Mortgage Loan and each Adjustment Date,
the index specified in the related Mortgage Note.
"INITIAL CERTIFICATE PRINCIPAL BALANCE": With respect to any
Certificate (other than the Class A-X Certificates), the amount designated
"Initial Certificate Principal Balance" on the face thereof.
"INITIAL CERTIFICATE NOTIONAL BALANCE": With respect to the Class A-X
Certificates, the amount designated "Initial Certificate Notional Balance" on
the face thereof.
"INITIAL LIBOR RATE": 5.33%
"INSURANCE PROCEEDS": With respect to any Mortgage Loan, proceeds of
any title policy, hazard policy or other insurance policy covering a Mortgage
Loan, to the extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the related Mortgagor in
accordance with the related Servicing Agreement.
15
"INTEREST DISTRIBUTABLE AMOUNT": With respect to any Distribution Date
and each Class of Certificates, the sum of (i) the Monthly Interest
Distributable Amount for that Class and (ii) the Unpaid Interest Shortfall
Amount for that Class.
"INTEREST SHORTFALL": With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or a reduction of its Monthly Payment under the Relief Act
or similar state or local law, an amount determined as follows:
(a) Principal Prepayments in part received during the relevant
Prepayment Period: the difference between (i) one month's interest at the
applicable Net Loan Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Loan Rate) received at the time of such prepayment; and
(b) Principal Prepayments in full received during the relevant
Prepayment Period: the difference between (i) one month's interest at the
applicable Net Loan Rate on the Stated Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Loan Rate)
received at the time of such prepayment; and
(c) any Relief Act Reductions for such Distribution Date.
"ITEM 1122 RESPONSIBLE PARTY": As defined in Section 3.22.
"LATEST POSSIBLE MATURITY DATE": As determined as of the Cut-Off Date,
the Distribution Date following the fifth anniversary of the scheduled maturity
date of the Mortgage Loan having the latest scheduled maturity date as of the
Cut-Off Date.
"LIBOR": With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the
Securities Administrator on the basis of the "Interest Settlement Rate" set by
the BBA for one-month United States dollar deposits, as such rates appear on the
Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination
Date.
(a) If on such a LIBOR Determination Date, the BBA's Interest
Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m.
(London time), or if the Telerate Page 3750 is not available on such date, the
Securities Administrator will obtain such rate from Reuters' "page LIBOR 01" or
Bloomberg's page "BBAM." If such rate is not published for such LIBOR
Determination Date, LIBOR for such date will be the most recently published
Interest Settlement Rate. In the event that the BBA no longer sets an Interest
Settlement Rate, the Securities Administrator will designate an alternative
index that has performed, or that the Securities Administrator expects to
perform, in a manner substantially similar to the BBA's Interest Settlement
Rate. The Securities Administrator will select a particular index as the
alternative index only if it receives an Opinion of Counsel, which opinion shall
be an expense reimbursed from the Distribution Account, that the selection of
such index will not cause any REMIC created hereunder to lose its classification
as a REMIC for federal income tax purposes.
16
(b) The establishment of LIBOR by the Securities Administrator and the
Securities Administrator's subsequent calculation of the Pass-Through Rate
applicable to the Class A-1, Class A-2 and Class A-X Certificates for the
relevant Accrual Period, in the absence of manifest error, will be final and
binding.
"LIBOR BUSINESS DAY": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.
"LIBOR DETERMINATION DATE": The second LIBOR Business Day immediately
preceding the commencement of each Accrual Period for the Class A-1 and Class
A-2 Certificates.
"LIQUIDATED MORTGAGE LOAN": As to any Distribution Date, any Mortgage
Loan in respect of which the related Servicer or the Master Servicer has
determined, in accordance with the servicing procedures specified herein, as of
the end of the related Prepayment Period, that all Liquidation Proceeds that it
expects to recover with respect to the liquidation of such Mortgage Loan or
disposition of the related REO Property have been recovered.
"LIQUIDATION EVENT": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated hereunder. With respect to any REO Property,
either of the following events: (i) a Final Recovery Determination is made as to
such REO Property; or (ii) such REO Property is removed from the Trust Fund by
reason of its being sold or purchased pursuant to Section 10.01 hereof or the
applicable provisions of the related Servicing Agreement.
"LIQUIDATION EXPENSES": With respect to a Mortgage Loan in
liquidation, unreimbursed expenses paid or incurred by or for the account of the
Master Servicer or the related Servicers, such expenses including (a) property
protection expenses, (b) property sales expenses, (c) foreclosure and sale
costs, including court costs and reasonable attorneys' fees, and (d) similar
expenses reasonably paid or incurred in connection with liquidation.
"LIQUIDATION PROCEEDS": With respect to any Mortgage Loan, the amount
(other than amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the related Servicer as proceeds from the
liquidation of such Mortgage Loan, as determined in accordance with the
applicable provisions of the related Servicing Agreement, other than Recoveries;
provided that (i) with respect to any Mortgage Loan or REO Property repurchased,
substituted or sold pursuant to or as contemplated hereunder, or pursuant to the
applicable provisions of the related Servicing Agreement, "Liquidation Proceeds"
shall also include amounts realized in connection with such repurchase,
substitution or sale and (ii) with respect to a defaulted Additional Collateral
Mortgage Loan, "Liquidation Proceeds" shall also include the amount realized on
the related Additional Collateral.
"LOAN RATE": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note.
17
"LOAN-TO-COLLATERAL VALUE RATIO": With respect to each Mortgage Loan
and any date of determination, a fraction, expressed as a percentage, the
numerator of which is the Principal Balance of the Mortgage Loan at such date of
determination less the Base Value of any related Additional Collateral and the
denominator of which is the Value of the related Mortgaged Property.
"LOAN-TO-VALUE RATIO": With respect to each Mortgage Loan and any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the Principal Balance of the Mortgage Loan at such date of determination and
the denominator of which is the Value of the related Mortgaged Property.
"LOST NOTE AFFIDAVIT": With respect to any Mortgage Loan as to which
the original Mortgage Note has been lost or destroyed and has not been replaced,
an affidavit from the Seller certifying that the original Mortgage Note has been
lost, misplaced or destroyed (together with a copy of the related Mortgage Note
and indemnifying the Trust against any loss, cost or liability resulting from
the failure to deliver the original Mortgage Note) in the form of Exhibit H
hereto.
"LOWER TIER REGULAR INTEREST": As described in the Preliminary
Statement.
"LOWER TIER INTEREST": As described in the Preliminary Statement.
"LOWER TIER REMIC": As described in the Preliminary Statement.
"LT-R INTEREST": As described in the Preliminary Statement.
"MAJORITY CERTIFICATEHOLDERS": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"MASTER SERVICER": Xxxxx Fargo Bank, N.A., or any successor Master
Servicer appointed as herein provided.
"MASTER SERVICING FEE": As to any Distribution Date and each related
Mortgage Loan, an amount equal to the product of the applicable Master Servicing
Fee Rate and the outstanding Principal Balance of such Mortgage Loan as of the
first day of the related Due Period. The Master Servicing Fee for any Mortgage
Loan shall be payable in respect of any Distribution Date solely from the
interest portion of the Monthly Payment or other payment or recovery with
respect to such Mortgage Loan.
"MASTER SERVICING FEE RATE": 0.0025% per annum.
"MASTER SERVICING GUIDE": Xxxxx Fargo Conduit and Norwest Conduit
Servicing Guide, dated January 1997, as amended through January 31, 2006.
"MAXIMUM LOAN RATE": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Loan Rate
thereunder.
18
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
"MERS MORTGAGE LOAN": Any Mortgage Loan registered with MERS on the
MERS System.
"MERS(R) SYSTEM": The system of recording transfers of mortgages
electronically maintained by MERS.
"MIN": The Mortgage Identification Number for any MERS Mortgage Loan.
"MODIFIABLE MORTGAGE LOAN": Any Mortgage Loan which, at the option of
the Mortgagor and in accordance with the terms of the related Mortgage Note, may
have the related Mortgage Rate modified to any adjustable rate or hybrid product
offered at the time by the related originator.
"MODIFIED MORTGAGE LOAN": Any Modifiable Mortgage Loan as to which the
related Mortgagor has exercised the right to modify the Mortgage Rate.
"MODIFIED MORTGAGE LOAN SCHEDULE": With respect to each Distribution
Date, a schedule prepared by the Master Servicer pursuant to Section 3.25
listing each Modifiable Mortgage Loan that has become a Modified Mortgage Loan
during the immediately preceding Due Period, and the Purchase Price for each
such Modified Mortgage Loan.
"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 INTEREST DISTRIBUTABLE AMOUNT": With respect to each Class of
Certificates and any Distribution Date, the amount of interest accrued during
the related Accrual Period at the related Pass-Through Rate on the Class
Certificate Principal Balance or Class Certificate Notional Balance, as
applicable, of that Class immediately prior to such Distribution Date.
"MONTHLY PAYMENT": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest on such Mortgage Loan that is
payable by the related Mortgagor from time to time under the related Mortgage
Note, determined, for the purposes of this Agreement: (a) after giving effect to
any reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act or similar state or local law; (b) without giving
effect to any extension granted or agreed to by the related Servicer pursuant to
the applicable provisions of the related Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
"MOODY'S": Xxxxx'x Investors Service, Inc. or any successor thereto.
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
19
"MORTGAGE FILE": The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"MORTGAGE LOAN": Each mortgage loan (including Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section
2.03(d) hereof as from time to time held as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"MORTGAGE LOAN POOL": The Mortgage Loans in the aggregate and any REO
Properties acquired in respect thereof.
"MORTGAGE LOAN PURCHASE AGREEMENT": The Mortgage Loan Purchase
Agreement between the Seller and the Depositor, dated as of August 1, 2006,
regarding the transfer of the Mortgage Loans by the Seller (including the
Seller's rights and interest in the agreements listed on Exhibit N hereto) to or
at the direction of the Depositor.
"MORTGAGE LOAN SCHEDULE": As of any date, the list of Mortgage Loans
included in the Trust Fund on such date, attached hereto as Schedule I. The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property
including the state and five-digit ZIP code;
(iv) a code indicating whether the Mortgaged Property
was represented by the borrower, at the time of
origination, as being owner-occupied;
(v) a code indicating whether the Residential Dwelling
constituting the Mortgaged Property is (a) a
detached single family dwelling, (b) a dwelling in
a planned unit development, (c) a condominium unit,
(d) a two- to four-unit residential property, (e) a
townhouse, (f) a cooperative or (g) other type of
Residential Dwelling;
(vi) if the related Mortgage Note permits the borrower
to make Monthly Payments of interest only for a
specified period of time, (a) the original number
of such specified Monthly Payments and (b) the
remaining number of such Monthly Payments as of the
Cut-Off Date;
(vii) the original months to maturity;
(viii) the stated remaining months to maturity from the
Cut-Off Date based on the original amortization
schedule;
20
(ix) the Loan-to-Value Ratio at origination;
(x) the value of any Additional Collateral at
origination;
(xi) the Loan-to-Collateral Value Ratio at origination;
(xii) the Loan Rate in effect immediately following the
Cut-Off Date;
(xiii) the date on which the first Monthly Payment is or
was due on the Mortgage Loan;
(xiv) the stated maturity date;
(xv) the Master Servicing Fee Rate and the Servicing Fee
Rate, if any;
(xvi) whether such loan is an Additional Collateral
Mortgage Loan or an Employee Loan;
(xvii) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal
Balance;
(xviii) the original principal balance of the Mortgage
Loan;
(xix) the Stated Principal Balance of the Mortgage Loan
on the Cut-Off Date and a code indicating the
purpose of the Mortgage Loan (i.e., purchase
financing, rate/term refinancing, cash-out
refinancing);
(xx) the Index and Gross Margin specified in related
Mortgage Note;
(xxi) the next Adjustment Date, if applicable;
(xxii) the Maximum Loan Rate, if applicable;
(xxiii) the Value of the Mortgaged Property;
(xxiv) the sale price of the Mortgaged Property, if
applicable;
(xxv) the product code;
(xxvi) Expense Fee Rate therefor;
(xxvii) the Servicer that is servicing such Mortgage Loan
and the originator of such Mortgage Loan; and
(xxviii) whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan, a Three-Year Hybrid Mortgage Loan, a
Five-Year Hybrid Mortgage Loan, a Seven-Year Hybrid
Mortgage Loan or a Ten-Year Hybrid Mortgage Loan.
21
Information set forth in clauses (ii) and (iii) above regarding each
Mortgagor and the related Mortgaged Property shall be confidential and the
Trustee (or Master Servicer) shall not disclose such information except to the
extent disclosure may be required by any law or regulatory or administrative
authority; provided, however, that the Trustee may disclose on a confidential
basis any such information to its agents, attorneys and any auditors in
connection with the performance of its responsibilities hereunder.
The Mortgage Loan Schedule, as in effect from time to time, shall also
set forth the following information with respect to the Mortgage Loans in the
aggregate as of the Cut-Off Date: (1) the number of Mortgage Loans; (2) the
current Principal Balance of the Mortgage Loans; (3) the weighted average Loan
Rate of the Mortgage Loans; and (4) the weighted average remaining months to
maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from
time to time by the Seller in accordance with the provisions of this Agreement.
"MORTGAGE NOTE": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"MORTGAGED PROPERTY": Either of (x) the fee simple or leasehold
interest in real property, together with improvements thereto including any
exterior improvements to be completed within 120 days of disbursement of the
related Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the
related Cooperative Shares and Proprietary Lease, securing the indebtedness of
the Mortgagor under the related Mortgage Loan.
"MORTGAGOR": The obligor on a Mortgage Note.
"NET INTEREST SHORTFALL": With respect to any Distribution Date, the
excess of the Interest Shortfall, if any, for such Distribution Date over the
sum of (i) Interest Shortfalls paid by the Servicers under the related Servicing
Agreements with respect to such Distribution Date and (ii) Compensating Interest
Payments made with respect to such Distribution Date.
"NET LIQUIDATION PROCEEDS": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, related Servicing
Advances, Master Servicing Fee, related Servicing Fees and any other accrued and
unpaid servicing fees received and retained in connection with the liquidation
of such Mortgage Loan or Mortgaged Property, and any related Retained Interest.
"NET LOAN RATE": With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of interest equal
to the then applicable Loan Rate for such Mortgage Loan minus the related
Servicing Fee Rate, Master Servicing Fee Rate and Retained Rate, if any.
"NET WAC": With respect to the Mortgage Loans and any Distribution
Date, the weighted average of the Net Loan Rates of the Mortgage Loans, as of
the first day of the related Due Period (or, in the case of the first
Distribution Date, as of the Cut-Off Date), weighted on the basis of their
related Stated Principal Balances as of the first day of the related Due Period
(or, in the case of the first Distribution Date, as of the Cut-Off Date).
22
"NONRECOVERABLE": The determination by the Master Servicer or the
related Servicer in respect of a delinquent Mortgage Loan that if it were to
make an Advance in respect of thereof, such amount would not be recoverable from
any collections or other recoveries (including Liquidation Proceeds) on such
Mortgage Loan.
"NOTIONAL CERTIFICATE": Any Class A-X Certificate.
"OFFICERS' CERTIFICATE": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Seller, the Master Servicer
or the Depositor, as applicable.
"ONE-MONTH LIBOR": The average of interbank offered rates for one
month U.S. dollar deposits in the London market based on quotations of major
banks.
"ONE-MONTH LIBOR INDEXED": Indicates a Mortgage Loan that has an
adjustable Loan Rate calculated on the basis of the One-Month LIBOR index.
"ONE-YEAR CMT": The weekly average yield on United States Treasury
securities adjusted to a constant maturity of one year as published by the
Federal Reserve Board in Statistical Release H.15(519).
"ONE-YEAR CMT INDEXED": Indicates a Mortgage Loan that has an
adjustable Loan Rate calculated on the basis of the One-Year CMT Index.
"ONE-YEAR LIBOR": The average of interbank offered rates for one-year
U.S. dollar deposits in the London market based on quotations of major banks.
"ONE-YEAR LIBOR INDEXED": Indicates a Mortgage Loan that has an
adjustable Loan Rate calculated on the basis of the One-Year LIBOR index.
"OPINION OF COUNSEL": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Seller, acceptable to
the Trustee or the Securities Administrator, as applicable, except that any
opinion of counsel relating to (a) the qualification of any REMIC created
hereunder as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"OPTIONAL SECURITIES PURCHASE DATE": The first Distribution Date that
the aggregate Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period is equal to or less than 20% of the Cut-off
Date Aggregate Principal Balance.
"OPTIONAL SECURITIES PURCHASE RIGHT": The right of TMI to purchase the
outstanding Certificates in accordance with Section 6.06.
23
"ORIGINAL APPLICABLE CREDIT SUPPORT PERCENTAGE": With respect to each
Class of Subordinate Certificates, the corresponding percentage set forth below
opposite its Class designation:
Class B-1 3.20%
Class B-2 1.90%
Class B-3 1.10%
Class B-4 0.65%
Class B-5 0.45%
Class B-6 0.30%
"ORIGINAL CLASS CERTIFICATE NOTIONAL BALANCE": With respect to each of
the Class A-X Certificates, the corresponding aggregate notional amount set
forth opposite the Class designation of such Class in the Preliminary Statement.
"ORIGINAL CLASS CERTIFICATE PRINCIPAL BALANCE": With respect to each
Class of Certificates other than the Notional Certificates, the corresponding
aggregate amount set forth opposite the Class designation of such Class in the
Preliminary Statement.
"ORIGINAL SUBORDINATED PRINCIPAL BALANCE": The aggregate of the
Original Class Certificate Principal Balances of the Classes of Subordinate
Certificates.
"ORIGINAL TRUST AGREEMENT": The Trust Agreement, dated as of August
24, 2006, among the Depositor, the Trustee and the Delaware Trustee.
"OTS": The Office of Thrift Supervision.
"OUTSTANDING MORTGAGE LOAN": As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero, that was not the subject of a
prepayment in full prior to such Due Date and that did not become a Liquidated
Mortgage Loan prior to such Due Date.
"OWNERSHIP INTEREST": As to any Certificate, any ownership or security
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, as owner or as pledgee.
"PASS-THROUGH RATE": With respect to each Class of Certificates and
any Distribution Date, the rate set forth below:
(i) The Pass-Through Rate for the Class A-1 Certificates with
respect to any Distribution Date on or before the Auction
Distribution Date shall be equal to the sum of LIBOR and
0.12% per annum. On each Distribution Date after the
Auction Distribution Date, the Pass-Through Rate of the
Class A-1 Certificates shall be a per annum rate equal to
the product of (i) the Net WAC, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period for
such Certificates.
24
(ii) The Pass-Through Rate for the Class A-2 Certificates with
respect to any Distribution Date on or before the Auction
Distribution Date shall be equal to the sum of LIBOR and
0.18% per annum. On each Distribution Date after the
Auction Distribution Date, the Pass-Through Rate of the
Class A-2 Certificates shall be a per annum rate equal to
the product of (i) the Net WAC, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period for
such Certificates.
(iii) The Pass-Through Rate of the Class A-X Certificates with
respect to any Distribution Date on or before the Auction
Distribution Date shall be equal to the excess, if any, of
(i) the Net WAC over (ii) the product of (a) the weighted
average of the Pass-Through Rates of the Class A-1 and
Class A-2 Certificates, weighted based on the Class
Certificate Principal Balance of each such Class
immediately before such Distribution Date and computed for
this purpose by assuming that the Pass-Through Rate on each
such Class was subject to a cap equal to the product of the
Net WAC and the quotient of 30 divided by the actual number
of days in the related Accrual Period, multiplied by (b)
the quotient of the actual number of days in the related
Accrual Period divided by 30. After the Auction
Distribution Date, the Pass-Through Rate of the Class A-X
Certificates shall equal an annual rate equal to zero. The
Class A-X Certificates will not be entitled to any interest
distributions on any Distribution Date after the Auction
Distribution Date.
(iv) The Pass-Through Rate for the Class A-R Certificates with
respect to any Distribution Date will be equal to the Net
WAC for that Distribution Date.
(v) The Pass-Through Rate for the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 and Class B-6 Certificates with
respect to any Distribution Date shall be equal to the Net
WAC for that Distribution Date.
"PAYING AGENT": Any paying agent appointed pursuant to Section 6.05
hereof.
"PCAOB": The Public Company Accounting Oversight Board.
"PERCENTAGE INTEREST": With respect to any Certificate other than a
Residual Certificate, a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Initial Certificate
Notional Balance, as applicable, represented by such Certificate and the
denominator of which is the Original Class Certificate Principal Balance or
Original Class Certificate Notional Balance, as applicable, of the related
Class. With respect to the Residual Certificate, 100%.
"PERMITTED INVESTMENTS": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:
25
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or the Master
Servicer or their agents acting in their respective commercial
capacities) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in one of the
two highest available rating categories of each Rating Agency and (B)
any other demand or time deposit or deposit which is fully insured by
the FDIC;
(iii) repurchase obligations with respect to any security
described in clause (i) above and entered into with a depository
institution or trust company (acting as principal) rated A or higher
by the Rating Agencies;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America, the District of Columbia or any State thereof and
that are rated by each Rating Agency in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations) that is rated
by each Rating Agency in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds (which may be 12b-1 funds, as
contemplated by the Commission under the Investment Company Act of
1940) registered under the Investment Company Act of 1940 including
funds managed or advised by the Trustee, the Master Servicer or an
affiliate thereof having the highest applicable rating from each
Rating Agency; and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to each
Rating Agency in writing as a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of
the Senior Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
26
"PERMITTED TRANSFEREE": Any Transferee of a Residual Certificate other
than a Disqualified Organization or a non-U.S. Person.
"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.
"PHYSICAL CERTIFICATES": The Residual Certificate.
"POOL BALANCE": As to any Distribution Date, the aggregate of the
Stated Principal Balances, as of the Close of Business on the first day of the
month preceding the month in which such Distribution Date occurs, of the
Mortgage Loans that were Outstanding Mortgage Loans on such date.
"PREPAYMENT PENALTY AMOUNT": With respect to any Mortgage Loan and
each Distribution Date, all premiums or charges, if any, paid by Mortgagors
under the related Mortgage Notes as a result of full or partial Principal
Prepayments collected by the applicable Servicer during the immediately
preceding Prepayment Period, but only to the extent required to be remitted to
the Master Servicer on the applicable Servicer Remittance Date under the terms
of the related Servicing Agreement.
"PREPAYMENT PERIOD": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"PRIMARY INSURANCE POLICY": Mortgage guaranty insurance, if any, on an
individual Mortgage Loan, as evidenced by a policy or certificate.
"PRINCIPAL BALANCE": As to any Mortgage Loan, other than a Liquidated
Mortgage Loan, and any day, the related Cut-Off Date Principal Balance, minus
all collections credited against the Principal Balance of such Mortgage Loan
after the Cut-Off Date. For purposes of this definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal Balance equal to the Principal Balance
of the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property.
"PRINCIPAL DISTRIBUTION AMOUNT": With respect to any Distribution
Date, the sum of (a) each scheduled payment of principal collected or advanced
on the Mortgage Loans by the related Servicer or the Master Servicer in respect
of the related Due Period, (b) that portion of the Purchase Price, representing
principal of any repurchased or purchased Mortgage Loan, deposited to the
Distribution Account during the related Prepayment Period, (c) the principal
portion of any Substitution Adjustments deposited in the Distribution Account
during the related Prepayment Period, (d) the principal portion of all Insurance
Proceeds received during the related Prepayment Period with respect to Mortgage
Loans that are not yet Liquidated Mortgage Loans, (e) the principal portion of
all Net Liquidation Proceeds received during the related Prepayment Period with
respect to Liquidated Mortgage Loans (other than Recoveries), (f) all Principal
Prepayments in part or in full on Mortgage Loans applied by the Servicers or the
Master Servicer
27
during the related Prepayment Period, (g) all Recoveries received during the
related Prepayment Period and (h) on the Distribution Date on which the Trust is
to be terminated pursuant to Section 10.01 hereof, that portion of the
Termination Price in respect of principal.
"PRINCIPAL PREPAYMENT": Any payment of principal made by the Mortgagor
on a Mortgage Loan that is received in advance of its scheduled Due Date and
that is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"PRIVATE CERTIFICATES": The Class B-4, Class B-5 and Class B-6
Certificates.
"PRIVATE PLACEMENT MEMORANDUM": The Private Placement Memorandum dated
August 29, 2006, relating to the initial sale of the Class B-4, Class B-5 and
Class B-6 Certificates.
"PRO RATA SHARE": As to any Distribution Date and any Class of
Subordinate Certificates, the portion of the Subordinate Principal Distribution
Amount allocable to such Class, equal to the product of the (a) Subordinate
Principal Distribution Amount on such date and (b) a fraction, the numerator of
which is the related Class Certificate Principal Balance of that Class and the
denominator of which is the aggregate of the Class Certificate Principal
Balances of all the Classes of Subordinate Certificates.
"PROPRIETARY LEASE": With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
"PROSPECTUS": The Prospectus Supplement, together with the
accompanying prospectus, dated March 28, 2006, relating to the Senior
Certificates and the Class B-1, Class B-2 and Class B-3 Certificates.
"PROSPECTUS SUPPLEMENT": That certain Prospectus Supplement, dated
August 29, 2006, relating to the initial sale of the Senior Certificates and the
Class B-1, Class B-2 and Class B-3 Certificates.
"PURCHASE PRICE": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.25 or
Section 10.01 hereof, and as confirmed by an Officers' Certificate from the
Seller to the Trustee, an amount equal to the sum of (i) 100% of the Principal
Balance thereof as of the date of purchase (or such other price as is provided
in Section 10.01), plus (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Principal Balance at the applicable Loan Rate from the Due Date
as to which interest was last covered by a payment by the Mortgagor through the
end of the calendar month in which the purchase is to be effected, and (y) an
REO Property, the sum of (1) accrued interest on such Principal Balance at the
applicable Loan Rate from the Due Date as to which interest was last covered by
a payment by the Mortgagor plus (2) REO Imputed Interest for such REO Property
for each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance Proceeds
and Liquidation Proceeds that as of the date of purchase had been distributed as
or to cover REO Imputed Interest, plus (iii) any unreimbursed
28
Servicing Advances and any unpaid Expense Fees allocable to such Mortgage Loan
or REO Property, plus (iv) in the case of a Mortgage Loan required to be
purchased pursuant to Section 2.03 hereof, any costs and damages incurred by the
Trust in connection with any violation by such Mortgage Loan of any predatory-
or abusive-lending laws.
"QUALIFIED INSURER": A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, so long as
the claims paying ability of which is acceptable to each Rating Agency for
pass-through certificates having the same ratings as the Certificates rated by
each Rating Agency as of the Closing Date. Any replacement insurer with respect
to a Mortgage Loan must have at least as high a claims paying ability rating as
the insurer it replaces had on the Closing Date.
"QUALIFIED SUBSTITUTE MORTGAGE LOAN": A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the Principal Balance of the Deleted Mortgage Loan as of the Due Date in
the calendar month during which the substitution occurs, (ii) have a maximum
loan rate not less than the Maximum Loan Rate of the Deleted Mortgage Loan,
(iii) have a gross margin equal to or greater than the Gross Margin of the
Deleted Mortgage Loan, (iv) have the same Index as the Deleted Mortgage Loan,
(v) have its next adjustment date not more than two months after the next
Adjustment Date of the Deleted Mortgage Loan, (vi) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (vii) be current as of the date of substitution, (viii)
have a Loan-to-Value Ratio and a Loan-to-Collateral Value Ratio as of the date
of substitution equal to or lower than the Loan-to-Value Ratio and the
Loan-to-Collateral Value Ratio, respectively, of the Deleted Mortgage Loan as of
such date, (ix) have been underwritten or re-underwritten in accordance with the
same or substantially similar underwriting criteria and guidelines as the
Deleted Mortgage Loan, (x) is of the same or better credit quality as the
Deleted Mortgage Loan and (xi) conform to each representation and warranty set
forth in Section 2.04 hereof applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the terms described in clause (vi)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratio and Loan-to-Collateral Value Ratio described
in clause (viii) hereof shall be satisfied as to each such mortgage loan and,
except to the extent otherwise provided in this sentence, the representations
and warranties described in clause (x) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
"RATING AGENCY": Each of Xxxxx'x and S&P and any respective successors
thereto. If Xxxxx'x, S&P or their respective successors shall no longer be in
existence, "Rating Agency" shall include such nationally recognized statistical
rating agency or agencies, or other
29
comparable Person or Persons, as shall have been designated by the Depositor,
notice of which designation shall be given to the Trustee and the Master
Servicer.
"REALIZED LOSS": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Liquidated Mortgage Loan.
"RECOGNITION AGREEMENT": With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
"RECORD DATE": With respect to each Distribution Date and the Class
A-1 and Class A-2 Certificates, the Business Day preceding the applicable
Distribution Date so long as such Certificates remain Book-Entry Certificates
and otherwise the Record Date shall be same as the other Classes of
Certificates. For each other Class of Certificates, the last Business Day of the
calendar month preceding the month in which such Distribution Date occurs.
"RECOVERY": With respect to any Distribution Date and a Mortgage Loan
that became a Liquidated Mortgage Loan in a month preceding the related
Prepayment Period to such Distribution Date and with respect to which the
related Realized Loss was allocated to one or more Classes of Certificates, an
amount received in respect of such Liquidated Mortgage Loan during the related
Prepayment Period, net of any reimbursable expenses.
"REFINANCING MORTGAGE LOAN": Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
"REGULAR CERTIFICATE": Any Class A-1, Class A-2, Class A-X, Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Certificate.
"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 clarifications and interpretations 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.
"RELEVANT SERVICING CRITERIA": The Servicing Criteria applicable to
each party, as set forth on Exhibit Q attached hereto and any similar exhibit
set forth in each Servicing Agreement in respect of each Servicer. Multiple
parties can have responsibility for the same Relevant Servicing Criteria. With
respect to a Servicing Function Participant engaged by the Master Servicer, the
Securities Administrator, the Trustee (in its capacity as Custodian) or each
Servicer, the term "Relevant Servicing Criteria" may refer to a portion of the
Relevant Servicing Criteria applicable to such parties.
"RELIEF ACT": The Servicemembers Civil Relief Act.
30
"RELIEF ACT REDUCTIONS": With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act or similar state or local law, the amount, if any,
by which (i) interest collectible on that Mortgage Loan during such Due Period
is less than (ii) one month's interest on the Stated Principal Balance of such
Mortgage Loan at the Loan Rate for such Mortgage Loan before giving effect to
the application of the Relief Act or similar state or local law.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC OPINION": An Independent Opinion of Counsel, to the effect that
the proposed action described therein would not cause an Adverse REMIC Event.
"REMIC PROVISIONS": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"REMITTANCE REPORT": The Master Servicer's Remittance Report to the
Securities Administrator providing information with respect to each Mortgage
Loan which is provided no later than the second Business Day following each
Determination Date and which shall contain such information as may be agreed
upon by the Master Servicer and the Securities Administrator and which shall be
sufficient to enable the Securities Administrator to prepare the related
Distribution Date Statement.
"RENTS FROM REAL PROPERTY": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO ACCOUNT": The account or accounts maintained by a Servicer in
respect of an REO Property pursuant to the related Servicing Agreement.
"REO DISPOSITION": The sale or other disposition of an REO Property on
behalf of the Trust.
"REO IMPUTED INTEREST": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Loan Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the Due
Date in such calendar month.
"REO PRINCIPAL AMORTIZATION": With respect to any REO Property, for
any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without limitation, that
portion of the Termination Price paid in connection with a purchase of all of
the Mortgage Loans and REO Properties pursuant to Section 10.01 hereof that is
allocable to such REO Property) or otherwise, net of any portion of such amounts
(i) payable
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pursuant to the applicable provisions of the related Servicing Agreement in
respect of the proper operation, management and maintenance of such REO Property
or (ii) payable or reimbursable to the applicable Servicer pursuant to the
applicable provisions of the related Servicing Agreement for unpaid Master
Servicing Fees and Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such
REO Property for such calendar month.
"REO PROPERTY": A Mortgaged Property acquired by the applicable
Servicer on behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in accordance with the applicable provisions of the related
Servicing Agreement.
"REPORTABLE EVENT": As defined in Section 3.19(c).
"REPORTING SERVICER": As defined in Section 3.19(b).
"REQUEST FOR RELEASE": A release signed by a Servicing Officer, in the
form of Exhibit F attached hereto.
"RESIDENTIAL DWELLING": Any one of the following: (i) a detached
one-family dwelling, (ii) a two- to four-family dwelling, (iii) a one-family
dwelling unit in a condominium project, (iv) a manufactured home, (v) a
cooperative unit or (vi) a detached one-family dwelling in a planned unit
development, none of which is a mobile home.
"RESIDUAL CERTIFICATE": The Class A-R Certificate.
"RESPONSIBLE OFFICER": When used with respect to the Trustee or the
Securities Administrator, any director, any vice president, any assistant vice
president, any associate assigned to the Corporate Trust Office (or similar
group) or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and, with
respect to a particular matter, to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RESTRICTED CLASSES": As defined in Section 5.01(e).
"RESTRICTED GLOBAL SECURITY": As defined in Section 6.01.
"RETAINED INTEREST": As to any Employee Loans originated by Xxxxxxxxx
and each Distribution Date, interest accrued on the Principal Balance thereof at
the Retained Rate.
"RETAINED INTEREST HOLDER": With respect to each Employee Loan, the
Seller or any successor in interest by assignment or otherwise.
"RETAINED MORTGAGE FILES": As to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items (iii), and (vi)
through (viii) following the definition of "Mortgage File" in Section 2.01 that
are to be delivered to the Trustee, as Custodian subsequent to a Document
Transfer Event.
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"RETAINED RATE": As of the Cut-off Date, and for each Due Period
thereafter, 0.00% per annum; provided, however, if the related Mortgagor of the
Employee Loan ceases to be an employee or a director of Xxxxxxxxx or its
Affiliates, the amount of the increase in the per annum rate set forth in the
related Mortgage Note.
"SARBANES OXLEY ACT": The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
"XXXXXXXX-XXXXX CERTIFICATION": A written certification covering the
activities of all Servicing Function Participants (excluding the Custodian) and
the Servicers and signed by an officer of the Master Servicer that complies with
(i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002 is
amended, (b) the Rules referred to in clause (ii) are modified or superseded by
any subsequent statement, rule or regulation of the Commission or any statement
of a division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Xxxxxxxx-Xxxxx Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
"SECURITIES ACT": The Securities Act of 1933, as amended and the rules
and regulations thereunder.
"SECURITIES ADMINISTRATOR": Xxxxx Fargo Bank, N.A., or its successor
in interest, or any successor securities administrator appointed as herein
provided.
"SECURITY AGREEMENT": With respect to any Cooperative Loan, the
agreement between the owner of the related Cooperative Shares and the originator
of the related Mortgage Note that defines the terms of the security interest in
such Cooperative Shares and the related Proprietary Lease.
"SELLER": Xxxxxxxxx, in its capacity as seller under this Agreement.
"SENIOR CERTIFICATE": Any one of the Class X-0, Xxxxx X-0, Class A-X
or Class A-R Certificates.
"SENIOR CERTIFICATEHOLDER": Any Holder of a Senior Certificate.
"SENIOR CREDIT SUPPORT DEPLETION DATE": The date on which the Class
Certificate Principal Balance of each Class of Subordinate Certificates has been
reduced to zero.
"SENIOR PERCENTAGE": With respect to any Distribution Date, the
percentage equivalent of a fraction (which shall not be greater than 100%) the
numerator of which is the aggregate of
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the Class Certificate Principal Balances of the Class or Classes of Senior
Certificates immediately prior to such Distribution Date and the denominator of
which is the Pool Balance for such Distribution Date.
"SENIOR PREPAYMENT PERCENTAGE": With respect to any Distribution Date
before September 2013, 100%. Except as provided herein, the Senior Prepayment
Percentage for any Distribution Date occurring on or after the seventh
anniversary of the first Distribution Date will be as follows: (i) from
September 2013 through August 2014, the Senior Percentage plus 70% of the
Subordinate Percentage for such Distribution Date; (ii) from September 2014
through August 2015, the Senior Percentage plus 60% of the Subordinate
Percentage for such Distribution Date; (iii) from September 2015 through August
2016, the Senior Percentage plus 40% of the Subordinate Percentage for such
Distribution Date; (iv) September 2016 through August 2017, the Senior
Percentage plus 20% of the Subordinate Percentage for such Distribution Date;
and (v) from and after September 2017, the Senior Percentage for such
Distribution Date; provided, however, that there shall be no reduction in the
Senior Prepayment Percentage on a Distribution Date, unless the Step Down
Conditions are satisfied with respect to such Distribution Date; and provided,
further, that if on any Distribution Date occurring on or after the Distribution
Date in September 2013, the Senior Percentage exceeds the initial Senior
Percentage, the Senior Prepayment Percentage for such Distribution Date will
again equal 100%.
Notwithstanding the above, (i) if on any Distribution Date prior to
September 2013 the Two Times Test is satisfied, the Senior Prepayment Percentage
will equal the Senior Percentage for such Distribution Date plus 50% of an
amount equal to 100% minus the Senior Percentage for such Distribution Date and
(ii) if on any Distribution Date in or after September 2009 the Two Times Test
is satisfied, the Senior Prepayment Percentage will equal the Senior Percentage
for such Distribution Date.
"SENIOR PRINCIPAL DISTRIBUTION AMOUNT": With respect to any
Distribution Date, the sum of:
(1) the Senior Percentage of all amounts described in clauses (a)
through (d) of the definition of "Principal Distribution Amount" for
such Distribution Date;
(2) with respect to each Mortgage Loan which became a Liquidated
Mortgage Loan during the related Prepayment Period, the lesser of
(x) the Senior Percentage of the Stated Principal Balance
of that Mortgage Loan; and
(y) the Senior Prepayment Percentage of the amount of the
Net Liquidation Proceeds allocable to principal
received with respect to that Mortgage Loan; and
(3) the Senior Prepayment Percentage of the amounts described in
clause (f) of the definition of "Principal Distribution Amount."
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"SERVICER": Each of the several primary servicers of the Mortgage
Loans as set forth in Exhibit N hereto and any successors thereto or replacement
therefor.
"SERVICER REMITTANCE DATE": With respect to each Mortgage Loan, the
18th day of each month, or the next Business Day if such 18th day is not a
Business Day or if provided in the related Servicing Agreement, the preceding
Business Day if such 18th day is not a Business Day.
"SERVICE(S)(ING)": In accordance with Regulation AB, the act of
servicing and administering the Mortgage Loans or any other assets of the Trust
by an entity that meets the definition of "servicer' set forth in Item 1101 of
Regulation AB and is subject to the disclosure requirements set forth in 1108 of
Regulation AB. Any uncapitalized occurrence of this term shall have the meaning
commonly understood by participants in the residential mortgage-backed
securitization market.
"SERVICING ACCOUNT": Any account established and maintained for the
benefit of the Master Servicer or the Trust by a Servicer with respect to the
related Mortgage Loans and any REO Property, pursuant to the terms of the
respective Servicing Agreement.
"SERVICING ADVANCES": With respect to any Servicer or the Master
Servicer (including the Trustee in its capacity as successor Master Servicer),
all customary, reasonable and necessary "out of pocket" costs and expenses
(including reasonable attorneys' fees and expenses) incurred by any Servicer or
the Master Servicer in the performance of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property and (iv) compliance with the obligations under
Article III hereof or the related Servicing Agreements.
"SERVICING AGREEMENT": The servicing agreements relating to the
Mortgage Loans as set forth in Exhibit N hereto, servicing arrangements for any
Mortgage Loans under the Seller's Correspondent Sellers Guide, and any other
servicing agreement entered into between a successor servicer and the Seller or
the Trustee on behalf of the Trust pursuant to the terms hereof.
"SERVICING CRITERIA": The criteria set forth in paragraph (d) of Item
1122 of Regulation AB, as such may be amended from time to time.
"SERVICING FEE": With respect to each Servicer and each Mortgage Loan
serviced by such Servicer and for any calendar month, the fee payable to such
Servicer determined pursuant to the related Servicing Agreement.
"SERVICING FEE RATE": With respect to each Mortgage Loan, the per
annum servicing fee rate set forth on the Mortgage Loan Schedule.
"SERVICING FUNCTION PARTICIPANT": Any Sub-Servicer or Subcontractor,
other than each Servicer, the Master Servicer, the Trustee, the Custodian and
the Securities Administrator, in each case that is participating in the
servicing function within the meaning of Regulation AB.
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"SERVICING OFFICER": Any officer of a Master Servicer or Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"SEVEN-YEAR HYBRID MORTGAGE LOANS": The Mortgage Loans set forth on
Schedule I hereto.
"SIGNIFICANT MODIFICATION": As defined in Section 3.25.
"SIGNIFICANT MODIFICATION LOAN": As defined in Section 3.25.
"SIX-MONTH LIBOR": The average of interbank offered rates for
six-month U.S. dollar deposits in the London market based on quotations of major
banks.
"SIX-MONTH LIBOR INDEXED": Indicates a Mortgage Loan that has an
adjustable Loan Rate calculated on the basis of the Six-Month LIBOR index.
"S&P": Standard & Poor's Rating Services (a division of The
XxXxxx-Xxxx Companies, Inc.).
"STARTUP DAY": As defined in Section 9.01(b) hereof.
"STATED PRINCIPAL BALANCE": With respect to any Mortgage Loan: (a) as
of the Distribution Date in September 2006, the Cut-Off Date Principal Balance
of such Mortgage Loan, (b) thereafter as of any date of determination up to and
including the Distribution Date on which the proceeds, if any, of a Liquidation
Event with respect to such Mortgage Loan would be distributed, the outstanding
principal balance of such Mortgage Loan as of the Cut-Off Date, as shown in the
Mortgage Loan Schedule, minus, in the case of each Mortgage Loan, the sum of (i)
the principal portion of each Monthly Payment due on a Due Date subsequent to
the Cut-Off Date, whether or not received, (ii) all Principal Prepayments
received after the Cut-Off Date, to the extent distributed pursuant to Section
5.01 before such date of determination and (iii) all Liquidation Proceeds and
Insurance Proceeds applied by the applicable Servicer as recoveries of principal
in accordance with the applicable provisions of the related Servicing Agreement,
to the extent distributed pursuant to Section 5.01 before such date of
determination; and (c) as of any date of determination subsequent to the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such Mortgage Loan would be distributed, zero. With respect to any
REO Property: (x) as of any date of determination up to and including the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, an amount (not less than
zero) equal to the Stated Principal Balance of the related Mortgage Loan as of
the date on which such REO Property was acquired on behalf of the Trust, minus
the aggregate amount of REO Principal Amortization in respect of such REO
Property for all previously ended calendar months, to the extent distributed
pursuant to Section 5.01 before such date of determination; and (y) as of any
date of determination subsequent to the Distribution Date on which the proceeds,
if any, of a Liquidation Event with respect to such REO Property would be
distributed, zero.
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"STEP DOWN CONDITIONS": As of any Distribution Date on which any
decrease in any Senior Prepayment Percentage may apply, (i) the outstanding
Principal Balance of all Mortgage Loans 60 days or more Delinquent (including
Mortgage Loans in REO and foreclosure), averaged over the preceding six month
period, as a percentage of the aggregate of the Class Certificate Principal
Balances of the Classes of Subordinate Certificates on such Distribution Date,
does not equal or exceed 50% and (ii) cumulative Realized Losses with respect to
all of the Mortgage Loans do not exceed:
o for any Distribution Date on or after the seventh anniversary
until the eighth anniversary of the first Distribution Date, 30%
of the aggregate Class Certificate Principal Balances of the
Subordinate Certificates as of the Closing Date,
o for any Distribution Date on or after the eighth anniversary
until the ninth anniversary of the first Distribution Date, 35%
of the aggregate Class Certificate Principal Balances of the
Subordinate Certificates as of the Closing Date,
o for any Distribution Date on or after the ninth anniversary until
the tenth anniversary of the first Distribution Date, 40% of the
aggregate Class Certificate Principal Balances of the Subordinate
Certificates as of the Closing Date,
o for any Distribution Date on or after the tenth anniversary until
the eleventh anniversary of the first Distribution Date, 45% of
the aggregate Class Certificate Principal Balances of the
Subordinate Certificates as of the Closing Date, and
o for any Distribution Date on or after the eleventh anniversary of
the first Distribution Date, 50% of the aggregate Class
Certificate Principal Balances of the Subordinate Certificates as
of the Closing Date.
"SUBCONTRACTOR": Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of any Servicer (or a
Sub-Servicer of any Servicer), the Master Servicer, the Trustee or the
Securities Administrator.
"SUBORDINATE CERTIFICATE": Any one of the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 or Class B-6 Certificates.
"SUBORDINATE PERCENTAGE": With respect to any Distribution Date, the
difference between 100% and the Senior Percentage for such Distribution Date.
"SUBORDINATE PREPAYMENT PERCENTAGE": With respect to any Distribution
Date, the difference between 100% and the Senior Prepayment Percentage for such
Distribution Date.
"SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT": With respect to any
Distribution Date, an amount equal to the sum of:
37
(1) the Subordinate Percentage of all amounts described in
clauses (a) through (d) of the definition of "Principal Distribution
Amount" for such Distribution Date;
(2) with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the related Prepayment Period, the amount of the
Net Liquidation Proceeds allocated to principal received with respect
thereto remaining after application thereof pursuant to clause (2) of
the definition of "Senior Principal Distribution Amount" for such
Distribution Date, up to the Subordinate Percentage of the Stated
Principal Balance of such Mortgage Loan; and
(3) the Subordinated Prepayment Percentage of all amounts
described in clause (f) of the definition of "Principal Distribution
Amount" for such Distribution Date;
"SUB-SERVICER": Any Person that (i) services Mortgage Loans on behalf
of any Servicer, the Master Servicer, the Securities Administrator, the Trustee
or the Custodian and (ii) is responsible for the performance (whether directly
or through sub-servicers or Subcontractors) of Servicing functions required to
be performed under this Agreement, any related Servicing Agreement or any
sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
"SUBSTITUTION ADJUSTMENT": As defined in Section 2.03(d) hereof.
"SWAP PROCEEDS ACCOUNT": The account maintained by the Auction
Administrator pursuant to the Auction Administration Agreement and which shall
not be an asset of any REMIC.
"TAX RETURNS": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of each of the REMICs created hereunder under the
REMIC Provisions, together with any and all other information reports or returns
that may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
"TELERATE PAGE 3750": The display currently so designated as "Page
3750" on the Bridge Telerate Service (or such other page selected by the Master
Servicer as may replace Page 3750 on that service for the purpose of displaying
daily comparable rates on prices).
"10-K FILING DEADLINE": As defined in Section 3.19(b).
"TEN-YEAR HYBRID MORTGAGE LOANS": The Mortgage Loans set forth on
Schedule I hereto.
"TERMINATION PRICE": As defined in Section 10.01(a) hereof.
"XXXXXXXXX": Xxxxxxxxx Mortgage Home Loans, Inc., a Delaware
corporation, and its successors and assigns.
38
"THREE-YEAR CMT": The weekly average yield on United States Treasury
securities adjusted to a constant maturity of three years as published by the
Federal Reserve Board in Statistical Release H.15(519).
"THREE-YEAR CMT INDEXED": Indicates a Mortgage Loan that has an
adjustable Loan Rate calculated on the basis of the Three-Year CMT Index.
"THREE-YEAR HYBRID MORTGAGE LOANS": The Mortgage Loans identified as
such and as set forth on Schedule I hereto.
"TMI": Xxxxxxxxx Mortgage, Inc., a Maryland corporation, and its
successors and assigns.
"TRANSFER": Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
"TRANSFER AFFIDAVIT": As defined in Section 6.02(e)(ii) hereof.
"TRANSFEREE": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"TRUST": Xxxxxxxxx Mortgage Securities Trust 2006-5, the Delaware
statutory trust governed hereunder.
"TRUST FUND": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, such Trust Fund consisting
of: (i) such Mortgage Loans as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof (but not including any Prepayment
Penalty Amounts), (ii) any REO Property, together with all collections thereon
and proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies required to be maintained pursuant to this
Agreement and any proceeds thereof, (iv) the Depositor's rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby); (v) the Depositor's security interest in the Additional Collateral,
(vi) the Distribution Account (subject to the last sentence of this definition),
any REO Account and such assets that are deposited therein from time to time and
any investments thereof, together with any and all income, proceeds and payments
with respect thereto, (vii) all right, title and interest of the Depositor in
and to each security or pledge agreement in respect of Additional Collateral,
(viii) all right, title and interest of the Seller in and to each of the
Servicing Agreements, (ix) the Yield Maintenance Account and (x) all proceeds of
the foregoing. Notwithstanding the foregoing, however, the Trust Fund
specifically excludes (1) all payments and other collections of interest and
principal due on the Mortgage Loans on or before the Cut-Off Date and principal
received before the Cut-Off Date (except any principal collected as part of a
payment due after the Cut-Off Date), (2) all income and gain realized from
Permitted Investments of funds on deposit in the Distribution Account, (3) any
Prepayment Penalty Amounts and (4) any Retained Interest.
39
"TRUSTEE": LaSalle Bank National Association, a national banking
association, not in its individual capacity but solely as trustee, its
successors or assigns, or any successor trustee appointed as herein provided.
"TRUSTEE FEE": The annual on-going fee payable by the Master Servicer
on behalf of the Trust to the Trustee from the Master Servicer Fee and pursuant
to the terms of the separate fee letter agreement between the Trustee and the
Master Servicer relating to the Xxxxxxxxx Mortgage Securities Trust 2006-5.
"TWO TIMES TEST": As to any Distribution Date, (i) the Aggregate
Subordinate Percentage is at least two times the Aggregate Subordinate
Percentage as of the Closing Date; (ii) the aggregate of the Principal Balances
of all Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in
REO and foreclosure), averaged over the preceding six-month period, as a
percentage of the aggregate of the Class Certificate Principal Balances of the
Subordinate Certificates, does not equal or exceed 50%; and (iii) on or after
the Distribution Date in September 2009, cumulative Realized Losses do not
exceed 30% of the Original Subordinated Principal Balance, or prior to the
Distribution Date in September 2009, cumulative Realized Losses do not exceed
20% of the Original Subordinated Principal Balance.
"UNDERWRITER'S EXEMPTION": Prohibited Transaction Exemption 90-30, as
most recently amended by PTE 2002-41 (Exemption Application No. D-11077), as
amended (or any successor thereto), or any substantially similar administrative
exemption granted by the U.S. Department of Labor.
"UNINSURED CAUSE": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained on such Mortgaged Property.
"UNITED STATES PERSON" or "U.S. PERSON": A citizen or resident of the
United States, a corporation, partnership or other entity treated as a
corporation or partnership for federal income tax purposes (other than a
partnership that is not treated as a U.S. Person pursuant to any applicable
Treasury regulations) created or organized in, or under the laws of, the United
States, any state thereof or the District of Columbia, or an estate the income
of which from sources without the United States is includible 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. The term "United States"
shall have the meaning set forth in Section 7701 of the Code or successor
provisions.
"UNPAID INTEREST SHORTFALL AMOUNT": With respect to each Class of
Certificates and (i) the first Distribution Date, zero, and (ii) any
Distribution Date after the first Distribution Date, the amount, if any, by
which (1)(a) the Monthly Interest Distributable Amount for that Class for the
immediately preceding Distribution Date exceeds (b) the aggregate amount
distributed on that Class in respect of such Monthly Interest Distributable
Amount on the preceding Distribution Date plus (2) any such shortfalls remaining
unpaid from prior Distribution Dates.
40
"UPPER TIER REMIC": As described in the Preliminary Statement.
"VALUE": With respect to any Mortgage Loan and the related Mortgaged
Property, the lesser of:
(i) the value of such Mortgaged Property as determined by an
appraisal, or an automated valuation model (AVM) in lieu of an
appraisal, made for the originator of the Mortgage Loan at the time of
origination of the Mortgage Loan by an appraiser who met the minimum
requirements of Title XI of the Financial Institution Reform, Recovery
and Enforcement Act of 1989 and the regulations promulgated
thereunder; and
(ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan;
provided, however, that in the case of a Refinancing Mortgage Loan, such value
of the Mortgaged Property is generally based solely upon the value determined by
an appraisal made for the originator of such Refinancing Mortgage Loan at the
time of origination by an appraiser who met the minimum requirements of Title XI
of the Financial Institution Reform, Recovery and Enforcement Act of 1989 and
the regulations promulgated thereunder.
"VOTING RIGHTS": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 98% of the voting rights
shall be allocated among the Classes of Certificates (other than the Class A-X
and Class A-R Certificates), pro rata, based on a fraction, expressed as a
percentage, the numerator of which is the Class Certificate Principal Balance of
such Class and the denominator of which is the aggregate of the Class
Certificate Principal Balances then outstanding, 1% of the voting rights shall
be allocated to the Holders of the Class A-X Certificates and 1% of the voting
rights shall be allocated to the Holder of the Class A-R Certificate; provided,
however, that when none of the Regular Certificates is outstanding, 100% of the
voting rights shall be allocated to the Holder of the Class A-R Certificate. The
voting rights allocated to a Class of Certificates shall be allocated among all
Holders of such Class, pro rata, based on a fraction the numerator of which is
the Certificate Principal Balance or Certificate Notional Balance of each
Certificate of such Class and the denominator of which is the Class Certificate
Principal Balance or Class Certificate Notional Balance of such Class; provided,
however, that any Certificate registered in the name of the Master Servicer, the
Securities Administrator, the Trustee, the Delaware Trustee or any of their
respective affiliates shall not be included in the calculation of Voting Rights.
"WFB": Xxxxx Fargo Bank, N.A. or its successors and assigns in its
capacity as Servicer.
"WRITEDOWN AMOUNT": The reduction described in Section 5.03(c).
"YIELD MAINTENANCE ACCOUNT": The account maintained by the Securities
Administrator pursuant to Section 5.09 which shall be entitled "Yield
Maintenance Account, Xxxxx Fargo Bank, N.A., in trust for the registered Holders
of Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage Loan Pass-Through
Certificates, Series 2006-5" and which must be an Eligible Account.
41
"YIELD MAINTENANCE AGREEMENT": The interest rate cap agreement
(External ID: 9337403 / Risk ID: 562370023), by and between the Yield
Maintenance Counterparty and the Securities Administrator, on behalf of the
Trust, dated as of August 31, 2006.
"YIELD MAINTENANCE AMOUNT": For any Distribution Date, the amount, if
any, to be paid by the Yield Maintenance Counterparty to the Securities
Administrator pursuant to the Yield Maintenance Agreement, as calculated by the
Yield Maintenance Counterparty based on information in the Distribution Date
Statement delivered to it pursuant to Section 5.04.
"YIELD MAINTENANCE COUNTERPARTY": Credit Suisse International.
SECTION 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or added
or any distributions are taken into account such definition or calculation and
any related definitions or calculations shall be determined without duplication
of such functions.
ARTICLE IA
ORGANIZATION OF TRUST
Section 1A.01. Name of Trust. The name of the Trust formed under the
Original Trust Agreement and the Certificate of Trust is "Xxxxxxxxx Mortgage
Securities Trust 2006-5," in which name the Trustee may conduct the business and
affairs of the Trust, make and execute contracts and agreements on behalf of the
Trust and xxx and be sued.
Section 1A.02. Office. The office of the Trust shall be in care of the
Trustee. The office of the Trust shall be located at its Corporate Trust Office,
or at such other address as the Trustee may designate by written notice to the
Certificateholders, each Rating Agency and the other parties to this Agreement.
Section 1A.03. Declaration of Trust. Under the Original Trust
Agreement and effective as of the date hereof, the Depositor appointed LaSalle
Bank National Association, as Trustee of the Trust, to have all the rights
powers and duties set forth herein. Under the Original Trust Agreement and
effective as of the date hereof, the Depositor appointed Wilmington Trust
Company to act as Delaware Trustee. It is the intention of the parties hereto
that the Trust constitute a statutory trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
from time to time (the "DELAWARE STATUTORY TRUST STATUTE" or "DSTS"), and that
this Agreement amends and restates in its entirety the Original Trust Agreement
and constitutes the governing instrument of such statutory trust. Effective as
of the date hereof, the Trustee shall have all rights, powers and duties set
forth in the Delaware Statutory Trust Statute with respect to accomplishing the
purposes of the Trust (except those duties expressly required to be performed by
the Delaware Trustee hereunder). It is hereby confirmed that the Trustee and the
Delaware Trustee were authorized to execute the Original
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Trust Agreement and to file a Certificate of Trust in substantially the form of
Exhibit M with the Secretary of State of Delaware, on behalf of the Trust.
Section 1A.04. Purpose and Powers. The purposes of the Trust are (i)
to issue the Certificates and to sell the Certificates to or at the direction of
the Depositor; (ii) with the proceeds of the sale of the Certificates, to
purchase the Mortgage Loans and all related assets and to pay any organizational
start-up and transactional expenses of the Trust; (iii) to enter into this
Agreement and to perform its obligations hereunder; (iv) to engage in those
activities, including entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and (v) subject to compliance with this Agreement, to engage in such
other activities as may be required in connection with the conservation of the
assets of the Trust and the making of distributions to the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement.
Section 1A.05. Liability of the Certificateholders. The
Certificateholders shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 1A.06. Title To Trust Property. Legal title to the assets of
the Trust shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust to be vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Trustee, a co-trustee and/or a separate trustee, as
the case may be, and in each case on behalf of the Trust. The Certificateholders
shall not have legal title to any part of the assets of the Trust. No transfer
by operation of law or otherwise of any interest of the Certificateholders shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of any part of the assets
of the Trust. The Trustee, in such capacity and in its capacity as Custodian, is
hereby authorized to hold all assets of the Trust on behalf of the Trust, for
the benefit of the Certificateholders.
Section 1A.07. Situs of Trust. The Trust will be located in the State
of Delaware and administered in the States of Delaware, Illinois, Maryland and
Minnesota. Nothing herein shall restrict or prohibit the Trustee from having
employees within or without the State of Delaware. The Trust may also be
qualified to do business in the State of New York.
Section 1A.08. The Delaware Trustee. (a) The Delaware Trustee is
appointed to serve as the trustee of the Trust in the State of Delaware for the
sole purpose of satisfying the requirement of Section 3807(a) of the DSTS that
the Trust have at least one trustee with a principal place of business in the
State of Delaware. It is understood and agreed by the parties hereto that the
Delaware Trustee shall have none of the duties, obligations or liabilities of
the Trustee.
(b) The duties of the Delaware Trustee shall be limited to (i)
accepting legal process served on the Trust in the State of Delaware and (ii)
the execution of any certificates required to be filed with the Delaware
Secretary of State which the Delaware Trustee is required to execute
43
under Section 3811 of the DSTS. To the extent that, at law or in equity, the
Delaware Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or the Certificateholders, it is hereby understood
and agreed by the other parties hereto that such duties and liabilities are
replaced by the duties and liabilities of the Delaware Trustee expressly set
forth in this Agreement. The Delaware Trustee shall have no liability for the
acts or omissions of the Trustee. Except as provided above, the Delaware Trustee
shall not be deemed a trustee and shall have no management responsibilities or
owe any fiduciary duties to the Trust or the Certificateholders.
(c) The Delaware Trustee may be removed by the Trustee upon 30 days
prior written notice to the Delaware Trustee. The Delaware Trustee may resign
upon 30 days prior written notice to the Trustee. No resignation or removal of
the Delaware Trustee shall be effective except upon the appointment of a
successor Delaware Trustee. If no successor has been appointed within such 30
day period, the Delaware Trustee or the Trustee may, at the expense of the
Trust, petition a court to appoint a successor Delaware Trustee.
(d) Any Person into which the Delaware Trustee may be merged or with
which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Delaware Trustee shall be a party, or any Person
which succeeds to all or substantially all of the corporate trust business of
the Delaware Trustee, shall be the successor Delaware Trustee under this
Agreement without the execution, delivery or filing of any paper or instrument
or further act to be done on the part of the parties hereto, except as may be
required by applicable law.
(e) The Delaware Trustee shall be entitled to all of the same rights,
protections indemnities and immunities under this Agreement and with respect to
the Trust as the Trustee. No amendment or waiver of any provision of this
Agreement which adversely affects the Delaware Trustee shall be effective
against it without its prior written consent.
The Delaware Trustee shall not be liable for the acts or omissions of
the Trustee, nor shall the Delaware Trustee be liable for supervising or
monitoring the performance and the duties and obligations of the Trustee or the
Trust under this Agreement or any related document. The Delaware Trustee shall
not be personally liable under any circumstances, except for its own willful
misconduct, bad faith or gross negligence. In particular, but not by way of
limitation:
(i) the Delaware Trustee shall not be personally liable for any
error of judgment made in good faith;
(ii) no provision of this Agreement shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the performance of its rights or powers
hereunder, if the Delaware Trustee shall have reasonable grounds for
believing that the payment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(iii) under no circumstances shall the Delaware Trustee be
personally liable for any representation, warranty, covenant,
agreement, or indebtedness of the Trust;
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(iv) the Delaware Trustee shall not be personally responsible for
or in respect of the validity or sufficiency of this Agreement or for
the due execution hereof by any other party hereto;
(v) the Delaware Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document
or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed by the proper party or parties. The
Delaware Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically
prescribed herein, the Delaware Trustee may for all purposes hereof
rely on a certificate, signed by the Trustee, the Securities
Administrator or the Master Servicer, as applicable, as to such fact
or matter, and such certificate shall constitute full protection to
the Delaware Trustee for any action taken or omitted to be taken by it
in good faith in reliance thereon;
(vi) in the exercise or administration of the Trust hereunder,
the Delaware Trustee (a) may act directly or through agents or
attorneys pursuant to agreements entered into with any of them, and
the Delaware Trustee shall not be liable for the default or misconduct
of such agents or attorneys if such agents or attorneys shall have
been selected by the Delaware Trustee in good faith and with due care
and (b) may consult with counsel, accountants and other skilled
persons to be selected by it in good faith and with due care and
employed by it, and it shall not be liable for anything done, suffered
or omitted in good faith by it in accordance with the advice or
opinion of any such counsel, accountants or other skilled persons; and
(vii) except as expressly provided in this Section 1A.08, in
accepting and performing the trusts hereby created the Delaware
Trustee acts solely as trustee hereunder and not in its individual
capacity, and all persons having any claim against the Delaware
Trustee by reason of the transactions contemplated by this Agreement
shall look only to the Trust Fund for payment or satisfaction thereof.
(f) In the event of the appointment of a successor Delaware Trustee,
such successor shall cause an amendment to the Certificate of Trust to be filed
with the Secretary of State of Delaware in accordance with Section 3810(b) of
the DSTS, indicating the change of such Delaware Trustee's identity. In
addition, until the termination of the Trust and this Agreement, the Delaware
Trustee shall at all times fulfill the requirements of the DSTS.
(g) Upon written notification from the Securities Administrator that
the Trust has been terminated in accordance with Article X, the Delaware Trustee
shall cause the Certificate of Trust to be cancelled by filing a certificate of
cancellation with the Secretary of State of Delaware in accordance with Section
3810(d) of the DSTS.
Section 1A.09 Separateness Provisions. The Trust shall not commingle
its assets with those of any other entity. The Trust shall maintain its
financial and accounting books and
45
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses and liabilities
from its own funds, and the Trust shall neither incur any indebtedness nor pay
the indebtedness, operating expenses and liabilities of any other entity. The
Trust shall not engage in any dissolution, liquidation, consolidation, merger or
sale of assets except as specifically provided for herein. The Trust shall
maintain appropriate minutes or other records of all appropriate actions and
shall maintain its office separate from the offices of the Depositor or any of
its Affiliates. The Trust shall not engage in any business activity other than
as contemplated by this Agreement and related documentation. The Trust shall not
form, or cause to be formed, any subsidiaries and shall not own or acquire any
asset other than as contemplated by this Agreement and related documentation.
Other than as contemplated by this Agreement and related documentation, the
Trust shall not follow the directions or instructions of the Depositor. The
Trust shall conduct its own business in its own name. The Trust shall observe
all formalities required under the Delaware Statutory Trust Statute. The Trust
shall not hold out its credit as being available to satisfy the obligations of
any other person or entity. The Trust shall not acquire the obligations or
securities of its Affiliates or the Seller. Other than as contemplated by this
Agreement and related documentation, the Trust shall not pledge its assets for
the benefit of any other person or entity. The Trust shall correct any known
misunderstanding regarding its separate identity. The Trust shall not identify
itself as a division of any other person or entity.
For accounting purposes, the Trust shall be treated as an entity
separate and distinct from any Certificateholder. The pricing and other material
terms of all transactions and agreements to which the Trust is a party shall be
intrinsically fair to all parties thereto. This Agreement is and shall be the
only agreement among the parties hereto with respect to the creation, operation
and termination of the Trust.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to (i) each Mortgage Loan (other than the right
to receive any Retained Interest or any Prepayment Penalty Amounts) identified
on the Mortgage Loan Schedule, including the related Cut-Off Date Principal
Balance, all interest due thereon after the Cut-Off Date and all collections in
respect of interest and principal due after the Cut-Off Date; (ii) all the
Depositor's right, title and interest in and to the Distribution Account and all
amounts from time to time credited to and to the proceeds of the Distribution
Account; (iii) any real property that secured each such Mortgage Loan and that
has been acquired by foreclosure or deed in lieu of foreclosure; (iv) the
Depositor's interest in any insurance policies in respect of the Mortgage Loans;
(v) the Depositor's security interest in the Additional Collateral; (vi) all
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proceeds of any of the foregoing; and (vii) all other assets included or to be
included in the Trust Fund. Such assignment includes all interest and principal
due to the Depositor or the Master Servicer after the Cut-Off Date with respect
to the Mortgage Loans.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Purchase Agreement, including all rights of the Seller under
the Servicing Agreements to the extent assigned in the Mortgage Loan Purchase
Agreement. The Trustee hereby accepts such assignment, and shall be entitled to
exercise all rights of the Depositor under the Mortgage Loan Purchase Agreement
and all rights of the Seller under the Servicing Agreements as if, for such
purpose, it were the Depositor or the Seller, as applicable, including the
Seller's right to enforce remedies for breaches or representations and
warranties and delivery of the Mortgage Loan Documents. 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 Seller or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto except as
specifically set forth herein.
In addition, with respect to any Additional Collateral Mortgage Loan,
the Depositor does hereby transfer, assign, set-over and otherwise convey to the
Trustee without recourse (except as provided herein) (i) its rights as assignee
under any security agreements, pledge agreements or guarantees relating to the
Additional Collateral supporting any Additional Collateral Mortgage Loan, (ii)
its security interest in and to any Additional Collateral and (iii) its right to
receive payments in respect of any Additional Collateral Mortgage Loan pursuant
to the related Servicing Agreement.
For purposes of complying with the requirements of the Asset-Backed
Securities Facilitation Act of the State of Delaware, 6 Del. C. Section 2701A,
et seq. (the "SECURITIZATION ACT"), each of the parties hereto hereby agrees
that:
(i) any property, assets or rights purported to be transferred, in
whole or in part, by the Depositor pursuant to this Agreement
shall be deemed to no longer be the property, assets or rights
of the Depositor;
(ii) none of the Depositor, its creditors or, in any insolvency
proceeding with respect to the Depositor or the Depositor's
property, a bankruptcy trustee, receiver, debtor, debtor in
possession or similar person, to the extent the issue is
governed by Delaware law, shall have any rights, legal or
equitable, whatsoever to reacquire (except pursuant to a
provision of this Agreement), reclaim, recover, repudiate,
disaffirm, redeem or recharacterize as property of the Depositor
any property, assets or rights purported to be transferred, in
whole or in part, by the Depositor pursuant to this Agreement
(including the Assignment);
(iii) in the event of a bankruptcy, receivership or other insolvency
proceeding with respect to the Depositor or the Depositor's
property, to the extent the issue is governed by Delaware law,
such property, assets and rights shall not be deemed to be part
of the Depositor's property, assets, rights or estate; and
47
(iv) the transaction contemplated by this Agreement shall constitute
a "securitization transaction" as such term is used in the
Securitization Act.
In connection with such transfer and assignment, the Seller, on behalf
of the Depositor, does hereby deliver on the Closing Date, unless otherwise
specified in this Section 2.01, to, and deposit with the Trustee, or the
Custodian as its designated agent, the following documents or instruments with
respect to each Mortgage Loan (a "MORTGAGE FILE") so transferred and assigned:
(i) the original Mortgage Note, endorsed either on its face or
by allonge attached thereto in blank or in the following
form: "Pay to the order of LaSalle Bank National
Association, as Trustee for Xxxxxxxxx Mortgage Securities
Trust 2006-5, without recourse", or with respect to any
lost Mortgage Note, an original Lost Note Affidavit
stating that the original mortgage note was lost,
misplaced or destroyed, together with a copy of the
related mortgage note; provided, however, that such
substitutions of Lost Note Affidavits for original
Mortgage Notes may occur only with respect to Mortgage
Loans the aggregate Cut-Off Date Principal Balance of
which is less than or equal to 2% of the Cut-Off Date
Aggregate Principal Balance;
(ii) originals or copies of any guarantee, security agreement
or pledge agreement relating to any Additional Collateral,
if applicable, and executed in connection with the
Mortgage Note, assigned to the Trustee on behalf of the
Trust;
(iii) except as provided below, for each Mortgage Loan that is
not a MERS Mortgage Loan, the original Mortgage, and in
the case of each MERS Mortgage Loan, the original
Mortgage, noting the presence of the MIN for that Mortgage
Loan and either language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, or if
such Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment to MERS, in each case
with evidence of recording thereon, and the original
recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of
recording thereon or, if such Mortgage or power of
attorney has been submitted for recording but has not been
returned from the applicable public recording office, has
been lost or is not otherwise available, a certified copy
of such Mortgage or power of attorney, as the case may be,
and that the original of such Mortgage has been forwarded
to the public recording office, or, in the case of a
Mortgage that has been lost, a copy thereof (certified as
provided for under the laws of the appropriate
jurisdiction) and a written Opinion of Counsel (delivered
at the Seller's expense) acceptable to the Trustee and the
Depositor that an original recorded Mortgage is not
required to enforce the Trustee's interest in the Mortgage
Loan;
48
(iv) the original or a copy of each assumption, modification or
substitution agreement, if any, relating to the Mortgage
Loans, or, as to any assumption, modification or
substitution agreement which cannot be delivered on or
prior to the Closing Date because of a delay caused by the
public recording office where such assumption,
modification or substitution agreement has been delivered
for recordation, a photocopy of such assumption,
modification or substitution agreement, pending delivery
of the original thereof, together with an Officer's
Certificate of the Seller certifying that the copy of such
assumption, modification or substitution agreement
delivered to the Trustee (or its custodian) on behalf of
the Trust is a true copy and that the original of such
agreement has been forwarded to the public recording
office;
(v) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, an original Assignment of Mortgage, in form
and substance acceptable for recording. The Mortgage shall
be assigned to "LaSalle Bank National Association, as
Trustee for Xxxxxxxxx Mortgage Securities Trust 2006-5,
without recourse" or in blank;
(vi) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, an original copy of any intervening
Assignment of Mortgage showing a complete chain of
assignments, or, in the case of an intervening Assignment
of Mortgage that has been lost, a written Opinion of
Counsel (delivered at the Seller's expense) acceptable to
the Trustee that such original intervening Assignment of
Mortgage is not required to enforce the Trustee's interest
in the Mortgage Loans;
(vii) the original or a certified copy of the lender's title
insurance policy; and
(viii) with respect to any Cooperative Loan, the Cooperative Loan
Documents.
Notwithstanding the above, the Mortgage Files to be delivered and
deposited with the Trustee, or the Custodian, as its agent, the Mortgage Loans
serviced by WFB, shall include only the documents or instruments referred to in
clauses (i), (ii), (iv) and (v) above and the other documents identified above
shall be retained and held by WFB, as a Servicer, as provided in the
Reconstituted Servicing Agreement dated as of August 1, 2006, among the Seller,
WFB and the Trust, and acknowledged by the Master Servicer; provided that the
Master Servicer shall cause WFB to deliver to the Custodian, within 60 days of
the occurrence of a Document Transfer Event, the documents and instruments so
retained by it consisting of the documents or instruments referred to in clauses
(iii) and (vi) through (viii) above.
In connection with the assignment of any MERS Mortgage Loan, the
Seller agrees that it will take (or shall cause the applicable Servicer to
take), at the expense of the Seller (with the cooperation of the Depositor, the
Trustee and the Master Servicer), such actions as are necessary to cause the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Seller to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders
49
by including (or deleting, in the case of Mortgage Loans that are repurchased in
accordance with this Agreement) in such computer files the information required
by the MERS(R) System to identify the series of the Certificates issued in
connection with the transfer of such Mortgage Loans to the Xxxxxxxxx Mortgage
Securities Trust 2006-5.
With respect to each Cooperative Loan the Seller, on behalf of the
Depositor does hereby deliver to the Trustee (or Custodian) the related
Cooperative Loan Documents and the Seller will take (or shall cause the
applicable Servicer to take), at the expense of the Seller (with the cooperation
of the Depositor, the Trustee and the Master Servicer) such actions as are
necessary under applicable law (including but not limited to the relevant UCC)
in order to perfect the interest of the Trustee in the related Mortgaged
Property.
Assignments of each Mortgage with respect to each Mortgage Loan that
is not a MERS Mortgage Loan (other than a Cooperative Loan) shall be recorded;
provided, however, that such assignments need not be recorded if, in the Opinion
of Counsel (which must be from Independent Counsel and not at the expense of the
Trust or the Trustee) acceptable to the Trustee, each Rating Agency and the
Master Servicer, recording in such states is not required to protect the Trust's
interest in the related Mortgage Loans; provided, however, notwithstanding the
delivery of any Opinion of Counsel, each assignment of Mortgage shall be
submitted for recording by the Seller (or the Seller will cause the applicable
Servicer to submit each such assignment for recording), at the cost and expense
of the Seller, in the manner described above, at no expense to the Trust or
Trustee, upon the earliest to occur of (1) reasonable direction by the Majority
Certificateholders, (2) the occurrence of a bankruptcy or insolvency relating to
the Seller or the Depositor, or (3) with respect to any one Assignment of
Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to
the Mortgagor under the related Mortgage. Subject to the preceding sentence, as
soon as practicable after the Closing Date (but in no event more than three
months thereafter except to the extent delays are caused by the applicable
recording office), the Seller shall properly record (or the Seller will cause
the applicable Servicer to properly record), at the expense of the Seller (with
the cooperation of the Depositor, the Trustee and the Master Servicer), in each
public recording office where the related Mortgages are recorded, each
assignment referred to in Section 2.01(v) above with respect to a Mortgage Loan
that is not a MERS Mortgage Loan.
The Trustee agrees to execute and deliver to the Depositor on or prior
to the Closing Date an acknowledgment of receipt of the original Mortgage Note
(with any exceptions noted), substantially in the form attached as Exhibit G-1
hereto.
If the original lender's title insurance policy, or a certified copy
thereof, was required to be but was not delivered pursuant to Section 2.01(vii)
above, the Seller shall deliver or cause to be delivered to the Trustee the
original or a copy of a written commitment or interim binder or preliminary
report of title issued by the title insurance or escrow company, with the
original or a certified copy thereof to be delivered to the Trustee, promptly
upon receipt thereof, but in any case within 175 days of the Closing Date. The
Seller shall deliver or cause to be delivered to the Trustee, promptly upon
receipt thereof, any other documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan sold to the Depositor by the Seller
and required to be delivered to the Trustee, including, but not limited to, any
original documents evidencing
50
an assumption or modification of any Mortgage Loan. The Master Servicer shall
cause to be delivered to the Trustee or the Custodian, as its agent, the
Mortgage Files retained by WFB within 60 days of the occurrence of a Document
Transfer Event as described above.
For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Seller, in lieu of delivering
the above documents, herewith delivers to the Trustee, or to the Custodian on
behalf of the Trustee, an Officer's Certificate which shall include a statement
to the effect that all amounts received in connection with such prepayment that
are required to be deposited in the Distribution Account have been so deposited.
All original documents that are not delivered to the Trustee on behalf of the
Trust shall be held by the Master Servicer or the applicable Servicer in trust
for the Trustee, for the benefit of the Trust and the Certificateholders.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Trustee. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03 hereof.
The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement.
SECTION 2.02. Acceptance by Trustee.
The Trustee hereby accepts its appointment as Custodian hereunder and
acknowledges the receipt, subject to the provisions of Section 2.01 and subject
to the review described below and any exceptions noted on the exception report
described in the next paragraph below, of the documents referred to in Section
2.01 above and all other assets included in the definition of "Trust Fund" and
declares that, in its capacity as Custodian, it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee further agrees, for the benefit of the Certificateholders,
to review each Mortgage File (other than for Mortgage Loans serviced by WFB)
delivered to it and to certify and deliver to the Depositor, the Seller and each
Rating Agency an interim certification in substantially the form attached hereto
as Exhibit G-2, within 90 days after the Closing Date (or, with respect to any
document delivered after the Startup Day, within 45 days of receipt (including,
but not limited to, documents provided by WFB as described in Section 2.01) and
with respect to any Qualified Substitute Mortgage, within five Business Days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.01 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the
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information set forth in the Mortgage Loan Schedule that corresponds to items
(i), (ii), (iii), (xiii), (xiv) and (xviii) of the Mortgage Loan Schedule (to
the extent such items are required to be delivered to it as part of the Mortgage
Files pursuant to Section 2.01) accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee is under no 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 or that they
have actually been recorded or that they are other than what they purport to be
on their face.
No later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor and the Seller a final certification in the form
annexed hereto as Exhibit G-3 evidencing the completeness of the Mortgage Files,
with any applicable exceptions noted thereon.
If, in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
finds any document or documents constituting a part of a Mortgage File to be
missing or not conforming to the requirements set forth herein, at the
conclusion of its review the Trustee (or the Custodian as its designated agent)
shall promptly notify the Seller, the Depositor and the Master Servicer. In
addition, upon the discovery by the Seller or the Depositor (or upon receipt by
the Trustee of written notification of such breach) of a breach of any of the
representations and warranties made by the Seller in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan that materially adversely affects such
Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties to this Agreement.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free and
clear of any liens and encumbrances, from the Depositor to the Trustee in trust
for the benefit of the Certificateholders and that such property not be part of
the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the
Seller.
(a) Upon discovery or receipt of written notice that a document does
not comply with the requirements of Section 2.01 hereof, or that a document is
missing from, a Mortgage File or of the breach by the Seller of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
or in Section 2.04 or Section 2.08 hereof in respect of any Mortgage Loan which
materially adversely affects the value of that Mortgage Loan or the interest
therein of the Certificateholders, the Trustee (or the Custodian as its
designated agent) shall promptly notify the Seller of such noncompliance,
missing document or breach and request that the Seller deliver such missing
document or cure such noncompliance or breach within 90 days from the date that
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the Seller was notified of such missing document, noncompliance or breach, and
if the Seller does not deliver such missing document or cure such noncompliance
or breach in all material respects during such period, the Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase Agreement and cause the
Seller to repurchase that Mortgage Loan from the Trust Fund at the Purchase
Price on or prior to the Determination Date following the expiration of such 90
day period (subject to Section 2.03(e) below); provided, however, that, in
connection with any such breach that could not reasonably have been cured within
such 90 day period, if the Seller shall have commenced to cure such breach
within such 90 day period, the Seller shall be permitted to proceed thereafter
diligently and expeditiously to cure the same within the additional period
provided under the Mortgage Loan Purchase Agreement; and, provided further,
that, in the case of the breach of any representation, warranty or covenant made
by the Seller in Schedule III to the Mortgage Loan Purchase Agreement, the
Seller shall be obligated to cure such breach or purchase the affected Mortgage
Loans for the Purchase Price or, if the Mortgage Loan or the related Mortgaged
Property acquired with respect thereto has been sold, then the Seller shall pay,
in lieu of the Purchase Price, any excess of the Purchase Price over the Net
Liquidation Proceeds received upon such sale. The Purchase Price for the
repurchased Mortgage Loan or such other amount due shall be deposited in the
Distribution Account on or prior to the next Determination Date after the
Seller's obligation to repurchase such Mortgage Loan arises. The Trustee, upon
receipt of written certification from the Securities Administrator of the
related deposit in the Distribution Account, shall release to the Seller the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Seller shall furnish to it
and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto and the Trustee shall have no further responsibility with regard
to such Mortgage File (it being understood that the Trustee shall have no
responsibility for determining the sufficiency of such assignment for its
intended purpose). In lieu of repurchasing any such Mortgage Loan as provided
above, the Seller may cause such Mortgage Loan to be removed from the Trust Fund
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d) below. It is understood and agreed that
the obligation of the Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.
The Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement including, without limitation, any obligation
of the Seller to purchase a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation, warranty or
covenant as described in this Section 2.03(a).
Any costs and expenses incurred by the Trustee enforcing the
obligations of the Seller under this Section 2.03(a) shall be reimbursable to
the Trustee from amounts on deposit in the Distribution Account.
(b) If pursuant to the provisions of Section 2.03(a), the Seller
repurchases or otherwise removes from the Trust Fund a Mortgage Loan that is a
MERS Mortgage Loan, the Seller will take (or shall cause the applicable Servicer
to take), at the expense of the Seller (with the
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cooperation of the Depositor, the Trustee and the Master Servicer), such actions
as are necessary either (i) cause MERS to execute and deliver an Assignment of
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations or (ii) cause MERS to designate
on the MERS(R) System the Seller or its designee as the beneficial holder of
such Mortgage Loan.
(c) [Reserved].
(d) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) above must be effected
prior to the last Business Day that is within two years after the Closing Date.
As to any Deleted Mortgage Loan for which the Seller substitutes a Qualified
Substitute Mortgage Loan or Mortgage Loans, such substitution shall be effected
by the Seller delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Mortgage Loans, the Mortgage Note, the Mortgage, the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01 hereof (subject to the
exceptions provided therein), together with an Officers' Certificate stating
that each such Qualified Substitute Mortgage Loan satisfies the definition
thereof and specifying the Substitution Adjustment (as described below), if any,
in connection with such substitution; provided, however, that, in the case of
any Qualified Substitute Mortgage Loan that is a MERS Mortgage Loan, the Seller
shall provide such documents and take such other action with respect to such
Qualified Substitute Mortgage Loans as are required pursuant to Section 2.01
hereof. The Trustee shall acknowledge receipt for such Qualified Substitute
Mortgage Loan or Loans and, within five Business Days thereafter, shall review
such documents as specified in Section 2.02 hereof and deliver to the related
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit G-2, with any
exceptions noted thereon. Within 180 days of the date of substitution, the
Trustee shall deliver to the Seller and the Master Servicer a certification
substantially in the form of Exhibit G-3 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any exceptions noted thereon. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in the month of
substitution are not part of the Trust Fund and will be retained by the Seller.
For the month of substitution, distributions to Certificateholders will reflect
the collections and recoveries in respect of such Deleted Mortgage Loan in the
Due Period preceding the month of substitution and the Depositor or the Seller,
as the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Seller shall
give or cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Trust Fund and shall be subject in all respects to the terms of this
Agreement and, in the case of a substitution effected by the Seller, the
Mortgage Loan Purchase Agreement, including, in the case of a substitution
effected by the Seller all representations and warranties thereof included in
the Mortgage Loan Purchase Agreement and all representations and warranties
thereof set forth in Section 2.04 hereof, in each case as of the date of
substitution.
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For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
shall determine, and provide written certification to the Trustee and the Seller
as to, the amount (each, a "SUBSTITUTION ADJUSTMENT"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal
balance thereof as of the date of substitution, together with one month's
interest on such principal balance at the applicable Net Loan Rate. On or prior
to the next Determination Date after the Seller's obligation to repurchase the
related Deleted Mortgage Loan arises, the Seller will deliver or cause to be
delivered to the Securities Administrator for deposit in the Distribution
Account an amount equal to the related Substitution Adjustment, if any, and the
Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans
and an acknowledgment from the Securities Administrator of its receipt of the
deposit to the Distribution Account, shall release to the Seller the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) will not cause (a) any federal tax
to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code, or
(b) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding. If such Opinion of Counsel cannot be delivered,
then such substitution may only be effected at such time as the required Opinion
of Counsel can be given.
(e) Upon discovery by the Seller, the Master Servicer, a 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 within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(d), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Any such repurchase or substitution shall be made in the same
manner as set forth in Section 2.03(a) above, if made by the Seller. The Trustee
shall reconvey to the Seller 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.
SECTION 2.04. Representations and Warranties of the Seller with
Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that the representations and warranties made
by the Seller pursuant to Schedule III to the Mortgage Loan Purchase Agreement
are hereby being made to the Trustee and are true and correct as of the Closing
Date.
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With respect to the representations and warranties incorporated in
this Section 2.04 that are made to the best of the Seller's knowledge or as to
which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Master Servicer or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Certificateholders then, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation and warranty being
inaccurate at the time the representation or warranty was made, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
Within 90 days of its discovery or its receipt of notice of any such
missing or materially defective documentation or any such breach of a
representation or warranty, the Seller shall promptly deliver such missing
document or cure such defect or breach in all material respects or, in the event
such defect or breach cannot be cured, the Seller shall repurchase the affected
Mortgage Loan or cause the removal of such Mortgage Loan from the Trust Fund and
substitute for it one or more Qualified Substitute Mortgage Loans, in either
case, in accordance with Section 2.03 hereof.
It is understood and agreed that the representations and warranties
incorporated in this Section 2.04 shall survive delivery of the Mortgage Files
to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Depositor, the Seller, the Master Servicer or the
Trustee of a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the party discovering such breach shall give
prompt written notice to the other parties, and in no event later than two
Business Days from the date of such discovery. It is understood and agreed that
the obligations of the Seller set forth in Section 2.03(a) hereof to cure,
substitute for or repurchase a related Mortgage Loan pursuant to the Mortgage
Loan Purchase Agreement constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties incorporated in this Section 2.04.
SECTION 2.05. [Reserved].
SECTION 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) this agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general an except as such enforceability may be
limited by general principles of equity (whether considered in a proceeding
at law or in equity);
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(ii) immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and marketable title to each Mortgage Loan (insofar as
such title was conveyed to it by the Seller) subject to no prior lien,
claim, participation interest, mortgage, security interest, pledge, charge
or other encumbrance or other interest of any nature;
(iii) as of the Closing Date, the Depositor has transferred all
right, title and interest in the Mortgage Loans to the Trustee on behalf of
the Trust;
(iv) the Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) the Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware, with
full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) the Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material adverse
changes in the financial condition, earnings, affairs or business of the
Depositor or which might materially and adversely affect the properties or
assets, taken as a whole, of the Depositor;
(vii) the execution, delivery and performance of this Agreement
by the Depositor, and the consummation of the transactions contemplated
hereby, do not and will not result in a material breach or violation of any
of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property or
assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
(viii) to the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or "blue sky" laws, (b) have been
previously obtained or (c) the failure of which to obtain would not have a
material adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement;
and
57
(ix) there are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement, as
the case may be; or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02 hereof, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Securities Administrator, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations. The interests evidenced by the Certificates constitute the entire
beneficial ownership interest in the Trust Fund.
SECTION 2.08. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders that, as of the Closing Date or as of such
date specifically provided herein:
(i) the Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware and is
and will remain in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to fulfill its
obligations hereunder;
(ii) the Seller has the power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to
enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of
this Agreement, has duly executed and delivered this Agreement and this
Agreement, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or other similar laws in relation to the rights of creditors
generally;
(iii) the execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will
not violate the Seller's articles of incorporation or by-laws or constitute
a default under or result in a material breach or acceleration of, any
material contract, agreement or other instrument to which the Seller is a
party or which may be applicable to the Seller or its assets;
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(iv) the Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance
with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction
over the Seller or its assets, which violation might have consequences that
would materially and adversely affect the condition (financial or
otherwise) or the operation of the Seller or its assets or might have
consequences that would materially and adversely affect the performance of
its obligations and duties hereunder;
(v) the Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(vi) the Seller has good, marketable and indefeasible title to
the Mortgage Loans, free and clear of any and all liens, pledges, charges
or security interests of any nature encumbering the Mortgage Loans and upon
the payment of the purchase price under the Mortgage Loan Purchase
Agreement by the Depositor, the Depositor will have good and marketable
title to the Mortgage Notes and Mortgage Loans, free and clear of all liens
or encumbrances;
(vii) the Mortgage Loans are not being transferred by the Seller
with any intent to hinder, delay or defraud any creditors of the Seller;
(viii) there are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement,
(B) seeking to prevent the sale of the Mortgage Loans or the consummation
of the transactions contemplated by this Agreement or (C) that might
prohibit or materially and adversely affect the performance by the Seller
of its obligations under, or validity or enforceability of, this Agreement;
(ix) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained; and
(x) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Seller pursuant to the Mortgage Loan Purchase Agreement are not
subject to the bulk transfer or any similar statutory provisions.
SECTION 2.09. Covenants of the Seller.
The Seller hereby covenants that, except for the transfer hereunder,
the Seller will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any lien on any Mortgage Loan,
or any interest therein; the Seller will notify the Trustee, as assignee of the
Depositor, and the Master Servicer of the existence of any lien on any Mortgage
59
Loan immediately upon discovery thereof, and the Seller will defend the right,
title and interest of the Trust, as assignee of the Depositor, in, to and under
the Mortgage Loans, against all claims of third parties claiming through or
under the Seller; provided, however, that nothing in this Section 2.09 shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any of
the Mortgage Loans any liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service and Administer the Mortgage
Loans.
The Master Servicer shall supervise, monitor and oversee the
obligation of the Servicers to service and administer their respective Mortgage
Loans in accordance with the terms of the applicable Servicing Agreement and,
where applicable, the Correspondent Sellers Guide and the Master Servicing
Guide, 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 and,
where applicable, the Master Servicing Guide. Furthermore, the Master Servicer
shall oversee and consult with each Servicer as necessary from time-to-time to
carry out the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer
by each Servicer and shall cause each Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by such
Servicer under the applicable Servicing 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 the Servicers' and Master Servicer's
records, and based on such reconciled and corrected information, prepare the
statements specified in Section 5.04 and any other information and statements
required hereunder. The Master Servicer shall reconcile the results of its
Mortgage Loan monitoring with the actual remittances of the Servicers to the
related Servicing Accounts pursuant to the applicable Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any limited powers of attorney and other documents in form acceptable to the
Trustee, necessary or appropriate to enable the Servicers and the Master
Servicer to service and administer the related Mortgage Loans and REO Property,
which limited powers of attorney shall provide that the Trustee will not be
liable for the actions or omissions of the Servicers or Master Servicer in
exercising such powers.
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The Master Servicer shall not without the Trustee's written consent
(i) initiate any action, suit or proceeding solely under the Trustee's name
without indicating the Master Servicer's representative capacity or (ii) take
any action with the intent to cause, and which actually does cause, the Trustee
to be registered to do business in any state. The Master Servicer shall
indemnify the Trustee for any and all costs, liabilities and expenses incurred
by the Trustee in connection with the negligent or willful misuse of such powers
of attorney by the Master Servicer.
The Trustee shall provide access to the records and documentation in
possession of the Trustee (including in its capacity as Custodian hereunder)
regarding the related Mortgage Loans and REO Property and the 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 Trustee; provided,
however, that, unless otherwise required by law, the Trustee shall not 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 Trustee
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 Trustee's actual costs.
The Trustee, upon the written request of the Master Servicer, shall
execute and deliver to the related Servicer and the Master Servicer 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 Mortgage; (iii) obtain a deficiency judgment against the
Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage
Note or Mortgage or otherwise available at law or equity.
SECTION 3.02. REMIC-Related Covenants.
For as long as each REMIC created hereunder shall exist, the Trustee
and the Securities Administrator shall act in accordance herewith to treat each
such REMIC as a REMIC, and the Trustee and the Securities Administrator shall
comply with any directions of the Depositor, the related Servicer or the Master
Servicer to assure such continuing treatment. In particular, the Trustee, the
Securities Administrator and the Master Servicer shall not (a) sell or knowingly
permit the sale of all or any portion of the Mortgage Loans or of any investment
of deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans or is otherwise permitted pursuant to this Agreement or the
Trustee has received a REMIC Opinion prepared at the expense of the Trust; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.03 or 2.04 of this Agreement or as otherwise
provided in this Agreement, as applicable, accept any contribution to any REMIC
after the Startup Day without receipt of a REMIC Opinion.
SECTION 3.03. Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the
Trustee (on behalf of the Trust) and the Depositor the compliance by each
Servicer with its duties under the related
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Servicing Agreement. In the review of each Servicer's activities, the Master
Servicer may rely upon an officer's certificate of the Servicer with regard to
such Servicer's compliance with the terms of its Servicing Agreement. In the
event that the Master Servicer, in its judgment, determines that a Servicer
should be terminated in accordance with its Servicing Agreement, or that a
notice should be sent pursuant to such Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice of termination or take
such other action as it deems appropriate, provided, however, if the defaulting
Servicer is WFB, upon receipt by a Responsible Officer of the Trustee of written
notice from the Master Servicer or another Person of an event of default that,
unless cured, would constitute grounds for such termination, the Trustee in
consultation with the Depositor shall issue such notice of termination or take
such other action as it deems appropriate. For avoidance of doubt, nothing
herein shall impose an obligation on the Trustee to monitor the performance of
WFB as Servicer.
(b) The Master Servicer, for the benefit of the Trust and the
Certificateholders, shall (acting as agent of the Trust when enforcing the
Trust's rights under each Servicing Agreement) (i) enforce the obligations of
each Servicer under the related Servicing Agreement, and (ii) in the event that
a Servicer fails to perform its obligations in accordance with the related
Servicing Agreement, subject to the preceding paragraph, terminate the rights
and obligations of such Servicer thereunder and for servicers other than WFB,
act as servicer of the related Mortgage Loans or enter into a new Servicing
Agreement with a successor Servicer selected by the Master Servicer which the
Master Servicer shall cause the Trustee to acknowledge; provided, however, that
if the Servicer subject to such termination is WFB, the Master Servicer shall
immediately notify the Trustee in writing of: (A) WFB's failure to perform and
(B) the nature and description of such failure including whether such failure
constitutes grounds for termination, and upon receipt of such notice the
Trustee, subject to the preceding paragraph, may (A) terminate the rights and
obligations of such Servicer and (B) enter into a new servicing agreement with a
successor servicer selected by it; provided, further it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the 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 except as provided in paragraph (c) below, 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. Any costs and expenses incurred
by the Trustee in connection with its performance of its obligations under this
Section 3.03, if not reimbursed by WFB, shall be reimbursed to the Trustee by
the Trust Fund.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated
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with an evaluation of the potential termination of the Servicer as a result of
an event of default by such Servicer and (ii) all costs and expenses associated
with the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
servicer to service the Mortgage Loans in accordance with the related Servicing
Agreement) are not fully and timely reimbursed by the terminated Servicer, the
Master Servicer shall be entitled to reimbursement of such costs and expenses
from the Distribution Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
(f) With respect to Additional Collateral Mortgage Loans, the Master
Servicer shall have no duty or obligation to supervise, monitor or oversee the
activities of each Servicer under its Servicing Agreement with respect to
Additional Collateral, except (a) with respect to any instances where a
Servicer, in the course of fulfilling its obligations under the related
Servicing Agreement seeks directions, instructions, consents or waivers from the
Master Servicer with respect to any item of Additional Collateral, or (b) upon
the occurrence of the following events (i) in the case of a final liquidation of
any Mortgaged Property secured by Additional Collateral, the Master Servicer
shall enforce the obligation of the Servicer under the related Servicing
Agreement to liquidate such Additional Collateral as required by such Servicing
Agreement, and (ii) if the Master Servicer assumes the obligations of such
Servicer as successor Servicer under the related Servicing Agreement pursuant to
this Section 3.03, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of such
Servicing Agreement.
(g) If a Servicing Agreement requires the approval of the Master
Servicer for a modification to a Mortgage Loan, the Master Servicer shall
approve such modification if, based upon its receipt of written notification
from the related Servicer outlining the terms of such modification and
appropriate supporting documentation, the Master Servicer determines that the
modification is permitted under the terms of the related Servicing Agreement and
that any conditions to such modification set forth in related Servicing
Agreement have been satisfied. If a Servicing Agreement requires approval or
consent of the Trustee for a modification, the Trustee shall approve or consent
to such modification if the Master Servicer makes such a determination and in
reliance thereon.
(h) If a Servicing Agreement requires the oversight and monitoring of
loss mitigation measures with respect to the related Mortgage Loans, the Master
Servicer will monitor any loss mitigation procedure or recovery action related
to a defaulted Mortgage Loan (to the extent it receives notice of such from the
related Servicer) and confirm that such loss mitigation procedure or recovery
action is initiated, conducted and concluded in accordance with any timeframes
and any other requirements set forth in the related Servicing Agreement, and the
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Master Servicer shall notify the Depositor in any case in which the Master
Servicer believes that the related Servicer is not complying with such
timeframes and/or other requirements.
SECTION 3.04. 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. 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 3.05. 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 Article X hereof, 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, the
Trust 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, Liquidation Proceeds and Recoveries and (iv) to effectuate,
in its own name, on behalf the Trust, or in the name of the Trust, 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
and the related Servicing Agreement, as applicable; provided, however, that the
Master Servicer shall not (and, consistent with its responsibilities under
Section 3.03, shall not permit any Servicer 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 result in an Adverse REMIC Event unless the Master Servicer has received
an Opinion of Counsel (but not at the expense of the Master Servicer) to the
effect that the contemplated action will not result in an Adverse REMIC Event.
The Trustee shall furnish the Master Servicer, upon written request from a
Servicing Officer, with any limited powers of attorney empowering the Master
Servicer or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). In instituting foreclosures or similar proceedings, the Master
Servicer shall institute such proceedings either in its own name on behalf of
the Trust or in the name of the Trust (or cause the related Servicer, pursuant
to the related Servicing Agreement, to institute
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such proceedings either in the name of such Servicer on behalf of the Trust or
in the name of the Trust), unless otherwise required by law or otherwise
appropriate. If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trust or the Trustee on its behalf or that
the Trust or the Trustee, as applicable, would be adversely affected under the
"doing business" or tax laws of such state if such action is taken in its name,
the Master Servicer shall join with the Trustee, on behalf of the Trust, in the
appointment of a co-trustee pursuant to Section 8.10 hereof. 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 on behalf of the Trust.
SECTION 3.06. Due-on-Sale Clauses; Assumption Agreements.
To the extent provided in the applicable Servicing Agreement and to
the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicers to enforce such clauses in accordance with
the applicable Servicing Agreement. If applicable law prohibits the enforcement
of a due-on-sale clause or such clause is otherwise not enforced in accordance
with the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan
is assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
SECTION 3.07. Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan,
or the receipt by any Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a certification substantially in the form
of Exhibit F hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the related Servicing Account maintained by the applicable
Servicer pursuant to Section 4.01 or by the applicable Servicer pursuant to its
Servicing Agreement have been or will be so deposited) and shall request that
the Trustee (or the Custodian, on behalf of the Trustee) deliver to the
applicable Servicer the related Mortgage File. Upon receipt of such
certification and request, the Trustee (or the Custodian, on behalf of the
Trustee), shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee (and the Custodian, if applicable) shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, each Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
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satisfaction or assignment, as the case may be, shall be chargeable to the
related Servicing Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Trustee (or the Custodian, on behalf of the Trustee),
shall, upon the request of a Servicer or the Master Servicer, and delivery to
the Trustee (the Custodian, on behalf of the Trustee), of two copies of a
request for release signed by a Servicing Officer substantially in the form of
Exhibit F (or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer), release the related
Mortgage File held in its possession or control to the Servicer or the Master
Servicer, as applicable. Such trust receipt shall obligate the Servicer or the
Master Servicer to return the Mortgage File to the Trustee (or the Custodian on
behalf of the Trustee) when the need therefor by the Servicer or the Master
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which
case, upon receipt of a certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the Trustee (or
the Custodian on behalf of the Trustee), to the Servicer or the Master Servicer.
SECTION 3.08. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trust.
(a) The Master Servicer shall transmit and each Servicer (to the
extent required by the related Servicing Agreement) shall transmit to the
Trustee (or Custodian) such documents and instruments coming into the possession
of the Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee (or Custodian). Any funds received by
the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds, Insurance Proceeds or Recoveries in respect of any Mortgage Loan shall
be held for the benefit of the Trust and the Certificateholders subject to the
Master Servicer's right to retain or withdraw from the Distribution Account the
Master Servicing Fee, any additional compensation pursuant to Section 3.14 and
any other amounts provided in this Agreement, and to the right of each Servicer
to retain its Servicing Fee and any other amounts as provided in the applicable
Servicing Agreement. The Master Servicer shall, and (to the extent provided in
the applicable Servicing Agreement) shall cause each Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
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 Office of Thrift Supervision,
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.
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(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,
Insurance Proceeds or Recoveries, shall be held by the Master Servicer for and
on behalf of the Trust and the Certificateholders and shall be and remain the
sole and exclusive property of the Trust; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement.
SECTION 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan (other than a Cooperative Loan), the Master
Servicer shall enforce any obligation of the Servicers under the related
Servicing Agreements to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of the related Servicing Agreements. It is understood and
agreed that such insurance shall be with insurers meeting the eligibility
requirements set forth in the applicable Servicing Agreement and that no
earthquake or other additional insurance is to be required of any Mortgagor or
to be maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Distribution Account, subject to withdrawal pursuant to Section 4.02 and 4.03.
Any cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02 and 4.03.
SECTION 3.10. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in the applicable
Servicing Agreement) cause the related Servicer to, prepare and present on
behalf of the Trustee, the Trust and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted).
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SECTION 3.11. Maintenance of the Primary Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan (including any lender-paid
Primary Insurance Policy) in accordance with the provisions of this Agreement
and the related Servicing Agreement, as applicable. The Master Servicer shall
not, and shall not permit any Servicer (to the extent required under the related
Servicing Agreement) to, cancel or refuse to renew any such Primary Insurance
Policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder except in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Trustee, the Trust and the Certificateholders, claims to the insurer under any
Primary Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02, any
amounts collected by the Servicer under any Primary Insurance Policies shall be
deposited in the Distribution Account, subject to withdrawal pursuant to Section
4.03.
SECTION 3.12. Trustee to Retain Possession of Certain Insurance
Policies and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available and
delivered) of any Primary Insurance Policies, or certificate of insurance if
applicable and available, and any certificates of renewal as to the foregoing as
may be issued from time to time as contemplated by this Agreement and which come
into its possession. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee (or its Custodian,
if any, as directed by the Trustee) 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, as directed by the Trustee), upon
the execution or receipt thereof the originals of any Primary Insurance
Policies, any certificates of renewal, and such other documents or instruments
that constitute portions of the Mortgage File that come into the possession of
the Master Servicer from time to time.
SECTION 3.13. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause each Servicer (to the extent required
under the related Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the
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ownership of Mortgaged 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, all in accordance with the
applicable Servicing Agreement.
SECTION 3.14. Additional Compensation to the Master Servicer.
Pursuant to Section 4.02(c), certain income and gain realized from any
investment of funds in the Distribution Account shall be for the benefit of the
Master Servicer as additional compensation. Servicing compensation in the form
of assumption fees, if any, late payment charges, as collected, if any, or
otherwise (but, unless otherwise specifically permitted in a Servicing
Agreement, not including any Prepayment Penalty Amounts) shall be retained by
the applicable Servicer, or the Master Servicer, and shall not be deposited in
the related Servicing Account or Distribution Account. The Master Servicer 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. The amount of the aggregate compensation payable as set forth
in this Section 3.14 plus the Master Servicing Fee due to the Master Servicer in
respect of any Distribution Date shall be reduced in accordance with Section
5.06.
SECTION 3.15. REO Property.
(a) In the event the Trust (or the Trustee on its behalf) acquires
ownership of any REO Property in respect of any related Mortgage Loan, the deed
or certificate of sale shall be issued to the Trust, or if required under
applicable law, to the Trustee, or to its nominee, on behalf of the Trust. The
Master Servicer shall, to the extent provided in the applicable Servicing
Agreement, cause the applicable Servicer to sell, any REO Property as
expeditiously as possible (and in no event later than three years after
acquisition) and in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. Pursuant to its efforts to sell such
REO Property, the Master Servicer shall cause the applicable Servicer to protect
and conserve, such REO Property in the manner and to the extent required by the
applicable Servicing Agreement, in accordance with the REMIC Provisions and in a
manner that does not result in a tax on "net income from foreclosure property"
or cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the related Servicing Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as the
case may be, prior to final disposition, out of any net rental income or other
net amounts derived from such REO Property.
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(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the related Servicing Account on or prior to the
applicable Determination Date in the month following receipt thereof and be
remitted by wire transfer in immediately available funds to the Master Servicer
for deposit into the related Distribution Account on the next succeeding
Servicer Remittance Date.
SECTION 3.16. Assessments of Compliance and Attestation Reports.
(a) ASSESSMENTS OF COMPLIANCE.
(i) By March 10 (with a 5 calendar day cure period) of each year
(subject to the later date referred to in Section 3.16(a)(iii)),
commencing in March 2007, the Master Servicer, the Securities
Administrator and the Custodian, each at its own expense, shall
furnish, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the
Securities Administrator and the Depositor, a report on an assessment
of compliance with the Relevant Servicing Criteria that contains (A) a
statement by such party of its responsibility for assessing compliance
with the Relevant Servicing Criteria, (B) a statement that such party
used the Servicing Criteria to assess compliance with the Relevant
Servicing Criteria, (C) such party's assessment of compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered by
the Form 10-K required to be filed pursuant to Section 3.19(b) and for
each fiscal year thereafter, whether or not a Form 10-K is required to
be filed, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of
each such failure and the nature and status thereof, and (D) a
statement that a registered public accounting firm has issued an
attestation report on such party's assessment of compliance with the
Relevant Servicing Criteria as of and for such period.
(ii) No later than the end of each fiscal year for the Trust for
which a 10-K is required to be filed, the Master Servicer and the
Custodian, shall each forward to the Securities Administrator and the
Depositor the name of each Servicing Function Participant engaged by
it and what Relevant Servicing Criteria will be addressed in the
report on assessment of compliance prepared by such Servicing Function
Participant (provided, however, that the Master Servicer need not
provide such information to the Securities Administrator so long as
the Master Servicer and the Securities Administrator are the same
Person). When the Master Servicer, the Custodian, and the Securities
Administrator submit their assessments to the Securities
Administrator, such parties will also at such time include the
assessment (and attestation pursuant to subsection (b) of this Section
3.16) of each Servicing Function Participant engaged by it.
(iii) Promptly after receipt of each such report on assessment of
compliance, (i) the Depositor shall review each such report and each
comparable report submitted by a Servicer and, if applicable, consult
with the Master Servicer, the Securities Administrator, the Custodian,
the Servicers and any Servicing Function Participant engaged by such
parties as to the nature of any material instance of noncompliance
with the Relevant Servicing Criteria by each such party, and (ii) the
Securities Administrator
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shall confirm that the assessments, taken as a whole, address all of
the Servicing Criteria and taken individually address the Relevant
Servicing Criteria for each party as set forth on Exhibit Q and on any
similar exhibit set forth in each Servicing Agreement in respect of
each Servicer and notify the Depositor of any exceptions. None of such
parties shall be required to deliver any such assessments until March
30 in any given year so long as it has received written confirmation
from the Depositor that a Form 10-K is not required to be filed in
respect of the Trust for the preceding calendar year; provided that
the Custodian shall only be required to deliver such an assessment of
compliance with respect to any fiscal year for which a Form 10-K is
required to be filed in respect of the Trust. The Master Servicer
shall include all annual reports on assessment of compliance received
by it with its own assessment of compliance to be submitted to the
Securities Administrator pursuant to this Section.
In the event the Master Servicer, the Securities Administrator,
the Custodian, any Servicer or any Servicing Function Participant
engaged by any such party is terminated, assigns its rights and
obligations under, or resigns pursuant to, the terms of this
Agreement, or any applicable custodial agreement, Servicing Agreement
or sub-servicing agreement, as the case may be, such party (in the
case of a Servicer, to the extent required under the applicable
Servicing Agreement) shall provide or shall cause such Servicing
Function Participant to provide for the applicable period preceding
such assignment and termination a report on assessment of compliance
pursuant to this Section 3.16(a) or to such other applicable
agreement, notwithstanding any such termination, assignment or
resignation.
(b) ATTESTATION REPORTS.
(i) By March 10 (with a 5 calendar day cure period) of each year
(subject to the later date referred to in Section 3.16(b)(ii)),
commencing in March 2007, the Master Servicer, the Securities
Administrator, the Custodian, each at its own expense, shall cause,
and each such party shall cause any Servicing Function Participant
engaged by it to cause, each at its own expense, a registered public
accounting firm (which may also render other services to the Master
Servicer, the Trustee, in its capacity as Custodian, the Securities
Administrator, or such other Servicing Function Participants, as the
case may be) and that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Securities
Administrator and the Depositor, to the effect that (i) it has
obtained a representation regarding certain matters from the
management of such party, which includes an assertion that such party
has complied with the Relevant Servicing Criteria, and (ii) on the
basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the PCAOB,
it is expressing an opinion as to whether such party's compliance with
the Relevant Servicing Criteria was fairly stated in all material
respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria.
In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it
was unable to express such an opinion. Such report must be available
for general use and not contain restricted use language.
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(ii) Promptly after receipt of such report from the Master
Servicer, the Trustee, in its capacity as Custodian, the Securities
Administrator, a Servicer or any Servicing Function Participant
engaged by such parties, (i) the Depositor shall review the report
and, if applicable, consult with such parties as to the nature of any
defaults by such parties, in the fulfillment of any of each such
party's obligations hereunder or under any other applicable agreement,
and (ii) the Securities Administrator shall confirm that each
assessment submitted pursuant to subsection (a) of this Section 3.16
is coupled with an attestation meeting the requirements of this
Section and notify the Depositor of any exceptions. None of the Master
Servicer, the Securities Administrator, the Custodian or any Servicing
Function Participant engaged by such parties shall be required to
deliver or cause the delivery of such reports until March 30 in any
given year for so long as it has received written confirmation from
the Depositor that a Form 10-K is not required to be filed in respect
of the Trust for the preceding calendar or fiscal year; provided that
the Custodian shall only be required to deliver or cause to be
delivered such report with respect to any fiscal year for which a Form
10-K is required to be filed by the Trust. The Master Servicer shall
include each such attestation furnished to it with its own attestation
to be submitted to the Securities Administrator pursuant to this
Section.
In the event the Master Servicer, the Securities Administrator,
the Custodian, any Servicer or any Servicing Function Participant
engaged by any such party is terminated, assigns its rights and duties
under, or resigns pursuant to the terms of this Agreement, or any
applicable custodial agreement, Servicing Agreement or sub-servicing
agreement, as the case may be, such party (in the case of a Servicer,
to the extent required under the applicable Servicing Agreement) shall
cause a registered public accounting firm to provide an attestation
pursuant to this Section 3.16(b) or to such other applicable
agreement, for the applicable period immediately preceding such
termination, assignment or resignation, notwithstanding any such
termination, assignment or resignation.
SECTION 3.17. Annual Compliance Statement.
The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and Securities Administrator shall cause any Servicing
Function Participant engaged by it to deliver) to the Depositor and the
Securities Administrator on or before March 10 (with a 5 calendar day cure
period) of each year, commencing in March 2007, an Officer's Certificate
stating, as to the signer thereof, that (A) a review of such party's activities
during the preceding calendar year or portion thereof and of such party's
performance under this Agreement, or such other applicable agreement in the case
of any Servicing Function Participant, has been made under such officer's
supervision and (B) to the best of such officer's knowledge, based on such
review, such party has fulfilled all its obligations under this Agreement, or
such other applicable agreement in the case of any Servicing Function
Participant, in all material respects throughout such year or 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. Promptly after receipt of each such Officer's Certificate, the
Depositor shall review such Officer's Certificate and, if applicable, consult
with each such party, as applicable, as to the
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nature of any failures by such party, in the fulfillment of any of such party's
obligations hereunder or, in the case of any Servicing Function Participant,
under such other applicable agreement. The Master Servicer shall include all
annual statements of compliance received by it from each Servicer with its own
annual statement of compliance to be submitted to the Securities Administrator
pursuant to this Section. In the event the Master Servicer, the Securities
Administrator or any Servicing Function Participant engaged by any such party is
terminated or resigns pursuant to the terms of this Agreement, or any applicable
agreement in the case of a Servicing Function Participant, as the case may be,
such party shall provide an Officer's Certificate pursuant to this Section 3.17
or to such applicable agreement, as the case may be, notwithstanding any such
termination, assignment or resignation.
SECTION 3.18. Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification, required
to be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The Master Servicer
and the Securities Administrator shall provide, and each such party shall cause
any Servicing Function Participant engaged by it to provide, to the Person who
signs the Xxxxxxxx-Xxxxx Certification (the "Certifying Person"), by March 1
(with a ten-calendar day cure period), (or by such other date and cure period
specified in the applicable Servicing Agreement), of each year in which the
Trust is subject to the reporting requirements of the Exchange Act and otherwise
within a reasonable period of time upon request, a certification, if applicable
in the form provided by the related Servicing Agreement (each, a "Back-Up
Certification"), upon which the Certifying Person, the entity for which the
Certifying Person acts as an officer, and such entity's officers, directors and
Affiliates (collectively with the Certifying Person, "Certification Parties")
can reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Trust. Such officer of the Certifying Person can be contacted by e-mail at
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or any Servicing Function Participant engaged by such party
is terminated or resigns pursuant to the terms of this Agreement, or any
applicable sub-servicing agreement, as the case may be, such party shall provide
a Back-Up Certification to the Certifying Person pursuant to this Section 3.18
with respect to the period of time it was subject to this Agreement or any
applicable sub-servicing agreement, as the case may be. Notwithstanding the
foregoing, (i) the Master Servicer and the Securities Administrator shall not be
required to deliver a Back-Up Certification to each other if both are the same
Person and the Master Servicer is the Certifying Person and (ii) the Master
Servicer shall not be obligated to sign the Xxxxxxxx-Xxxxx Certification in the
event that it does not receive any Back-Up Certification required to be
furnished to it pursuant to this section or any Servicing Agreement or custodial
agreement.
SECTION 3.19. Reports Filed with Securities and Exchange Commission.
(a) REPORTS FILED ON FORM 10-D.
(i) Within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities
Administrator shall prepare and file on behalf of the Trust any Form
10-D required by the Exchange Act, in form and
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substance as required by the Exchange Act. The Securities
Administrator shall file each Form 10-D with a copy of the related
Distribution Date Statement attached thereto. Any disclosure in
addition to the Distribution Date Statement that is required to be
included on Form 10-D ("ADDITIONAL FORM 10-D DISCLOSURE") shall be
reported by the parties set forth on Exhibit R to the Depositor and
the Securities Administrator and directed and approved by 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 Form 10-D Disclosure, except as
set forth in the next two paragraphs.
(ii) As set forth on Exhibit R hereto, within 5 calendar days
after the related Distribution Date, (i) the parties to the Xxxxxxxxx
Mortgage Securities Trust 2006-5 transaction shall be required to
provide to the Securities Administrator and the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible
form (which may be Word or Excel documents easily convertible to XXXXX
format), or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable, together with an
Additional Disclosure Notification in the form of Exhibit U hereto (an
"ADDITIONAL DISCLOSURE NOTIFICATION"), and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be,
the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Seller will be responsible for any reasonable fees and expenses
assessed or incurred by the Securities Administrator in connection
with including any Additional Form 10-D Disclosure in Form 10-D
pursuant to this paragraph.
(iii) After preparing the Form 10-D, the Securities Administrator
shall forward upon request electronically a copy of the Form 10-D to
the Depositor (provided that such Form 10-D includes any Additional
Form 10-D Disclosure). Within two Business Days after receipt of such
copy, but no later than the 12th calendar day after the Distribution
Date, the Depositor shall notify the Securities Administrator in
writing (which may be furnished electronically) of any changes to or
approval of such Form 10-D. In the absence of receipt of any written
changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume
that such Form 10-D is in final form and the Securities Administrator
may proceed with the execution and filing of the Form 10-D. A duly
authorized representative of the Master Servicer shall sign each Form
10-D. If a Form 10-D cannot be filed on time or if a previously filed
Form 10-D needs to be amended, the Securities Administrator will
follow the procedures set forth in subsection (d)(ii) of this Section
3.19. Promptly (but no later than 1 Business Day) after filing with
the Commission, the Securities Administrator will make available on
its internet website a final executed copy of each Form 10-D filed by
the Securities Administrator. Each party to this Agreement
acknowledges that the performance by the Master Servicer and the
Securities Administrator of their respective duties under this Section
3.19(a) related to the timely preparation, execution and filing of
Form 10-D is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under this
Section 3.19(a). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure
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to properly prepare, execute and/or timely file such Form 10-D, where
such failure results from the Securities Administrator's inability or
failure to obtain or receive, on a timely basis, any information from
any other party hereto needed to prepare, arrange for execution or
file such Form 10-D, not resulting from its own negligence, bad faith
or willful misconduct.
(iv) Form 10-D requires the registrant to indicate (by checking
"yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days." The Depositor hereby represents to
the Securities Administrator that the Depositor has filed all such
required reports during the preceding 12 months and that it has been
subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than
the fifth calendar day after the related Distribution Date with
respect to the filing of a report on Form 10-D if the answer to the
questions should be "no." The Securities Administrator shall be
entitled to rely on such representations in preparing, executing
and/or filing any such report
(b) REPORTS FILED ON FORM 10-K.
(i) On or prior to the 90th day after the end of each fiscal year
of the Trust in which a Form 10-K is required to be filed or such
earlier date as may be required by the Exchange Act (the "10-K FILING
DEADLINE") (it being understood that the fiscal year for the Trust
ends on December 31st of each year), commencing in March 2007, the
Securities Administrator shall prepare and file on behalf of the Trust
a Form 10-K, in form and substance as required by the Exchange Act.
Each such Form 10-K shall include the following items, in each case to
the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement and the
related Servicing Agreement, (i) an annual compliance statement for
each Servicer, the Master Servicer, the Securities Administrator and
any Servicing Function Participant engaged by such parties (each, a
"REPORTING SERVICER") as described under Section 3.17, (ii)(A) the
annual reports on assessment of compliance with servicing criteria for
each Reporting Servicer, as described under Section 3.16(a), and (B)
if each Reporting Servicer's report on assessment of compliance with
servicing criteria described under Section 3.16(a) identifies any
material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if each Reporting Servicer's report on
assessment of compliance with servicing criteria described under
Section 3.16(a) 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 Reporting Servicer, as described
under Section 3.16(b), and (B) if any registered public accounting
firm attestation report described under Section 3.16(b) 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 as described in Section 3.18 (provided, however, that
the Securities Administrator, at its
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discretion, may omit from the Form 10-K any annual compliance
statement, assessment of compliance or attestation report that is not
required to be filed with such Form 10-K pursuant to Regulation AB).
Any disclosure or information in addition to (i) through (iv) above
that is required to be included on Form 10-K ("ADDITIONAL FORM 10-K
DISCLOSURE") shall be determined and prepared by and at the direction
of the Depositor pursuant to the following paragraph and the
Securities Administrator will have no duty or liability for any
failure hereunder to determine or prepare any Additional Form 10-K
Disclosure, except as set forth in the next two paragraphs.
(ii) As set forth on Exhibit S hereto, no later than March 10
(with a 5 calendar day cure period) of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in
2007, (i) the parties to the Xxxxxxxxx Mortgage Securities Trust
2006-5 transaction shall be required to provide to the Securities
Administrator and the Depositor, to the extent known by a responsible
officer thereof, in XXXXX-compatible form (which may be Word or Excel
documents easily convertible to XXXXX format), or in such other form
as otherwise agreed upon by the Securities Administrator and such
party, the form and substance of any Additional Form 10-K Disclosure,
if applicable, together with an Additional Disclosure Notification and
(ii) the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Additional Form
10-K Disclosure on Form 10-K. The Seller will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K
Disclosure in Form 10-K pursuant to this paragraph.
(iii) After preparing the Form 10-K, the Securities Administrator
shall forward upon request electronically a copy of the Form 10-K to
the Depositor. Within three Business Days after receipt of such copy,
but no later than March 25th, the Depositor shall notify the
Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 10-K. In
the absence of receipt of any written changes or approval, or if the
Depositor does not request a copy of a Form 10-K, the Securities
Administrator shall be entitled to assume that such Form 10-K is in
final form and the Securities Administrator may proceed with the
execution and filing of the Form 10-K. A senior officer of the Master
Servicer in charge of the master servicing function shall sign the
Form 10-K. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Securities Administrator will
follow the procedures set forth in subsection (d)(ii) of this Section
3.19. Promptly (but no later than 1 Business Day) after filing with
the Commission, the Securities Administrator will make available on
its internet website a final executed copy of each Form 10-K filed by
the Securities Administrator. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.19(b)
related to the timely preparation, execution and filing of Form 10-K
is contingent upon such parties (the Custodian and any Servicing
Function Participant) strictly observing all applicable deadlines in
the performance of their duties under this Section 3.19(b), Section
3.18, Section 3.17, Section 3.16(a) and Section 3.16(b). Neither the
Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage or claim arising out of or
with
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respect to any failure to properly prepare, execute and/or timely file
such Form 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely
basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 10-K, not resulting from its
own negligence, bad faith or willful misconduct.
(iv) Form 10-K requires the registrant to indicate (by checking
"yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days." The Depositor hereby represents to
the Securities Administrator that the Depositor has filed all such
required reports during the preceding 12 months and that it has been
subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than
March 15th with respect to the filing of a report on Form 10-K, if the
answer to the questions should be "no." The Securities Administrator
shall be entitled to rely on such representations in preparing,
executing and/or filing any such report.
(c) REPORTS FILED ON FORM 8-K.
(i) Within four (4) Business Days after the occurrence of an
event requiring disclosure on Form 8-K (each such event, a "REPORTABLE
EVENT"), and if requested by the Depositor, the Securities
Administrator shall prepare and file on behalf of the Trust a Form
8-K, as required by the Exchange Act, provided that the Depositor
shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable
Event or that is otherwise required to be included in Form 8-K ("FORM
8-K DISCLOSURE INFORMATION") shall be reported by the parties set
forth on Exhibit T to the Depositor and the Securities Administrator
and directed and approved by 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 Form
8-K Disclosure Information or any Form 8-K, except as set forth in the
next two paragraphs.
(ii) As set forth on Exhibit T hereto, for so long as the Trust
is subject to the Exchange Act reporting requirements, no later than
close of business (New York City time) on the 2nd Business Day after
the occurrence of a Reportable Event (i) the parties to the Xxxxxxxxx
Mortgage Securities Trust 2006-5 transaction shall be required to
provide to the Securities Administrator and Depositor, to the extent
known by a responsible officer thereof, in XXXXX-compatible form
(which may be Word or Excel documents easily convertible to XXXXX
format), or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Form 8-K Disclosure Information, if applicable, together with an
Additional Disclosure Notification and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be,
the inclusion of the Form 8-K Disclosure Information. The Seller will
be responsible for any reasonable fees and expenses assessed or
incurred
77
by the Securities Administrator in connection with including any Form
8-K Disclosure Information in Form 8-K pursuant to this paragraph.
(iii) After preparing the Form 8-K, the Securities Administrator
shall forward upon request electronically a copy of the Form 8-K to
the Depositor. Promptly, but no later than the close of business on
the third Business Day after the Reportable Event, the Depositor shall
notify the Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 8-K. In the
absence of receipt of any written changes or approval, or if the
Depositor does not request a copy of a Form 8-K, the Securities
Administrator shall be entitled to assume that such Form 8-K is in
final form and the Securities Administrator may proceed with the
execution and filing of the Form 8-K. A duly authorized representative
of the Master Servicer shall sign each Form 8-K filed by the
Securities Administrator. 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 subsection
(d)(ii) of this Section 3.19. Promptly (but no later than 1 Business
Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website a final executed copy of
each Form 8-K filed by the Securities Administrator or filed by the
Depositor and provided to the Securities Administrator for that
purpose. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of
their respective duties under this Section 3.19(c) related to the
timely preparation, execution and filing of Form 8-K is contingent
upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 3.19(c). Neither the
Securities Administrator nor the Master Servicer shall have any
liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file
such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely
basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 8-K, not resulting from its
own negligence, bad faith or willful misconduct.
(d) DELISTING; AMENDMENTS; LATE FILINGS.
(i) On or prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, unless
otherwise directed by the Depositor, the Securities Administrator
shall prepare and file a Form 15 relating to the automatic suspension
of reporting in respect of the Trust under the Exchange Act.
(ii) In the event that the Securities Administrator is unable to
timely file with the Commission all or any required portion of any
Form 8-K, 10-D or 10-K required to be filed by this Agreement because
required disclosure information was either not delivered to it or
delivered to it after the delivery deadlines set forth in this
Agreement or for any other reason, the Securities Administrator will
promptly notify electronically the Depositor. In the case of Form 10-D
and 10-K, the parties to this Agreement and each Servicer will
cooperate to prepare and file a Form 12b-25 and a 10-D/A and 10-K/A,
as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the
case of Form 8-K, the
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Securities Administrator will, upon receipt of all required Form 8-K
Disclosure Information and upon the approval and direction of the
Depositor, include such disclosure information on the next Form 10-D.
In the event that any previously filed Form 8-K, 10-D or 10-K needs to
be amended, and such amendment includes any Additional Form 10-D
Disclosure, any Additional Form 10-K Disclosure or any Form 8-K
Disclosure Information or any amendment to such disclosure, the
Securities Administrator will promptly notify electronically the
Depositor and such parties will cooperate to prepare any necessary
8-KA, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to
Form 8-K, 10-D or 10-K shall be signed by a duly authorized
representative or a senior officer in charge of master servicing, as
applicable, of the Master Servicer. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the
Securities Administrator of their respective duties under this Section
3.19(d) related to the timely preparation, execution and filing of
Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is
contingent upon each such party performing its duties under this
Section. Neither the Master Servicer nor the Securities Administrator
shall have any liability for any loss, expense, damage, claim arising
out of or with respect to any failure to properly prepare, execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator's inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 15, Form 12b-25 or
any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
SECTION 3.20. Additional Information.
Each of the parties agrees to provide to the Securities Administrator
such additional information related to such party as the Securities
Administrator may reasonably request, including evidence of the authorization of
the person signing any certification or statement, financial information and
reports, and such other information related to such party or its performance
hereunder.
SECTION 3.21. Intention of the Parties and Interpretation.
Each of the parties acknowledges and agrees that the purpose of
Section 3.16 through Section 3.20 of this Agreement is to facilitate compliance
by the Securities Administrator and the Depositor with the provisions of
Regulation AB promulgated by the Commission under the Exchange Act (17 C.F.R.
Sections 229.1100 - 229.1123), as such may be amended from time to time and
subject to such clarification and interpretive advice as may be issued by the
staff of the Commission 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 that purpose, (b) 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, (c) the parties
shall comply with the reasonable requests made by the Securities Administrator
or the Depositor for delivery of such additional or
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different information as the Securities Administrator or the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB, which information is available to such party without unreasonable effort or
expense and within such timeframe as may be reasonably requested, and (d) no
amendment of this Agreement shall be required to effect any such changes in the
parties' obligations as are necessary to accommodate evolving interpretations of
the provisions of Regulation AB.
SECTION 3.22. Indemnification.
Each party required to deliver an assessment of compliance and attestation
report pursuant to Section 3.16 (each, an "ITEM 1122 RESPONSIBLE PARTY") shall
indemnify and hold harmless the Securities Administrator, the Master Servicer,
the Depositor and the Seller and each of their directors, officers, employees,
agents, and affiliates from and against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon (a) any
breach by such Item 1122 Responsible Party of any of its obligations hereunder
relating to its obligations as an Item 1122 Responsible Party, including
particularly its obligations to provide any assessment of compliance,
attestation report or compliance statement required under Section 3.16(a),
3.16(b) or 3.17, respectively, or any information, data or materials required to
be included in any Exchange Act report, (b) any material misstatement or
material omission in any information, data or materials provided by such Item
1122 Responsible Party (or, in the case of the Securities Administrator or
Master Servicer, any material misstatement or material omission in (x) any
compliance certificate delivered by it, or by any Servicing Function Participant
engaged by it, pursuant to this Agreement, (y) any assessment or attestation
delivered by or on behalf of it, or by any Servicing Function Participant
engaged by it, pursuant to this Agreement, or (z) any Additional Form 10-D
Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure Information
concerning the Securities Administrator or the Master Servicer and provided by
either of them), or (c) the negligence, bad faith or willful misconduct of such
Item 1122 Responsible Party in connection with its performance hereunder
relating to its obligations as an Item 1122 Responsible Party. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Securities Administrator, the Depositor or the Seller, then each
Item 1122 Responsible Party agrees that it shall contribute to the amount paid
or payable by the Securities Administrator, the Master Servicer, the Depositor
and the Seller as a result of any claims, losses, damages or liabilities
incurred by the Securities Administrator, the Master Servicer, the Depositor or
the Seller in such proportion as is appropriate to reflect the relative fault of
the Securities Administrator, the Master Servicer, the Depositor or the Seller
on the one hand and such Item 1122 Responsible Party on the other. This
indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
SECTION 3.23. Amendments to Master Servicing Guide and Correspondent
Sellers Guide.
The Seller and the Master Servicer hereby agree not to amend the
Master Servicing Guide or the Correspondent Sellers Guide with respect to the
Mortgage Loans (which are Securitized Loans (as defined therein)) which
amendment would (i) change the Servicer Remittance Date or date for remittance
of any servicer reports or monthly remittance advices, (ii)
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change the manner in which any Servicer makes Advances, servicing advances or
amounts to compensate for Interest Shortfalls or (iii) otherwise have a material
adverse effect on the Trust or the Certificateholders unless such changes are
made pursuant to the provisions of Section 12.01 hereof.
SECTION 3.24. UCC.
The Trustee agrees to file continuation statements for any Uniform
Commercial Code financing statements identifying the Trust as debtor which the
Depositor has informed the Trustee in writing were filed on the Closing Date in
connection with the Trust, provided that the Trustee receives the related filing
information on a timely basis. The Depositor shall file any financing statements
or amendments thereto required by any change in the Uniform Commercial Code.
SECTION 3.25. Optional and Required Purchases of Certain Mortgage
Loans.
(a) Xxxxxxxxx, in its capacity as a Servicer of a portion of the
Mortgage Loans, shall have the right to purchase from the Trust any Mortgage
Loan which as of the first day of a calendar quarter is delinquent in payment by
90 days or more or is an REO Property, at a price equal to the Purchase Price;
provided however (i) that such Mortgage Loan is still 90 days or more delinquent
or is an REO Property as of the date of such purchase and (ii) this purchase
option, if not theretofore exercised, shall terminate on the date prior to the
last day of the related calendar quarter. This purchase option, if not
exercised, shall not be thereafter reinstated unless the delinquency is cured
and the Mortgage Loan thereafter again becomes 90 days or more delinquent or
becomes an REO Property, in which case the option shall again become exercisable
as of the first day of the related calendar quarter.
(b) In addition, Xxxxxxxxx, in its capacity as the Seller, may, but is
not required to, repurchase any Mortgage Loan as to which the Mortgagor has
requested a Significant Modification and such Mortgagor has a satisfactory
payment history under such Mortgage Loan and meets the credit standards of the
Seller for the loan program selected (a "SIGNIFICANT MODIFICATION LOAN"). A
"SIGNIFICANT MODIFICATION" shall mean any modification to the interest rate of
the greater of (i) 0.25% added or subtracted from the existing rate and (ii) a
change equal to the product of (a) 5% and (b) the annual existing interest rate
thereon, which is not provided for in the related Mortgage Note. The purchase
price for any repurchase pursuant to this Section 3.25(b) shall be the
applicable Purchase Price. In order to exercise its repurchase rights hereunder,
the Seller shall deliver to the Master Servicer and the Trustee an Officer's
Certificate identifying the Mortgage Loan to be repurchased and certifying that
(i) such Mortgage Loan is a Significant Modification Loan, and (ii) that the
Significant Modification Loan will be entered into on the date of such
repurchase.
(c) No later than the fourth Business Day prior to each Distribution
Date, Xxxxxxxxx will provide to the Master Servicer a list identifying all
Mortgage Loans that became Converted Mortgage Loans or Modified Mortgage Loans
during the related Due Period. On the third Business Day prior to each
Distribution Date, provided that it has received such list from Xxxxxxxxx, the
Master Servicer shall prepare and provide to TMI a Converted Mortgage Loan
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Schedule and a Modified Mortgage Loan Schedule with respect to such Due Period.
No later than 1:00 PM Eastern Time on the second Business Day prior to each
Distribution Date, TMI shall purchase each Converted Mortgage Loan and Modified
Mortgage Loan, to the extent specified in a Converted Mortgage Loan Schedule or
Modified Mortgage Loan Schedule delivered to it by the Master Servicer for such
Distribution Date, at the applicable Purchase Price for each such Converted
Mortgage Loan or Modified Mortgage Loan, as applicable, and shall remit such
Purchase Price to the Master Servicer for deposit in the Distribution Account.
(d) If at any time Xxxxxxxxx or TMI, as applicable, remits to the
Master Servicer a payment for deposit in the Distribution Account covering the
amount of the Purchase Price for a Mortgage Loan of the type set forth in
clauses (a), (b) or (c) above, as applicable, and Xxxxxxxxx, or TMI, as
applicable, provides to the Trustee a certification signed by a Servicing
Officer stating that the amount of such payment has been deposited in the
Distribution Account, then the Trustee shall execute the assignment of such
Mortgage Loan at the request of Xxxxxxxxx or TMI without recourse to Xxxxxxxxx
or TMI, as applicable, which shall succeed to all the Trust's and/or the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. Xxxxxxxxx or TMI, as applicable, will thereupon
own such Mortgage Loan, and all such security and documents, free of any further
obligation to the Trust, the Trustee or the Certificateholders with respect
thereto.
SECTION 3.26. Realization upon Troubled Mortgage Loans.
The Master Servicer shall have the right to cause a Servicer to sell
or work out any Mortgage Loan as to which the Master Servicer reasonably
believes that default in payment is likely, provided, however, that, with
respect to any such sale of a Mortgage Loan by a Servicer, the related sale
price shall be no less than the Stated Principal Balance of such Mortgage Loan
as of the last day of the Due Period immediately preceding the date of such sale
plus accrued interest thereon through such sale date. Any and all proceeds from
such a sale shall be deemed to be Liquidation Proceeds hereunder and any such
Mortgage Loan which has been sold shall be deemed a Liquidated Mortgage Loan
hereunder.
SECTION 3.27. Closing Certificate and Opinion.
On or before the Closing Date, the Master Servicer shall cause to be
delivered to the Depositor, the Seller, the Trustee, and Bear, Xxxxxxx & Co.
Inc. an Opinion of Counsel, dated the Closing Date, in form and substance
reasonably satisfactory to the Depositor, Bear, Xxxxxxx & Co. Inc., and the
Seller as to the due authorization, execution and delivery of this Agreement by
the Master Servicer and the enforceability thereof.
SECTION 3.28. Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by it herein.
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SECTION 3.29. Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, 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.
SECTION 3.30. Indemnification of the Trustee, the Delaware Trustee,
the Master Servicer and the Securities Administrator.
(a) In addition to any indemnity required pursuant to Section 3.22
hereof, the Master Servicer agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (except as
otherwise provided herein with respect to expenses) (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained
in connection with, arising out of, or relating to this Agreement or the
Certificates (i) related to the Master Servicer's failure to perform its duties
in compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by
reason of the Master Servicer's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that with
respect to any such claim or legal action (or pending or threatened claim or
legal action), an Indemnified Person shall have given the Master Servicer and
the Depositor written notice thereof promptly after such Indemnified Person
shall have with respect to such claim or legal action knowledge thereof. The
Indemnified Person's failure to give such notice shall not affect the
Indemnified Person's right to indemnification hereunder. This indemnity shall
survive the resignation or removal of the Trustee, the Delaware Trustee, the
Master Servicer or the Securities Administrator and the termination of this
Agreement.
(b) The Trust will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise indemnified by the
Master Servicer as referred to in Subsection (a) above.
(c) In addition to any indemnity required pursuant to Section 3.22
hereof, the Securities Administrator agrees to indemnify the Indemnified Persons
(other than the Securities Administrator) for, and to hold them harmless
against, any loss, liability or expense (except as otherwise provided herein
with respect to expenses) (including reasonable legal fees and disbursements of
counsel) incurred on their part (i) in connection with, arising out of, or
relating to the Securities Administrator's failure to file any Exchange Act
report which the Securities
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Administrator is responsible for filing in accordance with Section 3.19, (ii) by
reason of the Securities Administrator's negligence or willful misconduct in the
performance of such obligations pursuant to Section 3.19 or (iii) by reason of
the Securities Administrator's reckless disregard of such obligations pursuant
to Section 3.19, provided, in each case, that with respect to any such claim or
legal action (or pending or threatened claim or legal action), an Indemnified
Person shall have given the Securities Administrator written notice thereof
promptly after such Indemnified Person shall have with respect to such claim or
legal action knowledge thereof. The Indemnified Person's failure to give such
notice shall not affect the Indemnified Person's right to indemnification
hereunder. This indemnity shall survive the resignation or removal of the
Trustee, the Delaware Trustee, the Master Servicer or the Securities
Administrator and the termination of this Agreement.
SECTION 3.31. Limitations on Liability of the Master Servicer and
Others; Indemnification of Trustee and Others.
Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 3.30:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent
of the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Delaware Trustee, the Trustee (in its
individual corporate capacity and as Trustee), the Custodian (including for such
purpose, the Trustee acting in its capacity as Custodian) and any director,
officer, employee or agent of the Master Servicer, the Delaware Trustee, the
Trustee or the Custodian shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (except as otherwise provided
herein with respect to expenses) (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or relating to, this Agreement, the
Certificates or any Servicing Agreement or the transactions contemplated hereby
or thereby (except, with respect to the Master Servicer, to the extent that the
Master Servicer is indemnified by the Servicer thereunder), other than (i) with
respect to the Master Servicer only, any such loss, liability or expense related
to the Master Servicer's failure to perform its duties in compliance with this
Agreement or (ii) with respect to the Master Servicer or Custodian only, any
such loss, liability or expense incurred by reason of the Master Servicer's or
the Custodian's willful misfeasance, bad faith or gross negligence in the
performance of its own duties hereunder or by
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reason of reckless disregard of its own obligations and duties hereunder or
under a custodial agreement.
(d) The Master Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Trust and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Distribution Account as
provided by Section 4.03. Nothing in this Subsection 3.31(d) shall affect the
Master Servicer's obligation to supervise, or to take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).
(e) 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 Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.
SECTION 3.32. Master Servicer Not to Resign.
Except as provided in Section 3.34, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it except upon a
determination that any such duties hereunder are no longer permissible under
applicable law and such impermissibility cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Independent Opinion of Counsel (delivered at the expense of the Master Servicer)
to such effect delivered to the Trustee. No such resignation by the Master
Servicer shall become effective until the Trustee or a successor to the Master
Servicer reasonably satisfactory to the Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.02 hereof. The Trustee shall notify each Rating Agency of the
resignation of the Master Servicer.
SECTION 3.33. Successor Master Servicer.
In connection with the appointment of any successor master servicer or
the assumption of the duties of the Master Servicer, the Trustee may make such
arrangements for the compensation of such successor master servicer out of
payments on the Mortgage Loans as the Trustee and such successor master servicer
shall agree which in no case shall exceed the Master Servicing Fee, plus the
portion of investment income on amounts on deposit in the Distribution Account
to which the Master Servicer is entitled hereunder. If the successor master
servicer does not agree that the proposed compensation is fair, such successor
master servicer shall obtain two
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quotations of market compensation from third parties actively engaged in the
servicing of single-family mortgage loans; provided, however, that Xxxxxxxxx, as
a Servicer of a portion of the Mortgage Loans, shall have the right, but not the
obligation, to be appointed successor master servicer in the event that the
Trustee, in its sole discretion, decides not to assume the duties of the Master
Servicer itself; and provided, further, that each Rating Agency shall confirm in
writing that any appointment of a successor Master Servicer (other than the
Trustee) will not result in a downgrade in the then current rating of any Class
of Certificates.
SECTION 3.34. Sale and 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, with the written consent of Xxxxxxxxx in its capacity as a Servicer
of a portion of the Mortgage Loans, to be given in its sole discretion, and
provided further that: (i) the purchaser or transferee accepting such assignment
and delegation (a) shall be a Person which shall be qualified to service
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not
less than $10,000,000 (unless otherwise approved by each Rating Agency pursuant
to clause (ii) below); (c) shall be reasonably satisfactory to Xxxxxxxxx and the
Trustee (as evidenced in writing signed by Xxxxxxxxx and the Trustee); and (d)
shall execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, 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 ratings 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 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,
(delivered at the Master Servicer's expense) 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 prior to the effective date thereof.
SECTION 3.35. Reporting Requirements of the Commission.
To the extent that, following the Closing Date, the content of Forms
8-K, 10-D, 10-K, 15 or other Forms required by the Exchange Act and the Rules
and Regulations of the Commission and the time by which such Forms are required
to be filed, differs from the provisions of this Agreement, the Master Servicer
and the Securities Administrator hereby agree that each shall reasonably
cooperate to amend the provisions of this Agreement (in accordance with Section
12.01) in order to comply with such amended reporting requirements and such
amendment of this Agreement. Notwithstanding the foregoing, neither the Master
Servicer nor the Securities Administrator shall be obligated to enter into any
amendment pursuant to this Section that adversely affects its obligations or
immunities under this Agreement.
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ARTICLE IV
ACCOUNTS
SECTION 4.01. Servicing Accounts.
(a) The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain one or more custodial accounts (the "SERVICING
ACCOUNTS") in accordance with the applicable Servicing Agreement, with records
to be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which accounts shall be deposited within 48 hours (or as of such other time
specified in the related Servicing Agreement) of receipt all collections of
principal and interest on any Mortgage Loan and with respect to any REO Property
received by a Servicer, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, Recoveries and advances made from the Servicer's own funds
(less, in the case of each Servicer, the applicable servicing compensation, in
whatever form and amounts as permitted by the applicable Servicing Agreement)
and all other amounts to be deposited in each such Servicing Account. The
Servicer is hereby authorized to make withdrawals from and deposits to the
related Servicing Account for purposes required or permitted by this Agreement
and the applicable Servicing Agreement. For the purposes of this Agreement,
Servicing Accounts shall also include such other accounts as the Servicer
maintains for the escrow of certain payments, such as taxes and insurance, with
respect to certain Mortgaged Properties. Each Servicing Agreement sets forth the
criteria for the segregation, maintenance and investment of each related
Servicing Account, the contents of which are acceptable to the parties hereto as
of the date hereof and changes to which shall not be made unless such changes
are made in accordance with the provisions of Section 12.01 hereof.
(b) [Reserved];
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, each
Servicer shall withdraw or shall cause to be withdrawn from the related
Servicing Accounts and shall immediately deposit or cause to be deposited in the
Distribution Account amounts representing the following collections and payments
(other than with respect to principal of or interest on the Mortgage Loans due
on or before the Cut-off Date) with respect to each of the Mortgage Loans it is
servicing:
(i) Monthly Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicers pursuant to the Servicing
Agreements which were due on or before the related Due Date but net of the
amount thereof comprising the Servicing Fees;
(ii) Principal Prepayments in full and any Liquidation Proceeds
received by the Servicers with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees and
any Recoveries received in the related Prepayment Period;
(iii) Principal Prepayments in part received by the Servicers for
such Mortgage Loans in the related Prepayment Period;
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(iv) Prepayment Penalty Amounts, if any, and only if required
under the related Servicing Agreement; and
(v) any amount to be used as a delinquency advance or to pay any
Interest Shortfalls, in each case, as required to be paid under the related
Servicing Agreement.
(d) Withdrawals may be made from a Servicing Account only to make
remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and
4.02(b), certain amounts otherwise due to the Servicers may be retained by them
and need not be deposited in the Distribution Account.
Notwithstanding anything herein to the contrary, the Master
Servicer shall not be responsible for verifying the accuracy of any Prepayment
Penalty.
SECTION 4.02. Distribution Account.
(a) The Securities Administrator shall establish and maintain in the
name of the Trustee, for the benefit of the Trust and the Certificateholders,
the Distribution Account as a segregated account or accounts, each of which
shall be an Eligible Account. The Distribution Account shall constitute an
account of the Trust segregated on the books of the Securities Administrator and
held by the Securities Administrator in trust in its Corporate Trust Office, and
the Distribution Account and the funds deposited therein shall not be subject
to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Trustee, the Securities Administrator or the
Master Servicer (whether made directly, or indirectly through a liquidator or
receiver of the Trustee, the Securities Administrator or the Master Servicer).
The amount at any time credited to the Distribution Account shall be (i) fully
insured by the FDIC to the maximum coverage provided thereby or (ii) invested by
the Securities Administrator, in Permitted Investments, in accordance with
Section 4.02(c). All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the immediately
succeeding Distribution Date. With respect to the Distribution Account and the
funds deposited therein, the Securities Administrator shall take such action as
may be necessary to ensure that the Trust and the Certificateholders shall be
entitled to the priorities afforded to such an account (in addition to a claim
against the estate of the Securities Administrator or the Trustee) as provided
by 12 U.S.C. Section 92a(e), and applicable regulations pursuant thereto, if
applicable, or any applicable comparable state statute applicable to state
chartered banking corporations, if applicable. The Securities Administrator,
Trustee or their affiliates are permitted to receive additional compensation
that could be deemed to be in the their economic self-interest for (i) serving
as investment adviser, administrator, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments. The Master Servicer and
the Securities Administrator will deposit in the Distribution Account as
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identified by the Master Servicer or the Securities Administrator and as
received by the Master Servicer or the Securities Administrator, the following
amounts:
(i) any amounts withdrawn from a Servicing Account pursuant to
Section 4.01(c);
(ii) any Advance and any Compensating Interest Payments required
to be made by the Master Servicer to the extent required but not made by a
Servicer;
(iii) any Insurance Proceeds, Liquidation Proceeds or Recoveries
received by or on behalf of the Master Servicer or which were not deposited
in a Servicing Account;
(iv) the Purchase Price with respect to any Mortgage Loans
purchased by the Seller under this Agreement, any Substitution Adjustments
pursuant to Section 2.03 of this Agreement, the Purchase Price with respect
to any Mortgage Loans purchased by Xxxxxxxxx or TMI pursuant to Section
3.25, and all proceeds of any Mortgage Loans or property acquired with
respect thereto repurchased by the Xxxxxxxxx pursuant to Section 10.01;
(v) any amounts required to be deposited with respect to losses
on investments of deposits in the Distribution Account; and
(vi) any other amounts received by or on behalf of the Master
Servicer or the Securities Administrator and required to be deposited in
the Distribution Account pursuant to this Agreement.
(b) All amounts deposited to the Distribution Account shall be held by
the Securities Administrator in the name of the Trustee in trust for the benefit
of the Trust and Certificateholders in accordance with the terms and provisions
of this Agreement. The requirements for crediting the Distribution Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of (i) late payment charges
or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges (but including, in the
case of Xxxxxxxxx, all Prepayment Penalty Amounts) and (ii) the items enumerated
in Subsections 4.03(a)(i), (ii), (iii), (iv), (vi), (vii), (ix), (x) and with
respect to the Securities Administrator item (xi), need not be credited by the
Master Servicer or the related Servicer to the Distribution Account. In the
event that the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Securities Administrator, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Distribution Account shall
be invested, in the name of the Trustee, or its nominee, for the benefit of the
Certificateholders, in Permitted Investments as follows. All net earnings on
Permitted Investments shall be for the benefit of Xxxxxxxxx, in its capacity as
Servicer, except that the investment income with respect to the investment of
funds in the Distribution Account made on the Business Day prior to each
Distribution Date shall be for the benefit of the Master Servicer. All Permitted
Investments made for the benefit of Xxxxxxxxx shall be made at the written
direction of Xxxxxxxxx to the Master Servicer (or, if no such written direction
is received, in investments of the type specified
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in clause (vi) of the definition of Permitted Investments), shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
Business Day prior to the next succeeding Distribution Date. Any and all
investment earnings from such Permitted Investments shall be paid to Xxxxxxxxx,
and the risk of loss of moneys resulting from such investments shall be borne by
and be the risk of Xxxxxxxxx. Xxxxxxxxx shall deposit the amount of any such
loss in the Distribution Account within two Business Days of receipt of
notification of such loss but not later than the next succeeding Distribution
Date.
All Permitted Investments made for the benefit of the Master Servicer
shall be in such Permitted Investments as shall be selected by the Master
Servicer and shall mature (and be subject to withdrawal and be held until) the
next succeeding Distribution Date. Any and all investment earnings from such
Permitted Investments shall be paid to the Master Servicer and the risk of loss
on such Permitted Investments shall be borne by and be the risk of the Master
Servicer. The Master Servicer shall deposit the amount of any such loss in the
Distribution Account no later than the next succeeding Distribution Date.
SECTION 4.03. Permitted Withdrawals and Transfers from the
Distribution Account.
(a) The Master Servicer will, from time to time on demand of a
Servicer, the Securities Administrator, or for its own account as set forth
below, make or cause to be made such withdrawals or transfers from the
Distribution Account, in the case of a demand by a Servicer, as the applicable
Servicer has designated for such transfer or withdrawal pursuant to the
applicable Servicing Agreement, or in the case of a demand by the Securities
Administrator as the Securities Administrator has demanded pursuant hereto, or
as the Master Servicer has determined to be appropriate in accordance herewith,
for the following purposes:
(i) to reimburse the Master Servicer or any Servicer for any
Advance of its own funds or of such Servicer's own funds, the right of the
Master Servicer or a Servicer to reimbursement pursuant to this subclause
(i) being limited to amounts received on a particular Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late payments or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such Servicer
in good faith in connection with the restoration of the related Mortgaged
Property which was damaged by an Uninsured Cause or in connection with the
liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse the
Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect to
such Mortgage Loan;
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(iv) to pay the Master Servicer or any Servicer, as appropriate,
from Liquidation Proceeds or Insurance Proceeds received in connection with
the liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under subclause (viii) of this
Subsection 4.03(a) as servicing compensation on account of each defaulted
scheduled payment on such Mortgage Loan if paid in a timely manner by the
related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase
Price for any Mortgage Loan, the amount which it or such Servicer would
have been entitled to receive under subclause (viii) of this Subsection (a)
as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for
servicing related advances of funds, the right to reimbursement pursuant to
this subclause being limited to amounts received on the related Mortgage
Loan (including, for this purpose, the Purchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such servicing advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any
Advance or advance, after a Realized Loss has been allocated with respect
to the related Mortgage Loan if the Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer its monthly Master Servicing
Fee and any investment income and other additional servicing compensation
payable pursuant to Section 3.14;
(ix) to reimburse the Master Servicer or the Securities
Administrator for any expenses recoverable by the Master Servicer or the
Securities Administrator pursuant to Sections 3.03 and 3.31;
(x) to pay Xxxxxxxxx, as a Servicer, any Prepayment Penalty
Amounts and any earnings payable pursuant to Section 4.02(c), and to
reimburse or pay any Servicer any such amounts as are due thereto under the
applicable Servicing Agreement and have not been retained by or paid to the
Servicer, to the extent provided in the related Servicing Agreement;
(xi) to reimburse the Trustee, the Delaware Trustee and the
Securities Administrator for expenses, costs and liabilities incurred by or
reimbursable to it from funds of the Trust pursuant to Sections 3.30, 3.31
or 8.05 (including those related to the Custodian, to the extent not paid
by Xxxxxxxxx), and to reimburse the Trustee for any fees, costs and
expenses costs incurred by or reimbursable to it pursuant to Section
2.03(a), 7.01(b), 8.02, 8.05 or 8.07, to the extent not otherwise
reimbursed to it;
(xii) to make distributions of Retained Interest to the Retained
Interest Holder on each Distribution Date;
(xiii) to pay to Xxxxxxxxx (in its capacity as a Servicer) all
investment earnings on amounts on deposit in the Distribution Account to
which it is entitled under Section 4.02(c);
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(xiv) to remove amounts deposited in error; and
(xv) to clear and terminate the Distribution Account pursuant to
Section 10.01.
(b) In addition, on or before the Business Day immediately preceding
each Distribution Date, the Master Servicer shall deposit in the Distribution
Account (or remit to the Securities Administrator for deposit therein) any
Advances or Compensating Interest Payments, to the extent required but not made
by the related Servicer and required to be made by the Master Servicer with
respect to the Mortgage Loans.
(c) The Securities Administrator or the Master Servicer shall keep and
maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of accounting for any payments or reimbursements from the Distribution
Account pursuant to subclauses (i) through (vii), inclusive, (ix) and (x) or
with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).
(d) In order to comply with its duties under the USA PATRIOT Act of
2001, the Securities Administrator shall obtain and verify certain information
and documentation from the other parties hereto, including, but not limited to,
each such party's name, address and other identifying information.
(e) On each Distribution Date, the Securities Administrator shall
distribute the aggregate Available Funds to the Holders of the Certificates in
accordance with Section 5.01.
ARTICLE V
FLOW OF FUNDS
SECTION 5.01. Distributions.
(a) On each Distribution Date and after making any withdrawals from
the Distribution Account pursuant to Section 4.03(a), the Securities
Administrator shall withdraw funds on deposit in the Distribution Account to the
extent of Available Funds for such Distribution Date (and, solely in the case of
distributions under clause (a)(ii) below, the amounts received from the Yield
Maintenance Agreement) and, based on the Distribution Date Statement, shall make
the following disbursements and transfers in the following order of priority:
(i) to the Holders of the Class A-R, Class A-1, Class A-2 and
Class A-X Certificates, the related Interest Distributable Amounts for such
date, pro rata (based on the Interest Distributable Amounts to which each
such Class is entitled); provided, however, for purposes of computing the
Interest Distributable Amounts under this clause (a)(i) applicable to the
Class A-1 Certificates and Class A-2 Certificates, the Pass Through Rate of
each such Class shall be deemed to be subject to a cap equal to the Net
WAC, adjusted to reflect the accrual of interest on the basis of a 360-day
year and the actual number of days elapsed in the related Accrual Period
with respect to such Certificates; and
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(ii) from the funds, if any, provided under the Yield Maintenance
Agreement, first, to the Holders of the Class A-1 Certificates and Class
A-2 Certificates, pro rata based on any remaining Interest Distributable
Amounts, any Interest Distributable Amounts not distributed to such Class
in clause (a)(i) above, and second, any remaining funds provided under the
Yield Maintenance Agreement shall be distributed to the Class A-X
Certificates; and
(iii) an amount equal to the Senior Principal Distribution Amount
for that Distribution Date, as follows:
first, to the Holder of Class A-R Certificate, until
the Class Certificate Principal Balance of such Class
is reduced to zero; and
second, to the Holders of the Class A-1 Certificates
and the Class A-2 Certificates, pro rata, in proportion
to their respective Class Certificate Principal
Balances, until the Class Certificate Principal Balance
of each such Class is reduced to zero;
(iv) the Available Funds remaining after giving effect to the
distributions specified in subsection (a)(i) through (a)(iii)above will be
distributed to the Certificateholders in the following order of priority:
(A) to the Holders of the Class B-1 Certificates, the
related Interest Distributable Amount for that date;
(B) to the Holders of the Class B-1 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Principal Balance of such Class is reduced to zero;
(C) to the Holders of the Class B-2 Certificates, the
related Interest Distributable Amount for that date;
(D) to the Holders of the Class B-2 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Principal Balance of such Class is reduced to zero;
(E) to the Holders of the Class B-3 Certificates, the
related Interest Distributable Amount for that date;
(F) to the Holders of the Class B-3 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date
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until the Class Certificate Principal Balance of such
Class is reduced to zero;
(G) to the Holders of the Class B-4 Certificates, the
related Interest Distributable Amount for that date;
(H) to the Holders of the Class B-4 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Principal Balance of such Class is reduced to zero;
(I) to the Holders of the Class B-5 Certificates, the
related Interest Distributable Amount for that date;
(J) to the Holders of the Class B-5 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Principal Balance of such Class is reduced to zero;
(K) to the Holders of the Class B-6 Certificates, the
related Interest Distributable Amount for that date;
(L) to the Holders of the Class B-6 Certificates, an amount
allocable to principal equal to its Pro Rata Share for
such Distribution Date until the Class Certificate
Principal Balance of such Class is reduced to zero; and
(M) to the Holder of the Class A-R Certificate, any
Available Funds then remaining.
(b) Amounts to be paid to the Holders of a Class of Certificates shall
be payable with respect to all Certificates of that Class, pro rata, based on
the Certificate Principal Balance or Certificate Notional Balance, as
applicable, of each Certificate of that Class.
(c) [Reserved].
(d) On each Distribution Date, the Interest Distributable Amounts for
the Classes of Senior Certificates and Subordinate Certificates on such
Distribution Date shall be reduced proportionately by Net Interest Shortfalls
based on the Monthly Interest Distributable Amount otherwise distributable
thereon before taking into account any reduction in those amounts due to such
Net Interest Shortfalls.
(e) Notwithstanding the priority and allocation set forth in Section
5.01(a) above, if with respect to any Class of Subordinate Certificates on any
Distribution Date the sum of the related Class Subordination Percentages of such
Class and of all other Classes of Subordinate Certificates which have a higher
numerical Class designation than such Class (the "APPLICABLE
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CREDIT SUPPORT PERCENTAGE") is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments will be made
to any such Classes (the "RESTRICTED CLASSES") and the amount of such Principal
Prepayment otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Subordinate Certificates having lower numerical
Class designations than such Class, pro rata, based on the Class Certificate
Principal Balances of the respective Classes immediately prior to such
Distribution Date.
(f) [Reserved.]
(g) Distributions on Physical Certificates. The Securities
Administrator shall make distributions in respect of a Distribution Date to each
Certificateholder of record on the related Record Date (other than as provided
in Section 10.01 hereof respecting the final distribution), in the case of
Certificateholders of the Physical Certificates, by check or money order mailed
to such Certificateholder at the address appearing in the Certificate Register,
or by wire transfer. Distributions among Certificateholders of a Class shall be
made in proportion to the Percentage Interests evidenced by the Certificates of
that Class held by such Certificateholders.
(h) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which shall
credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor or the Seller shall have any
responsibility therefor.
SECTION 5.02. [Reserved].
SECTION 5.03. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Securities
Administrator shall aggregate the loan-level information provided by the Master
Servicer with respect to the total amount of Realized Losses, if any, with
respect to the Mortgage Loans for the related Distribution Date and include such
information in the Distribution Date Statement.
(b) Realized Losses shall be allocated on any Distribution Date as
follows:
first, to the Subordinate Certificates in reverse order
of their respective numerical Class designations
(beginning with the Class of Subordinate Certificates
with the highest numerical Class designation) until the
Class Certificate Principal Balance of each such Class
is reduced to zero;
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second, to the Class A-2 Certificates until the Class
Certificate Principal Balance of such Class is reduced
to zero; and
third, to the Class A-1 Certificates until the Class
Certificate Principal Balance of such Class is reduced
to zero.
(c) On each Distribution Date, the Class Certificate Principal Balance
of the Class of Subordinate Certificates then outstanding with the highest
numerical Class designation shall be reduced, and if no Subordinate Certificates
are Outstanding, then the Class Certificate Principal Balance of the Class A-2
Certificates and when they are no longer outstanding the Class A-1 Certificates,
shall be reduced, in each case, by the amount, if any, by which the aggregate of
the Class Certificate Principal Balances of all outstanding Classes of
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses on such Distribution Date) exceeds the aggregate
of the Stated Principal Balances of all the Mortgage Loans for the following
Distribution Date.
(d) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Certificate Principal Balance of a Class of Certificates
pursuant to Section 5.03(b) or (c) shall be allocated among the Certificates of
such Class, pro rata, in proportion to their respective Certificate Principal
Balances.
(e) Any allocation of Realized Losses to a Certificate or any
reduction in the Certificate Principal Balance of a Certificate pursuant to
Section 5.03(b) or (c) shall be accomplished by reducing the Certificate
Principal Balance thereof immediately following the distributions made on the
related Distribution Date in accordance with the definition of "Certificate
Principal Balance."
SECTION 5.04. Statements.
(a) Two Business Days prior to the Auction Distribution Date, the
Securities Administrator shall make available to the Auction Administrator, and
concurrently with each distribution to Certificateholders, the Securities
Administrator shall make available to each Certificateholder, the Seller, the
Master Servicer, the Trustee, the Yield Maintenance Counterparty and the Rating
Agencies, a statement based, as applicable, on loan-level information provided
to it by the Master Servicer and the Servicers (the "DISTRIBUTION DATE
STATEMENT") as to the distributions to be made or made, as applicable, on such
Distribution Date. Information in the Distribution Date Statement relating to or
based on amounts available in the Yield Maintenance Account shall be based on
information provided by the Yield Maintenance Counterparty regarding any Yield
Maintenance Amount required to be paid by the Yield Maintenance Counterparty for
the related Distribution Date pursuant to the Yield Maintenance Agreement. The
Distribution Date Statement shall include the following:
(i) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to principal;
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(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest;
(iii) the Senior Percentage, Senior Prepayment Percentage,
Subordinate Percentage and Subordinate Prepayment Percentage for the
following Distribution Date;
(iv) the aggregate amount of servicing compensation received by
each Servicer during the related Due Period;
(v) the aggregate amount of Advances for the related Due Period
and the amount of unreimbursed Advances;
(vi) the number of Mortgage Loans, the Pool Balance and the Net
WAC at the Close of Business at the end of the related Due Period;
(vii) the aggregate Principal Balance of the One-Year CMT Indexed
Mortgage Loans and Three-Year CMT Indexed Mortgage Loans at the Close of
Business at the end of the related Due Period;
(viii) the aggregate Principal Balance of the Six-Month LIBOR
Indexed, One-Month LIBOR Indexed and One-Year LIBOR Indexed Mortgage Loans
at the Close of Business at the end of the related Due Period;
(ix) the amount of the Master Servicer Fees paid to or retained
by the Master Servicer;
(x) the aggregate amount of Servicer Fees paid to or retained by
the Servicers;
(xi) the amount of fees, expenses or indemnification amounts paid
by the Trust with an identification of the general purpose of such amounts
and the party receiving such amounts;
(xii) the number, weighted average remaining term to maturity,
weighted average life and weighted average Loan Rate of the Mortgage Loans
as of the related Due Date;
(xiii) the number and aggregate unpaid principal balance of
Mortgage Loans, in the aggregate using the "MBA" method, (a) 30 to 59 days
Delinquent, (b) 60 to 89 days Delinquent, (c) 90 or more days Delinquent,
(d) as to which foreclosure proceedings have been commenced and (e) in
bankruptcy, in each case as of the close of business on the last day of the
preceding calendar month;
(xiv) the rolling six-month delinquency rate for that
Distribution Date;
(xv) the total number and cumulative principal balance of all REO
Properties as of the Close of Business of the last day of the preceding Due
Period;
(xvi) the aggregate amount of Principal Prepayments and
Prepayment Penalty Amounts made during the related Prepayment Period;
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(xvii) the aggregate amount of Realized Losses and Recoveries
incurred during the related Due Period and the cumulative amount of
Realized Losses and Recoveries as of such Distribution Date;
(xviii) the Realized Losses and Recoveries, if any, allocated to
each Class of Certificates on the related Distribution Date;
(xix) the Class Certificate Principal Balance or Class
Certificate Notional Balance, as applicable, of each Class of Certificates
after giving effect to any distributions made thereon, on such Distribution
Date;
(xx) the Interest Distributable Amount in respect of each Class
of Certificates, for such Distribution Date and the respective portions
thereof, if any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date;
(xxi) the aggregate amount of any Net Interest Shortfalls and the
Unpaid Interest Shortfall Amount for such Distribution Date;
(xxii) the Available Funds;
(xxiii) the Pass-Through Rate for each Class of Certificates for
such Distribution Date and, through the Auction Distribution Date, the
level of LIBOR used to determine the applicable Pass-Through Rate;
(xxiv) the aggregate Principal Balance of Mortgage Loans
purchased hereunder by the Seller or TMI during the related Due Period, and
indicating the relevant section of the related Servicing Agreement, or the
Section of this Agreement, as applicable, requiring or allowing the
purchase of each such Mortgage Loan;
(xxv) (A) the amount paid to the Class A-1 and Class A-2
Certificates from the Yield Maintenance Amount received from the Yield
Maintenance Counterparty for such period, expressed as a per annum rate and
as a dollar amount, (B) the amount paid to the Class A-X Certificates from
any excess Yield Maintenance Amount received under the Yield Maintenance
Agreement expressed as a per annum rate and as a dollar amount and (C) the
Yield Maintenance Amount and applicable strike rate under the Yield
Maintenance Agreement for such Distribution Date; and
(xxvi) on the Auction Distribution Date, the Par Price (as
defined in the Auction Administration Agreement) for each Class of Auction
Certificates as reported to the Master Servicer by the Securities
Administrator.
The Securities Administrator will make the Distribution Date Statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders and the other
parties to this Agreement via the Securities Administrator's internet website.
The Securities Administrator's internet website shall initially be located at
"xxx.xxxxxxx.xxx." Assistance in using the website can be obtained by calling
the Securities Administrator's customer service desk at (000) 000-0000. Parties
that are unable to
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use the above distribution option 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 such
reports are distributed in order to make such distribution more convenient
and/or more accessible to the parties, and the Securities Administrator shall
provide timely and adequate notification to all parties regarding any such
change.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-Off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Securities Administrator shall, upon written request, furnish to each
Person who at any time during the calendar year was a Certificateholder of a
Regular Certificate, if requested in writing by such Person, such information as
is reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i), (ii) and (iv) above, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Certificateholder and such other customary information which a Certificateholder
reasonably requests to prepare its tax returns. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished by the
Securities Administrator to Certificateholders pursuant to any requirements of
the Code as are in force from time to time.
(c) On each Distribution Date, the Securities Administrator shall
supply an electronic tape to Bloomberg Financial Markets, Inc. in a format
acceptable to Bloomberg Financial Markets, Inc. on a monthly basis, and shall
supply an electronic tape to Loan Performance and Intex Solutions in a format
acceptable to Loan Performance and Intex Solutions on a monthly basis.
SECTION 5.05. Remittance Reports; Advances.
(a) No later than the second Business Day following each Determination
Date, the Master Servicer shall deliver to the Securities Administrator by
telecopy or electronic mail (or by such other means as the Master Servicer and
the Securities Administrator may agree from time to time) the Remittance Report
with respect to the related Distribution Date. Not later than the Close of
Business New York time three Business Days prior to the related Distribution
Date, the Master Servicer shall deliver or cause to be delivered to the
Securities Administrator in addition to the information provided on the
Remittance Report, such other loan-level information reasonably available to it
with respect to the Mortgage Loans as the Securities Administrator may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 5.01.
(b) If the Monthly Payment on a Mortgage Loan that was due on a
related Due Date and is delinquent, other than as a result of application of the
Relief Act or similar state or local law, and for which the related Servicer was
required to make an advance pursuant to the related Servicing Agreement exceeds
the amount deposited in the Distribution Account which will be
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used for an advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Distribution Account not later than the Business Day immediately
preceding the related Distribution Date an amount equal to such deficiency, net
of the Servicing Fee and the Master Servicing Fee, for such Mortgage Loan except
to the extent the Master Servicer determines any such Advance to be
Nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments
on the Mortgage Loan for which such Advance was made. Subject to the foregoing,
the Master Servicer shall continue to make such Advances through the date that
the related Servicer is required to do so under its Servicing Agreement. If
applicable, on the Business Day immediately preceding the related Distribution
Date, the Master Servicer shall present an Officer's Certificate to the
Securities Administrator and the Trustee (i) stating that the Master Servicer
elects not to make a Advance in a stated amount and (ii) detailing the reason it
deems the advance to be Nonrecoverable.
SECTION 5.06. Compensating Interest Payments.
The amount of the Master Servicing Fee payable to the Master Servicer
in respect of any Distribution Date shall be reduced (but not below zero) by the
amount of any Compensating Interest Payment for such Distribution Date, but only
to the extent that Interest Shortfalls relating to such Distribution Date are
required to be paid but are not actually paid by the related Servicers on the
applicable Servicer Remittance Date. Such amount shall not be treated as an
Advance and shall not be reimbursable to the Master Servicer.
SECTION 5.07. [Reserved].
SECTION 5.08. [Reserved].
SECTION 5.09. Yield Maintenance Account.
(a) The Securities Administrator is hereby directed by the Depositor
to execute and deliver the Yield Maintenance Agreement on behalf of the Trust,
for the benefit of the Class A-1 and Class A-2 Certificates (the "YIELD
MAINTENANCE AGREEMENT"), in the form presented to it by the Depositor and shall
have no responsibility for the contents, adequacy or sufficiency of the Yield
Maintenance Agreement, including, without limitation, the representations and
warranties contained therein. Each Holder of a Certificate is deemed, by
acceptance of such Certificate, to authorize the Securities Administrator to
execute and deliver the Yield Maintenance Agreement.
(b) The Securities Administrator shall establish and maintain an
account, for the benefit of the Class A-1 and Class A-2 Certificates, as a
segregated non-interest bearing trust account which shall be an Eligible Account
(the "YIELD MAINTENANCE ACCOUNT"). Pursuant to the Yield Maintenance Agreement,
the Yield Maintenance Counterparty shall have provided the Securities
Administrator, the Trustee and the Master Servicer with notice of the Yield
Maintenance Amount, if any, to be paid by the Yield Maintenance Counterparty to
the Securities Administrator for the account of the Trust pursuant to the Yield
Maintenance Agreement for each Distribution Date. Any Yield Maintenance Amount
received by the Securities Administrator pursuant to the Yield Maintenance
Agreement in connection with each such
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Distribution Date shall be deposited into the Yield Maintenance Account. On each
Distribution Date, the Securities Administrator on behalf of the Trust shall
distribute amounts on deposit in the Yield Maintenance Account in the following
order of priority:
first, to the Holders of the Class A-1 Certificates and
the Class A-2 Certificates, from amounts received under
the Yield Maintenance Agreement in accordance with
Section 5.01(a)(ii); and
second, to the Holders of the Class A-X Certificates.
(c) Upon termination of the Yield Maintenance Agreement and payment of
all amounts owed by the Yield Maintenance Counterparty thereunder, following
application by the Securities Administrator of funds in the Yield Maintenance
Account on the next succeeding Distribution Date to pay amounts owed pursuant to
this Section and Section 5.01, the Securities Administrator shall terminate the
Yield Maintenance Account.
SECTION 5.10. Recoveries.
(a) The Class Certificate Principal Balance of any Class of
Certificates to which a Realized Loss has been allocated (including any such
Class for which the related Class Certificate Principal Balance has been reduced
to zero) will be increased up to the amount of Recoveries for such Distribution
Date as follows:
(i) first, to increase the Class Certificate Principal Balance of
each such Class of Senior Certificates, up to the amount of Realized
Losses previously allocated to reduce the Class Certificate Principal
Balance for each such Class, and
(ii) second, to increase the Class Certificate Principal Balance
of each such Class of Subordinate Certificates, in order of seniority,
up to the amount of Realized Losses previously allocated to reduce the
Class Certificate Principal Balance for each such Class.
(b) Any increase to the Class Certificate Principal Balance of a Class
of Certificates shall increase the Certificate Principal Balance of each
Certificate of the related Class pro rata in accordance with the applicable
Percentage Interest.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates.
The Certificates shall be substantially in the form annexed hereto as
Exhibit A through E. Each of the Certificates shall, on original issue, be
executed by the Securities Administrator, and authenticated and delivered by the
Securities Administrator upon the written order of the Depositor concurrently
with the sale and assignment to the Trustee of the Trust Fund. Each
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Class of the Regular Certificates shall be initially evidenced by one or more
Certificates representing a Percentage Interest with a minimum dollar
denomination of $25,000 and integral dollar multiples of $1 in excess thereof,
in the case of the Class A-1, Class A-2, Class B-1, Class B-2 and Class B-3
Certificates (provided, that, with respect to initial European investors such
Certificates must be purchased in minimum total investments of at least
$100,000), and $100,000 and integral dollar multiples of $1 in excess thereof,
in the case of the Class A-X, Class B-4, Class B-5 and Class B-6 Certificates,
except that one Certificate of each such Class of Certificates may be in a
different denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Class Certificate Principal Balance
or Class Certificate Notional Balance of such Class on the Closing Date. The
Class A-R Certificate is issuable only in a Percentage Interest of 100%.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer or the
Securities Administrator. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures were
affixed, authorized to sign on behalf of the Trustee or Securities Administrator
shall bind the Trust, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement or be valid
for any purpose, unless such Certificate shall have been manually authenticated
by the Trustee or Securities Administrator substantially in the form provided
for herein, and such 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. Subject to Section 6.02(c), the Senior Certificates
(other than the Residual Certificate) and the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates shall be Book-Entry
Certificates. The Residual Certificate shall be a Physical Certificate.
The Private Certificates shall be offered and sold in reliance on the
exemption from registration under Rule 144A of the Securities Act and, shall be
issued initially in the form of one or more permanent global Certificates in
definitive, fully registered form with the applicable legends set forth in
Exhibit A (each, a "RESTRICTED GLOBAL SECURITY"), 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, duly executed and authenticated by the Securities Administrator
as hereinafter provided. The aggregate principal amounts of the Restricted
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Securities Administrator and DTC or its nominee, as
the case may be, as hereinafter provided.
SECTION 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Securities Administrator shall initially serve
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as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph (or, so long as the Securities Administrator
serves as Certificate Registrar, the office of the Certificate Registrar located
at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, or such
other office or agency that the Certificate Registrar shall designate), the
Securities Administrator on behalf of the Trust shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Securities Administrator shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Securities
Administrator or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer satisfactory to the Securities
Administrator and the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) or (d) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Securities Administrator or the Certificate Registrar
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee, the Securities Administrator and the Certificate Registrar shall
for all purposes deal with the Depository as representative of the Certificate
Owners of the Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee, the Securities
Administrator and the Certificate Registrar may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Securities
Administrator, the Certificate Registrar and their respective agents, employees,
officers and directors as the absolute owner of the Certificates for all
purposes whatsoever.
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All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee or
the Securities Administrator in writing that the Depository is no longer willing
or able to discharge properly its responsibilities as Depository and (y) the
Trustee, the Securities Administrator or the Depositor is unable to locate a
qualified successor or (ii) after the occurrence and continuation of an Event of
Default, Holders of Book-Entry Certificates having not less than 51% of the
aggregate Certificate Principal Balance of the Certificates advise the Trustee,
the Securities Administrator and the Depository in writing through the
Depository Participants that the continuation of a book-entry system with
respect to Certificates through the Depository (or its successor) is no longer
in the best interests of the Holders, then the Trustee or the Securities
Administrator shall request that the Depository notify all Holders of the
occurrence of any such event and of the availability of definitive, fully
registered Certificates to Holders requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Securities Administrator shall, at the Seller's expense, execute on behalf
of the Trust and authenticate definitive, fully registered certificates (the
"DEFINITIVE CERTIFICATES"). None of the Depositor, the Securities Administrator
or the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Securities Administrator, the Certificate Registrar, any Paying Agent and the
Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act, and any applicable state
securities laws or is made in accordance with the Securities Act and laws. Any
Private Certificates sold to an "accredited investor" under Rule 501(a)(1), (2),
(3) or (7) under the Securities Act shall be issued only in the form of one or
more Definitive Certificates and the records of the Securities Administrator and
DTC or its nominee shall be adjusted to reflect the transfer of such Definitive
Certificates. In the event of any transfer of any Private Certificate in the
form of a Definitive Certificate, the transferee shall certify (i) (A) such
transfer is made to a Qualified Institutional Buyer in reliance upon Rule 144A
(as evidenced by the investment letter delivered to the Securities
Administrator, in substantially the form attached hereto as Exhibit J-2) under
the Securities Act, or (B) such transfer is made to an "accredited investor"
under Rule 501(c)(1), (2), (3) or (7) under the Securities Act (as evidenced by
an investment letter delivered to the Securities Administrator, in substantially
the form attached hereto as Exhibit J-1, and, if so required by the Securities
Administrator, a written Opinion of Counsel (which may be in-house counsel)
acceptable to and in form and substance reasonably
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satisfactory to the Securities Administrator is delivered to the Securities
Administrator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the Securities
Act or is being made pursuant to the Securities Act, which Opinion of Counsel
shall not be an expense of the Trustee, the Securities Administrator or the
Depositor or (ii) the Securities Administrator shall require the transferor to
execute a transferor certificate and the transferee to execute an investment
letter acceptable to and in form and substance reasonably satisfactory to the
Depositor and the Securities Administrator certifying to the Depositor and the
Securities Administrator the facts surrounding such transfer, which investment
letter shall not be an expense of the Trustee, the Securities Administrator or
the Depositor. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Securities
Administrator, the Seller and the Depositor 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. Notwithstanding the foregoing, any transfer made to
Xxxxxxxxx or to another Affiliate of Xxxxxxxxx will not require any investment
letter or Opinion of Counsel specified above.
In the case of a Private Certificate that is a Book-Entry Certificate,
for purposes of the preceding paragraph, the representations set forth in the
investment letter in clause (i) shall be deemed to have been made to the
Securities Administrator by the transferee's acceptance of such Private
Certificate that is also a Book-Entry Certificate (or the acceptance by a
Certificate Owner of the beneficial interest in such Certificate).
Except for any transfer made to Xxxxxxxxx or to another Affiliate of
Xxxxxxxxx, no transfer of an ERISA Restricted Certificate in the form of a
Definitive Certificate shall be made unless the Securities Administrator shall
have received either (i) a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Securities Administrator (such requirement is satisfied only by the Securities
Administrator's receipt of a representation letter from the transferee
substantially in the form of Exhibit I hereto), to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer or (ii) if the purchaser is an insurance
company, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) an Opinion of Counsel satisfactory to the Securities Administrator,
which Opinion of Counsel shall not be an expense of any of the Trustee, the
Securities Administrator or the Trust, addressed to the Securities
Administrator, to the effect that the purchase and holding of such
ERISA-Restricted Certificate that is also a Physical Certificate will not result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and will not subject the Trustee, the Master Servicer, any
Servicer, the Securities Administrator or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate that is also a Physical Certificate to an
employee benefit plan subject to ERISA or Section 4975 of the Code without
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the delivery to the Securities Administrator of an Opinion of Counsel
satisfactory to the Securities Administrator as described above shall be void
and of no effect.
In the case of an ERISA-Restricted Certificate that is a Book-Entry
Certificate, for purposes of clauses (i) or (ii) of the first sentence of the
preceding paragraph, such representations shall be deemed to have been made to
the Securities Administrator by the transferee's acceptance of such
ERISA-Restricted Certificate that is also a Book-Entry Certificate (or the
acceptance by a Certificate Owner of the beneficial interest in such
Certificate).
No transfer of an ERISA-Restricted Auction Certificate prior to the
Auction Call in the form of a Definitive Certificate shall be made unless the
Securities Administrator shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator and the Depositor (such requirement
is satisfied only by the Securities Administrator's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto), to
the effect that such transferee is not acquiring such Certificate for, on behalf
of, or with the assets of, an employee benefit plan or other retirement
arrangement subject to Section 406 of ERISA or Section 4975 of the Code, or (ii)
the acquisition and holding of such Certificate are eligible for exemptive
relief available under the statutory exemption for nonfiduciary service
providers under Section 408(b)(17) of ERISA and Section 4975(d)(2) of the Code
or under Prohibited Transaction Class Exemptions ("PTCE") 84-14, 90-1, 91-38,
95-60 or 96-23 or some other applicable exemption.
In the case of an ERISA-Restricted Auction Certificate that is a
Book-Entry Certificate, for purposes of the first sentence of the preceding
paragraph, such representations shall be deemed to have been made to the
Securities Administrator by the transferee's acceptance of such Certificates
that are also Book-Entry Certificates (or the acceptance by a Certificate Owner
of the beneficial interest in such Certificates).
To the extent permitted under applicable law (including, but not
limited to, ERISA), none of the Trustee, the Securities Administrator nor the
Certificate Registrar shall have any liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate or ERISA-Restricted
Auction Certificate that is in fact not permitted by this Section 6.02(d) or for
making any payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this Agreement
so long as the transfer was registered by the Securities Administrator or the
Certificate Registrar in accordance with the foregoing requirements. In
addition, none of the Trustee, the Securities Administrator nor the Certificate
Registrar shall be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to any such Certificate in the form
of a Book-Entry Certificate, and neither the Securities Administrator nor the
Certificate Registrar shall have any liability for transfers of Book-Entry
Certificates or any interests therein made in violation of the restrictions on
transfer described in the Prospectus Supplement and this Agreement.
Upon notice by the Auction Administrator to the Securities
Administrator that the Holder of any Auction Certificate not held in book-entry
form has failed to surrender such Certificate for registration of transfer on
the Auction Distribution Date, the Securities Administrator shall, upon
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request by the Auction Administrator, deem such Certificate cancelled and issue,
authenticate and deliver, in the name of the transferee designated by the
Auction Administrator, a new Certificate in a denomination of like Class
Certificate Principal Balance.
(e) Each Person who has or who acquires any Ownership Interest in the
Class A-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 to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee who acquires such
Ownership Interest in a Class A-R Certificate for its own account and not
in the capacity as trustee, nominee or agent for another Person and shall
promptly notify the Securities Administrator of any change or impending
change in its status as such a Permitted Transferee.
(ii) No Ownership Interest in the Class A-R Certificate may be
registered on the Closing Date and no Ownership Interest in a Residual
Certificate may thereafter be transferred, and the Securities Administrator
shall not register the Transfer of a Residual Certificate unless, in
addition to the certificates required to be delivered under subsection (d)
above, the Securities Administrator shall have been furnished with an
affidavit ("TRANSFER AFFIDAVIT") of the initial owner of the Class A-R
Certificate or proposed transferee of a Residual Certificate in the form
attached hereto as Exhibit L.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Securities Administrator shall as a
condition to registration of the transfer, require delivery to it of a
Transferor Certificate in the form of Exhibit K hereto from the proposed
transferor to the effect that the transferor (a) has no knowledge the
proposed Transferee is not a Permitted Transferee acquiring an Ownership
Interest in such Class A-R Certificate for its own account and not in a
capacity as trustee, nominee, or agent for another Person, and (b) has not
undertaken the proposed transfer in whole or in part to impede the
assessment or collection of tax.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become a Holder of such Residual
Certificate, then the prior Holder of such Residual Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
Transfer of such Residual Certificate was not in fact permitted by this
Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Residual Certificate. None of the
Trustee, the Securities Administrator or the Certificate Registrar shall
have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section or for
making any distributions due on a Residual Certificate to the Holder
thereof or taking any other action
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with respect to such Holder under the provisions of this Agreement so long
as, with respect to the Securities Administrator, it has received the
documents specified in clause (iii). The Securities Administrator shall be
entitled to recover from any Holder of such Residual Certificate that was
in fact not a Permitted Transferee at the time such distributions were made
all distributions made on such Residual Certificate. Any such distributions
so recovered by the Securities Administrator shall be distributed and
delivered by the Securities Administrator to the last Holder of such
Residual Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Securities Administrator shall have
the right but not the obligation, without notice to the Holder of such
Residual Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Securities Administrator to the previous Holder of such
Residual Certificate that is a Permitted Transferee, except that in the
event that the Securities Administrator determines that the Holder of such
Residual Certificate may be liable for any amount due under this Section or
any other provisions of this Agreement, the Securities Administrator may
withhold a corresponding amount from such remittance as security for such
claim. The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Securities Administrator and it
shall not be liable to any Person having an Ownership Interest in such
Residual Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Securities Administrator upon
receipt of reasonable compensation will provide to the Internal Revenue
Service, and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to disqualified
organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, the Securities Administrator and the Servicer, in form and substance
satisfactory to the Trustee and the Securities Administrator, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its ratings of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause either REMIC created hereunder to fail
to qualify as a REMIC.
(f) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar 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 Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
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SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Securities Administrator, the Depositor and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee, the Securities
Administrator or the Certificate Registrar that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute on
behalf of the Trust, authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee, the Securities Administrator or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee, the Securities
Administrator and the Certificate Registrar) in connection therewith. Any
duplicate Certificate issued pursuant to this Section, shall constitute complete
and indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 6.04. Persons Deemed Owners.
The Depositor, the Trustee, the Securities Administrator, the
Certificate Registrar, any Paying Agent and any agent of the Depositor, the
Certificate Registrar, any Paying Agent, the Securities Administrator or the
Trustee may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 5.01 hereof and for all other
purposes whatsoever, and none of the Trust, the Trustee, the Securities
Administrator, the Certificate Registrar, the Paying Agent or any agent of any
of them shall be affected by notice to the contrary.
SECTION 6.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 5.01 hereof. The duties of the
Paying Agent may include the obligation to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly existing
under the laws of the United States of America or any state thereof, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially be
the Securities Administrator. The Securities Administrator may appoint a
successor to act as Paying Agent, which appointment shall be reasonably
satisfactory to the Depositor.
(b) The Securities Administrator or the Trustee, as applicable, shall
cause the Paying Agent (if other than the Trustee or the Securities
Administrator) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such
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Certificateholders and shall agree that it shall comply with all requirements of
the Code regarding the withholding of payments in respect of federal income
taxes due from Certificate Owners and otherwise comply with the provisions of
this Agreement applicable to it.
SECTION 6.06. Optional Purchase of Certificates.
(a) All but not less than all of the Certificates are subject to
purchase by TMI, at its option, on any Distribution Date on or after the
Optional Securities Purchase Date from the then Certificateholders thereof;
provided, however, that TMI may appoint a designee to purchase the Residual
Certificate. The purchase price for each Certificate (other than a Class A-X
Certificate or a Residual Certificate) shall be equal to the sum of (i) the
Certificate Principal Balance of such Certificate and (ii) any accrued but
unpaid interest thereon at the applicable Pass-Through Rate with respect thereto
for such Distribution Date. The purchase price for the Class A-X Certificates
shall be an amount equal to the sum of (x) any Interest Distributable Amounts
due (after taking into account payments made on such date from Interest
Distributable Amounts) on the Class A-X Certificates, and (y) the present value,
as of the date of such termination, of the remaining payments scheduled to be
made on the Class A-X Certificates (such present value to be based on a discount
rate that will approximate the expected yield to maturity of the Class A-X
Certificates). The purchase price for the Class A-R Certificate shall be $1.00.
In order to exercise the Optional Securities Purchase Right, TMI must, no later
than the eighth Business Day prior to the applicable Distribution Date, deliver
to the Securities Administrator (with copies to the Rating Agencies and the
Master Servicer) written notice, in the form of Exhibit O hereto, of its intent
to purchase the Certificates and of the Distribution Date on which it intends to
do so and the Securities Administrator will verify in writing to TMI the cash
amount required of TMI to effect such purchase no later than the third Business
Day prior to the Distribution Date on which such purchase is scheduled to occur.
The Securities Administrator shall furnish notice of the exercise of the
Optional Securities Purchase Right to the applicable Certificateholders in
compliance with Section 6.06(c). On the Distribution Date on which the Optional
Securities Purchase Right will be exercised, TMI shall deposit the appropriate
amount in cash with the Securities Administrator. Such amount shall be deposited
by the Securities Administrator into a separate sub-account of the Distribution
Account (the "PURCHASE ACCOUNT"). Such amounts shall be paid by the Securities
Administrator to Holders of the applicable Certificates as provided in Section
6.06(d).
(b) In the case of an exercise of the Optional Securities Purchase
Right, TMI shall be solely responsible for the costs and expenses of the
Trustee, the Securities Administrator and the Master Servicer.
(c) Notice of exercise of the Optional Securities Purchase Right under
Section 6.06(a) shall be given by the Securities Administrator by facsimile or
by first-class mail, postage prepaid, transmitted or mailed not less than five
Business Days prior to the applicable Distribution Date, to the Holder of the
Class A-R Certificate as of the close of business on the Record Date preceding
such Distribution Date and to each Holder of a Certificate (other than a
Residual Certificate) as of a date not more than one Business Day preceding the
mailing of such notice, at such Holder's address appearing in the Certificate
Register.
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All such notices shall state:
(i) the Distribution Date upon which the Certificateholders will
receive payment in full on the applicable Certificates;
(ii) the amount the applicable Certificateholders will be paid,
separately stating amounts in respect of principal and interest;
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable and that payments shall be made only
upon presentation and surrender of the respective Certificates and the
place where such Certificates are to be surrendered for payment; and
(iv) that interest on the respective Certificates shall cease to
accrue for the benefit of the then Certificateholders on such Distribution
Date and no interest shall accrue on the price paid for such Certificates.
The foregoing notice shall be given by the Securities Administrator in
the name and at the expense of TMI. Failure to give notice of such purchase, or
any defect therein, to any Holder of any Certificate shall not impair or affect
the validity of the purchase of any other Certificate.
(d) The Certificates shall, following notice as required by Section
6.06(c), be purchased on the applicable Distribution Date by TMI at the price
specified in Section 6.06(a) from funds in the Purchase Account, and (unless TMI
shall default in the payment of such amount) no interest shall accrue on such
amount for any period after the date to which accrued interest is calculated for
purposes of calculating such amount.
(e) Subsequent to the purchase of the Certificates following exercise
of the Optional Securities Purchase Right, TMI shall be deemed the sole Holder
of the Offered Certificates (other than the Residual Certificates) and it shall
either be the sole Holder of the Class A-R Certificate or may designate a Person
which meets the requirements of this Agreement to become the Holder thereof. TMI
may subsequently transfer some or all of the Certificates acquired by it in
accordance with the provisions hereof. All Certificates issued to the
Certificateholders prior to exercise of the Optional Securities Purchase Right
shall be deemed cancelled (other than those Certificates held by TMI).
ARTICLE VII
DEFAULT
SECTION 7.01. Event of Default.
(a) If any one of the following events (each, an "EVENT OF DEFAULT")
shall occur and be continuing:
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(i) the failure by the Master Servicer to (A) make any Advance on
the Business Day immediately preceding the related Distribution Date or (B)
to deposit in the Distribution Account any deposit required to be made
under the terms of this Agreement, and in either case such failure
continues unremedied for a period of three Business Days after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer (or, if applicable,
such shorter time period as is provided in the penultimate sentence of
Section 7.01(c)); or
(ii) the failure by the Master Servicer duly to observe or
perform, in any material respect, any other covenants, obligations or
agreements of the Master Servicer as set forth in this Agreement, which
failure continues unremedied for a period of 60 days, in each case after
the date (A) 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
to the Master Servicer and the Trustee by Holders of Certificates
evidencing at least 25% of the Voting Rights or (B) on which a Servicing
Officer of the Master Servicer has actual knowledge of such failure (or, in
the case of a breach of its obligation beyond any applicable cure period to
provide an assessment of compliance, an attestation report or a
Xxxxxxxx-Xxxxx Certification pursuant to Sections 3.16 and 3.18,
respectively); or
(iii) the entry against the Master Servicer of a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 days; or
(iv) the Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained in
force undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
(b) then, and in each and every such case, so long as an Event of
Default shall not have been remedied within the applicable grace period, the
Trustee shall, at the written direction of the Holders of Certificates
evidencing Voting Rights aggregating not less than 51%, or at its option may,
with the consent of Xxxxxxxxx (not to be unreasonably withheld), by notice then
given in writing to the Master Servicer, terminate all of the rights and
obligations of the Master Servicer as servicer under this Agreement. Any such
notice to the Master Servicer shall also be given to
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each Rating Agency, the Depositor and the Seller. On or after the receipt by the
Master Servicer (and by the Trustee if such notice is given by the Holders) of
such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee and the Trustee 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 of each Mortgage Loan and related
documents or otherwise. The Master Servicer agrees to cooperate with the Trustee
in effecting the termination of the responsibilities and rights of the Master
Servicer hereunder, including, without limitation, the delivery to the Trustee
of all documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice and the transfer within one Business Day subsequent to such notice
to the Trustee for the administration by it of all cash amounts that shall at
the time be held by the Master Servicer and to be deposited by it in the
Distribution Account, any REO Account or any Servicing Account or that have been
deposited by the Master Servicer in such accounts or thereafter received by the
Master Servicer with respect to the Mortgage Loans or any REO Property received
by the Master Servicer. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Master Servicer's duties and
the Mortgage Files to the successor Master Servicer and amending this Agreement
to reflect such succession as Master Servicer pursuant to this Section shall be
paid by the predecessor Master Servicer (or if the predecessor Master Servicer
is the Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses. The termination of the rights and
obligations of the Master Servicer shall not affect any liability it may have
incurred prior to such termination. To the extent that such costs and expenses
of the Trustee are not fully and timely reimbursed by the predecessor Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.
(c) The Securities Administrator shall not later than the close of
business on the Business Day immediately preceding the related Distribution Date
notify the Trustee in writing of the Master Servicer's failure to make any
Advance required to be made under this Agreement on such date and the amount of
such Advance. By no later than 10:00 A.M. (Chicago time) on the relevant
Distribution Date, the Securities Administrator shall notify the Trustee of the
continuance of such failure or that the Master Servicer has made the Advance, as
the case may be. Notwithstanding the terms of the Event of Default described in
clause (i)(A) of Section 7.01(a), the Trustee, upon receipt of written notice on
the Distribution Date from the Securities Administrator of the continuance of
the failure of the Master Servicer to make an Advance, shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
suspend all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of outstanding Advances or other amounts
for which the Master Servicer was entitled to reimbursement as of the date of
suspension, and the Trustee, subject to the cure provided for in this paragraph,
if available, shall act as provided in Section 7.02 to carry out the duties of
the Master Servicer, including the obligation to make any Advance the nonpayment
of which is described in clause (i)(A) of Section 7.01(a). Any such action taken
by the Trustee must be prior to the distribution on the relevant Distribution
Date, and shall have all of the rights
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incidental thereto. If the Master Servicer shall within two Business Days
following such suspension remit to the Trustee the amount of any Advance the
nonpayment of which by the Master Servicer is described in clause (i)(A) of
Section 7.01(a), together with all other amounts necessary to reimburse the
Trustee for actual, necessary and reasonable costs incurred by the Trustee
because of action taken pursuant to this subsection (including interest on any
Advance or other amounts paid by the Trustee (from and including the respective
dates thereof) at a per annum rate equal to the prime rate for U.S. money center
commercial banks as published in the Wall Street Journal), then the Trustee,
subject to the last two sentences of this paragraph, shall permit the Master
Servicer to resume its rights and obligations as Master Servicer hereunder. If
the Master Servicer shall fail to remit such amounts to the Trustee within such
two Business Days after the Distribution Date, then an Event of Default shall
occur and such notice of suspension shall be deemed to be a notice of
termination without any further action on the part of the Trustee. The Master
Servicer agrees that if it fails to make a required Advance by 10:00 A.M.
(Chicago time) on the related Distribution Date on more than two occasions in
any 12 month period, the Trustee shall be under no obligation to permit the
Master Servicer to resume its rights and obligations as Master Servicer
hereunder, and notwithstanding the cure period provided in Section
7.01(a)(i)(A), an Event of Default shall be deemed to have occurred on the
relevant Distribution Date.
SECTION 7.02. Trustee to Act.
(a) From and after the date the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof arising on and after its succession.
As compensation therefor, the Trustee shall be entitled to such compensation as
the Master Servicer would have been entitled to hereunder if no such notice of
termination had been given. Notwithstanding the above, (i) if the Trustee is
unwilling to act as successor Master Servicer or (ii) if the Trustee is legally
unable so to act, subject to the rights of Xxxxxxxxx under Section 3.33 hereof,
the Trustee shall appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution, bank or other
mortgage loan or home equity loan servicer having a net worth of not less than
$15,000,000 as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided, that the appointment of any such successor Master
Servicer shall not result in the qualification, reduction or withdrawal of the
ratings assigned to the Certificates by each Rating Agency as evidenced by a
letter to such effect from each Rating Agency. Pending appointment of a
successor to the Master Servicer hereunder, unless the Trustee is prohibited by
law from so acting, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the successor
shall be entitled to receive compensation out of payments on Mortgage Loans in
an amount equal to the compensation which the Master Servicer would otherwise
have received pursuant to Section 3.18. The appointment of a successor Master
Servicer shall not affect any liability of the predecessor Master Servicer which
may have arisen under this Agreement prior to its termination as Master Servicer
to pay any deductible under an insurance policy pursuant to Section 3.14 or to
indemnify the Trustee pursuant to Section 8.05,
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nor shall any successor Master Servicer be liable for any acts or omissions of
the predecessor Master Servicer or for any breach by such Master Servicer of any
of its representations or warranties contained herein or in any related document
or agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
Master Servicer shall during the term of its service as Master Servicer continue
to service and administer the Mortgage Loans for the benefit of
Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and a Fidelity Bond in respect of its officers, employees and
agents to the same extent as the Master Servicer is so required pursuant to
Section 3.04.
(c) Notwithstanding anything else herein to the contrary, in no event
shall the Trustee be liable for any servicing fee or for any differential in the
amount of the servicing fee paid hereunder and the amount necessary to induce
any successor Master Servicer to act as successor Master Servicer under this
Agreement and the transactions set forth or provided for herein.
SECTION 7.03. Waiver of Event of Default.
The Majority Certificateholders may, on behalf of all
Certificateholders, by notice in writing to the Trustee, direct the Trustee to
waive any events permitting removal of any Master Servicer under this Agreement,
provided, however, that the Majority Certificateholders may not waive an event
that results in a failure to make any required distribution on a Certificate
without the consent of the Holder of such Certificate. Upon any waiver of an
Event of Default, such event shall cease to exist and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other event or
impair any right consequent thereto except to the extent expressly so waived.
Notice of any such waiver shall be given by the Trustee to each Rating Agency.
SECTION 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to any Master
Servicer pursuant to this Article VII or Section 3.34, the Certificate Registrar
or the Trustee, if the Master Servicer is also the Certificate Registrar and
Securities Administrator, shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute
an Event of Default of which a Responsible Officer of the Trustee becomes aware
of the occurrence of such an event, the Trustee shall transmit by mail to all
Certificateholders notice of such occurrence unless such Event of Default shall
have been waived or cured.
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ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 8.01. Duties of Trustee and Securities Administrator.
The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. If an Event of Default
has occurred (which has not been cured or waived) of which a Responsible Officer
has actual knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs, unless the Trustee is acting as successor
Master Servicer, in which case it shall use the same degree of care and skill as
the Master Servicer hereunder with respect to the exercise of the rights and
powers of the Master Servicer hereunder.
The Trustee and the Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee and the Securities Administrator,
which are specifically required to be furnished pursuant to any provision of
this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement; provided, however, that neither the Trustee nor
the Securities Administrator will be responsible for the accuracy or content of
any such resolutions, certificates, statements, opinions, reports, documents or
other instruments. If any such instrument is found not to conform to the
requirements of this Agreement in a material manner the Trustee and the
Securities Administrator shall take such action as it deems appropriate to have
the instrument corrected.
On each Distribution Date, the Securities Administrator shall make
monthly distributions to the Yield Maintenance Account and to the
Certificateholders from funds in the Distribution Account, in each case as
provided in Sections 5.01, 5.09 and 10.01 hereof based on the report of the
Securities Administrator.
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 willful misconduct;
provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of such of its 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, in the absence of bad faith on the part of the Trustee or the
Securities Administrator, respectively, the Trustee or the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of
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the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee or the Securities Administrator, respectively, and
conforming to the requirements of this Agreement;
(ii) neither the Trustee nor the Securities Administrator shall
be liable for an error of judgment made in good faith by a Responsible
Officer of the Trustee or an officer of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining or investigating
the facts related thereto;
(iii) neither the Trustee nor the Securities Administrator shall
be personally liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the consent or at the
direction of Holders of Certificates as provided herein relating to the
time, method and place of conducting any remedy pursuant to this Agreement,
or exercising or omitting to exercise any trust or power conferred upon the
Trustee or the Securities Administrator, respectively, under this
Agreement; and
(iv) the Trustee shall not be charged with knowledge of any Event
of Default or any other event or matter that may require it to take action
or omit to take action hereunder unless a Responsible Officer of the
Trustee at the Corporate Trust Office obtains actual knowledge of such
failure or the Trustee receives written notice of such Event of Default.
Neither the Trustee nor the Securities Administrator shall be required
to expend or risk its own funds or otherwise incur financial or other liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 8.01 hereof:
(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, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties, and the manner of
obtaining consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee and the Securities Administrator may prescribe;
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(ii) the Trustee and the Securities Administrator may consult
with counsel and any advice of its counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator shall
be under any obligation to exercise any of the rights or powers vested in
it by this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of any
of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or the
Securities Administrator, respectively, reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee 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 any such act;
(iv) neither the Trustee nor the Securities Administrator shall
be personally 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;
(v) prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or documents, unless requested in writing to do so by the Majority
Certificateholder; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition
to such proceeding. If the Master Servicer fails to reimburse the Trustee
in respect of the reasonable expense of every such examination relating to
the Master Servicer, the Trustee shall be reimbursed by the Trust Fund;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions hereunder
of the Delaware Trustee, the Securities Administrator or the Master
Servicer until such time as the Trustee may be required to act as the
Master Servicer pursuant to Section 7.02 hereof and thereupon only for the
acts or omissions of the Trustee as a successor Master Servicer;
(vii) 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, nominees, attorneys or a
custodian, and shall not be responsible for any willful misconduct or
negligence on the part of any agent, nominee, attorney or custodian
appointed by the Trustee or the Securities Administrator in good faith; and
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(viii) 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 neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or willful
misconduct in the performance of such act.
SECTION 8.03. Trustee and the Securities Administrator Not Liable
for Certificates, Mortgage Loans or Additional
Collateral.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee or Securities Administrator on the Certificates)
shall be taken as the statements of the Depositor or the Seller, and the neither
Trustee nor the Securities Administrator assumes responsibility for the
correctness of the same. Neither the Trustee nor the Securities Administrator
makes representations or warranties as to the validity or sufficiency of this
Agreement or of the Certificates (other than the signature and authentication of
the Securities Administrator on the Certificates) or of any Mortgage Loan or
related document or of MERS or the MERS System. The Trustee shall not be
accountable for the use or application by the Master Servicer, or for the use or
application of any funds paid to the Master Servicer in respect of related
Mortgage Loans or deposited in or withdrawn from the Distribution Account by the
Master Servicer or the Securities Administrator. Neither the Trustee nor the
Securities Administrator shall at any time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any Mortgage
or any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02 hereof); the validity of the assignment of any Mortgage Loan to the Trustee
or of any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02 hereof); the
compliance by the Depositor or the Seller with any warranty or representation
made under this Agreement or in any related document or the accuracy of any such
warranty or representation prior to the Trustee's receipt of notice or other
discovery of any non-compliance therewith or any breach thereof; any investment
of monies by or at the direction of the Master Servicer or in the case of the
Trustee the Securities Administrator or any loss resulting therefrom, it being
understood that the Trustee shall remain responsible for any Trust property that
it may hold in its individual capacity and the Securities Administrator shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of the Master Servicer (other than as to the
Securities Administrator, if it is also the Master Servicer, and as to the
Trustee, if the Trustee shall assume the duties of the Master Servicer pursuant
to Section 7.02 hereof, and then only for the acts or omissions of the Trustee
as the successor Master Servicer), or any acts or omissions of any Servicer or
any Mortgagor; any action of the Master Servicer (other than as to the
Securities Administrator, if it is also the Master Servicer, and as to the
Trustee, if the Trustee shall assume the duties of the Master Servicer pursuant
to Section 7.02 hereof), or in the case of the Trustee the Securities
Administrator or any Servicer taken in the name of the Trustee; the failure of
the Master Servicer or any Servicer to act or perform any duties required of it
as agent or on behalf
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of the Trustee or the Trust hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02 hereof, and then only for
the actions of the Trustee as the successor Master Servicer); provided, however,
that the foregoing shall not relieve the Trustee of its obligation to perform
its duties under this Agreement, including, without limitation, the Trustee's
duty to review the Mortgage Files, if so required pursuant to Section 2.01 of
this Agreement.
SECTION 8.04. Trustee, Custodian, Delaware Trustee, Master
Servicer and Securities Administrator May Own
Certificates.
The Trustee, the Custodian, the Delaware Trustee, the Master Servicer
and the Securities Administrator in their respective individual capacities, or
in any capacity other than as Trustee, Custodian, Delaware Trustee, Master
Servicer or Securities Administrator hereunder, may become the owner or pledgee
of any Certificates with the same rights they would have if they were not
Trustee, Custodian, Delaware Trustee, Master Servicer or Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.
SECTION 8.05. Trustee's, Delaware Trustee's and Securities
Administrator's Fees and Expenses.
The Trustee shall be compensated by the Master Servicer for its
services hereunder on behalf of the Trust in accordance with the fee letter
between the Master Servicer and the Trustee. The Delaware Trustee shall be
compensated by the Seller for its services hereunder. The Securities
Administrator shall be compensated by the Master Servicer for its services
hereunder from a portion of the Master Servicing Fee. In addition, the Trustee
(as Trustee and in its individual corporate capacity), the Delaware Trustee and
the Securities Administrator will be entitled to recover from the Distribution
Account pursuant to Section 4.05(a) all reasonable out-of-pocket expenses,
disbursements and advances and the expenses of the Trustee (including for such
purpose, any fees and expenses relating to its capacity as Custodian hereunder
to the extent not paid by Xxxxxxxxx), the Delaware Trustee, and the Securities
Administrator, respectively, including without limitation, in connection with
any Event of Default, any breach of this Agreement or any claim or legal action
(including any pending or threatened claim or legal action) incurred or made by
the Delaware Trustee, the Trustee or the Securities Administrator, respectively,
in the performance of its duties or the administration of the trusts hereunder
or under the Yield Maintenance Agreement or the Auction Swap Agreement
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence (or in the case of the Delaware Trustee, gross negligence) or
intentional misconduct or which is specifically designated herein as the
responsibility of the Depositor, the Seller, the Master Servicer, the
Certificateholders, the Delaware Trustee or the Trust hereunder or thereunder.
If funds in the Distribution Account are insufficient therefor, the Trustee, the
Delaware Trustee, the Custodian and the Securities Administrator shall recover
such expenses from future collections on the Mortgage Loans or as otherwise
agreed by such parties and the Certificateholders. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.
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SECTION 8.06. Eligibility Requirements for Trustee and Securities
Administrator.
The Trustee and Securities Administrator hereunder shall at all times
be an entity duly organized and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers, each having a combined capital and surplus of at least
$50,000,000 and (except with respect to the initial Trustee) a minimum long-term
debt rating in the third highest rating category by each Rating Agency and in
each Rating Agency's two highest short-term rating categories, and subject to
supervision or examination by federal or state authority. If such entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to such Trustee at the time such Trustee
is appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee or the Securities Administrator, as applicable
shall resign immediately in the manner and with the effect specified in Section
8.07 hereof.
SECTION 8.07. Resignation or Removal of Trustee and Securities
Administrator.
The Trustee and Securities Administrator may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Seller, the Master Servicer and each Rating Agency. Upon
receiving such notice of resignation of the Trustee, the Seller shall promptly
appoint a successor Trustee that meets the requirements in Section 8.06 or, in
the case of notice of resignation of the Securities Administrator, the Trustee
shall promptly appoint a successor Securities Administrator that meets the
requirements in Section 8.06, in each case, by written instrument, in duplicate,
one copy of which instrument shall be delivered to each of the resigning Trustee
or Securities Administrator, as applicable, and one copy to the successor
Trustee or successor Securities Administrator, as applicable. If no successor
Trustee or successor Securities Administrator, as applicable, shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee or Securities Administrator
may petition any court of competent jurisdiction for the appointment of a
successor Trustee or Securities Administrator, as applicable.
If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 8.06 hereof or if at
any time the Trustee or the Securities Administrator shall be legally unable to
act, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator, as applicable, or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
the Securities Administrator, as applicable, or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, or if the Trustee
(in its capacity as Custodian) or the Securities Administrator fails to provide
an assessment of compliance or an attestation report required under Section 3.16
within 15 calendar days of March 1 of each calendar year in which Exchange Act
reports are required then the Seller may remove the Trustee or the Trustee may
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remove the Securities Administrator, as applicable. If the Seller or the Trustee
removes the Trustee or the Securities Administrator, respectively under the
authority of the immediately preceding sentence, the Seller or the Trustee shall
promptly appoint a successor Trustee or successor Securities Administrator that
meets the requirements of Section 8.06, as applicable, by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee or
the Securities Administrator, as applicable, so removed, one copy to the
successor Trustee or successor Securities Administrator, as applicable, and one
copy to the Master Servicer.
The Majority Certificateholders may at any time remove the Trustee or
the Securities Administrator by written instrument or instruments delivered to
the Seller and the Trustee; the Seller shall thereupon use its best efforts to
appoint a successor Trustee or successor Securities Administrator, as
applicable, in accordance with this Section.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or a successor Securities
Administrator, pursuant to any of the provisions of this Section 8.07 shall not
become effective until acceptance of appointment by the successor Trustee or a
successor Securities Administrator, as applicable, as provided in Section 8.08
hereof. If the Trustee or the Securities Administrator is removed pursuant to
this Section 8.07, it shall be reimbursed any outstanding and unpaid fees and
expenses, and if removed under the authority of the immediately preceding
paragraph, the Trustee or the Securities Administrator shall also be reimbursed
any outstanding and unpaid costs and expenses.
Notwithstanding anything to the contrary contained herein, in the
event that the Master Servicer resigns or is removed as Master Servicer
hereunder, the Securities Administrator shall have the right to resign
immediately as Securities Administrator by giving written notice to the Seller
and the Trustee, with a copy to each Rating Agency; provided that such
resignation shall not become effective until acceptance of appointment by a
successor Securities Administrator. Notwithstanding anything to the contrary
herein, in the event that the Securities Administrator resigns or is removed as
Securities Administrator hereunder, the Master Servicer shall have the right to
resign immediately as Master Servicer by giving written notice to the Seller and
the Trustee, with a copy to each Rating Agency; provided that such resignation
shall not become effective until acceptance of appointment by a successor Master
Servicer.
SECTION 8.08. Successor Trustee and Successor Securities
Administrator.
Any successor Trustee or successor Securities Administrator appointed
as provided in Section 8.07 hereof shall execute, acknowledge and deliver to the
Depositor, the Seller and the Master Servicer and to its predecessor Trustee or
Securities Administrator an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee or Securities
Administrator shall become effective, and such successor Trustee or successor
Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder (including, without limitation, with respect to such a
successor Securities Administrator, its rights, powers, duties and obligations
as Auction Administrator under the Auction Administration Agreement), with like
effect as if originally named as Trustee or
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Securities Administrator. The Depositor, the Seller, the Master Servicer and the
predecessor Trustee or Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee or Securities
Administrator, as applicable, all such rights, powers, duties and obligations.
No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 8.06 hereof and the appointment of such
successor Trustee or Securities Administrator shall not result in a downgrading
of the Senior Certificates by either Rating Agency, as evidenced by a letter
from each Rating Agency.
Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 8.08, the successor Trustee or
Securities Administrator shall mail notice of the appointment of a successor
Trustee or Securities Administrator hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09. Merger or Consolidation of Trustee or Securities
Administrator.
Any entity into which the Trustee or the Securities Administrator may
be merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which the Trustee or
the Securities Administrator shall be a party, or any entity succeeding to the
corporate trust business of the Trustee or the Securities Administrator, shall
be the successor of the Trustee or the Securities Administrator, as applicable,
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08 hereof, 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.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, and in
addition to the appointment of the Delaware Trustee pursuant to Section 1A.03
hereof, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust or any Mortgaged Property may at the
time be located, the Depositor and the Trustee acting jointly shall have the
power, and the Trustee shall, and shall instruct the Depositor to, execute and
deliver all instruments to appoint one or more Persons, approved by the Trustee
to act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 hereof,
and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.08 hereof.
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Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master 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 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 Depositor and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
SECTION 8.11. Limitation of Liability.
The Certificates are executed by the Securities Administrator, not in
its individual capacity but solely as Securities Administrator on behalf of the
Trust, in the exercise of the powers and authority conferred and vested in it by
this Agreement. Each of the undertakings and agreements made on the part of the
Securities Administrator in the Certificates is made and intended not as a
personal undertaking or agreement by the Trustee but is made and intended for
the purpose of binding only the Trust.
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SECTION 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee (for the
avoidance of doubt, in its individual capacity and as Trustee on behalf of the
Trust), its agents and counsel, be for the ratable benefit or the
Certificateholders in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor and each
Certificateholder upon reasonable notice during normal business hours at its
Corporate Trust Office or other office designated by the Trustee, access to all
records maintained by the Trustee in respect of its duties hereunder and access
to officers of the Trustee responsible for performing such duties. Upon request,
the Trustee shall furnish the Depositor and any requesting Certificateholder
with its most recent audited financial statements. The Trustee shall cooperate
fully with the Seller, the Depositor and such Certificateholder and shall,
subject to the first sentence of this Section 8.12(b), make available to the
Seller, the Depositor and such Certificateholder for review and copying such
books, documents or records as may be requested with respect to the Trustee's
duties hereunder. The Seller, the Depositor and the Certificateholders shall not
have any responsibility or liability for any action or failure to act by the
Trustee and are not obligated to supervise the performance of the Trustee under
this Agreement or otherwise.
(c) The Securities Administrator shall afford the Seller, the
Depositor, the Trustee and each Certificateholder upon reasonable notice during
normal business hours at its offices at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000 or other office designated by the Securities Administrator,
access to all records maintained by the Securities Administrator in respect of
its duties hereunder and access to officers of the Securities Administrator
responsible for performing such duties. Upon request, the Securities
Administrator shall furnish the Depositor and any requesting Certificateholder
with its most recent audited financial statements. The Securities Administrator
shall cooperate fully with the Seller, the Depositor, the Trustee and such
Certificateholder and shall, subject to the first sentence of this Section
8.12(c), make available to the Seller, the Depositor and such Certificateholder
for review and copying such books, documents or records as may be requested with
respect to the Securities Administrator's duties hereunder. The Seller, the
Depositor, the Trustee and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Securities
Administrator and are not obligated to supervise the performance of the
Securities Administrator under this Agreement or otherwise.
SECTION 8.13. Suits for Enforcement.
In case an Event of Default or a default by the Depositor hereunder
shall occur and be continuing, the Trustee may proceed to protect and enforce
its rights and the rights of the Certificateholders under this Agreement, as the
case may be, by a suit, action or proceeding in
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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 and the Certificateholders.
SECTION 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
SECTION 8.16. Appointment of Custodians.
The Trustee may appoint one or more custodians to hold all or a
portion of the related Mortgage Files as agent for the Trustee, by entering into
a custodial agreement. The custodian may at any time be terminated and a
substitute custodian appointed therefor by the Trustee. Subject to this Article
VIII, the Trustee agrees to comply with the terms of each custodial agreement
and to enforce the terms and provisions thereof against the custodian for the
benefit of the Certificateholders having an interest in any Mortgage File held
by such custodian. Each custodian shall be a depository institution or trust
company subject to supervision by federal or state authority, shall have
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. The Seller
shall pay from its own funds, without any right to reimbursement, the fees,
costs and expenses of each custodian (including the costs of custodian's
counsel).
SECTION 8.17. Auction Administration Agreement; Auction Swap
Agreement.
(a) Concurrently with the execution and delivery hereof, at the
direction of the Depositor, the Securities Administrator, acting solely as an
agent (the "AUCTION ADMINISTRATOR") for the Holders of the Auction Certificates
and not on behalf of the Trust, shall execute and deliver the Auction
Administration Agreement and the Auction Swap Agreement in the forms presented
by the Auction Swap Counterparty provided that the provisions of Section 1A.05
remain applicable to each Certificateholder. The Securities Administrator shall
have no duty to review or otherwise determine the adequacy of the Auction
Administration Agreement or the Auction Swap Agreement.
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(b) Each Holder of an Auction Certificate is deemed, by acceptance of
such Certificate, (i) to authorize the Securities Administrator to execute and
deliver the Auction Administration Agreement and the Auction Swap Agreement as
their agent and (ii) to acknowledge and accept and agree to be bound by the
provisions of the Auction Administration Agreement and the Auction Swap
Agreement. The Securities Administrator, as Auction Administrator, agrees not to
consent to any amendments to the Auction Administration Agreement or Auction
Swap Agreement without the consent of 100% of the Auction Certificates.
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration.
(a) As set forth in the Preliminary Statement to this Agreement, two
REMIC elections shall be made by the Trust. The Trustee shall sign and the
Securities Administrator shall file such elections on Form 1066 or other
appropriate federal tax or information return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued. The regular
interests in each REMIC created hereunder and the related residual interest
shall be as designated in the Preliminary Statement. Following the Closing Date,
the Securities Administrator shall apply to the Internal Revenue Service for an
employer identification number for each REMIC created hereunder by means of a
Form SS-4 or other acceptable method and shall file a Form 8811 with the
Internal Revenue Service.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC created hereunder within the meaning of section 860G(a)(9) of the Code.
(c) Except as provided in subsection (d) of this Section 9.01, the
Securities Administrator shall pay any and all tax related expenses (not
including taxes) of each REMIC created hereunder, including but not limited to
any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to any such REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Securities Administrator in fulfilling
its duties hereunder (including the Securities Administrator's duties as tax
return preparer).
(d) The Securities Administrator shall prepare and file, and the
Trustee shall sign all of the federal and state tax and information returns of
each REMIC created hereunder (collectively, the "TAX RETURNS") as the direct
representative. The expenses of preparing and filing such Tax Returns shall be
borne by the Securities Administrator. Notwithstanding the foregoing, the
Securities Administrator shall have no obligation to prepare, file or otherwise
deal with partnership tax information or returns. In the event that partnership
tax information or returns are required by the Internal Revenue Service, the
Seller, at its own cost and expense, will prepare and file all necessary
returns. The Internal Revenue Service has issued OID regulations under Sections
1271 to 1275 of the Code generally addressing the treatment of debt instruments
issued
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with original issue discount. Under those regulations, debt issued to one Person
generally is aggregated in determining if there is OID. Because certain Classes
of Regular Certificates are expected to be issued to one Person (which intends
to continue to hold the Regular Certificates indefinitely and, in any case, for
at least 30 days), the Securities Administrator, on behalf of the Trust, intends
to determine the existence and amount of any OID as if those Classes of Regular
Certificates were one debt instrument.
(e) The Securities Administrator shall perform on behalf of each REMIC
created hereunder all reporting and other tax compliance duties that are the
responsibility of each such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions or other such guidance, the Securities Administrator, shall provide
(i) to the Treasury or other governmental authority such information as is
necessary for the application of any tax relating to the transfer of the Class
A-R Certificate to any disqualified organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) Each of the Trustee, the Securities Administrator and the Holders
of Certificates (to the extent that the affairs of the REMICs are within such
Person's control and the scope of its specific responsibilities under the
Agreement) shall take any action or cause any REMIC created hereunder to take
any action necessary to create or maintain the status of the REMIC created
hereunder as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status. None of the Trustee, the Securities
Administrator or the Holder of a Residual Certificate shall take any action,
cause any REMIC created hereunder to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could result in an Adverse REMIC Event unless the
Trustee and the Securities Administrator have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not result in an Adverse REMIC Event. In addition,
prior to taking any action with respect to any REMIC created hereunder or the
assets therein, or causing any such REMIC to take any action which is not
expressly permitted under the terms of this Agreement, any Holder of the Class
A-R Certificate will consult with the Securities Administrator or its designees,
in writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to any such REMIC, and no such Person shall take any
such action or cause any REMIC created hereunder to take any such action as to
which the Securities Administrator has advised it in writing that an Adverse
REMIC Event could occur.
(g) Each Holder of the Class A-R Certificate shall pay when due any
and all taxes imposed on any REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by
the Class A-R Certificateholder, the Securities Administrator shall pay any
remaining REMIC taxes out of current or future amounts otherwise distributable
to the Holder of the Class A-R Certificate or, if no such amounts are available,
out of other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case may
be.
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(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Securities Administrator shall enter
into any arrangement by which any REMIC created hereunder will receive a fee or
other compensation for services.
(k) [Reserved]
(l) The Yield Maintenance Agreement and the Yield Maintenance Account
shall not be treated as an asset of any REMIC created hereunder. Instead, each
owner of a Class A-1 and Class A-2 Certificate shall be treated as owning an
interest in the Yield Maintenance Agreement. For federal income tax reporting
purposes, as of the Closing Date, the value of the interest in the Yield
Maintenance Agreement owned by each Class of certificates is as follows: Class
A-1 Certificates and Class A-2 Certificates collectively, 100% (allocated among
such Certificates in proportion to their Certificate Principal Balances), and
Class A-X Certificates, 0% (total value $15,705,000).
(m) For federal income tax purposes, each Certificate Owner of Auction
Certificate shall be treated as a party to the Auction Swap Agreement which
shall represent contractual rights and obligations that are separate from the
regular interest related to such Auction Certificate. For purposes of
determining the issue prices of the Auction Certificates, it shall be assumed
that such separate rights and obligations have a zero value unless and until
required otherwise by the applicable taxing authority.
SECTION 9.02. Prohibited Transactions and Activities.
Neither the Depositor nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of the REMICs created hereunder pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II hereof or (v) a
repurchase of Mortgage Loans as contemplated hereunder, nor acquire any assets
for any REMIC created hereunder, nor sell or dispose of any investments in the
Distribution Account for gain, nor accept any contributions to any REMIC created
hereunder after the Closing Date, unless it has received an Opinion of Counsel
(at the expense of the party causing such sale, disposition, or substitution)
that such disposition, acquisition, substitution, or acceptance will not result
in an Adverse REMIC Event.
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ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the Seller, the
Depositor, the Master Servicer, the Securities Administrator, the Delaware
Trustee and the Trustee created hereby (other than the obligation of the
Securities Administrator to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee and the Securities Administrator upon the earliest of (i) the
Distribution Date on which the Class Certificate Principal Balance of each Class
of Certificates has been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan, (iii) the optional purchase of the
Mortgage Loans as described in the following paragraph and (iv) the Latest
Possible Maturity Date.
Xxxxxxxxx (solely in its capacity as a Servicer of the Mortgage Loans)
may, at its option, terminate this Agreement on any Distribution Date on which
the aggregate of the Stated Principal Balances of the Mortgage Loans as of the
end of the immediately preceding Due Period is equal to or less than 10% of the
Cut-Off Date Aggregate Principal Balance, by purchasing, on such Distribution
Date, all of the outstanding Mortgage Loans and REO Properties at a price equal
to the sum of (i) the outstanding Stated Principal Balances of the Mortgage
Loans (other than in respect of REO Properties), (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers approved by the Depositor and
at the expense of Xxxxxxxxx less the good faith estimate of the Master Servicer
or the related Servicer, as applicable, of Liquidation Expenses to be incurred
in connection with its disposal and (y) the Principal Balance of each Mortgage
Loan related to any REO Property and (iii) in all cases, accrued and unpaid
interest thereon at the applicable Loan Rate through the end of the Due Period
preceding the final Distribution Date, plus unreimbursed Servicing Advances and
Advances and any unpaid Master Servicing Fees and Servicing Fees allocable to
such Mortgage Loans and REO Properties, plus all amounts, if any, then due and
owing to the Trustee, the Master Servicer and the Securities Administrator (the
"TERMINATION PRICE").
In addition, Xxxxx Fargo Bank, N.A. (solely in its capacity as the
Master Servicer) may, at its option, terminate this Agreement on any
Distribution Date on which the aggregate of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period is equal to
or less than 5% of the Cut-Off Date Aggregate Principal Balance, by purchasing,
on such Distribution Date, all of the outstanding Mortgage Loans and REO
Properties at a price equal to the Termination Price; provided, that the right
of Xxxxx Fargo Bank, N.A. to purchase all the Mortgage Loans shall be
exercisable only if Xxxxxxxxx has not elected to exercise its optional
termination right on or before such date.
In addition the Depositor may, at its option, terminate this Agreement
on any Distribution Date if the Trustee or the Securities Administrator, based
upon an Opinion of Counsel addressed
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to the Trustee and the Securities Administrator (to be obtained at the expense
of the Depositor), has determined that the REMIC status of any REMIC hereunder
has been lost or that a substantial risk exists that such REMIC status will be
lost for the then-current taxable year. At any time thereafter the Securities
Administrator may elect to terminate any or all of each REMIC at any time, and
upon such election the Depositor shall purchase all the outstanding Mortgage
Loans and REO Properties at a price equal to the Termination Price.
(b) Notice of any termination pursuant to the second, third or fourth
paragraphs of Section 10.01(a), specifying the Distribution Date (which shall be
a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Securities
Administrator for payment of the final distribution and cancellation, shall be
given promptly by the Securities Administrator upon the Securities Administrator
receiving notice of such date from the Master Servicer by letter to the
Certificateholders mailed not earlier than the 10th day and not later than the
19th day of the month of such final distribution specifying (1) the Distribution
Date upon which final distributions on the Certificates will be made upon
presentation and surrender of such Certificates at the office or agency of the
Securities Administrator therein designated, (2) the amount of any such final
distribution and (3) 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 or agency of the
Securities Administrator therein specified.
(c) Upon presentation and surrender of the Certificates, the
Securities Administrator shall cause to be distributed to the Holders of the
Certificates on the Distribution Date for such final distribution, in proportion
to the Percentage Interests of their respective Class and to the extent that
funds are available for such purpose, an amount equal to the amount required to
be distributed to such Holders in accordance with the provisions of Section 4.01
hereof for such Distribution Date.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Securities Administrator shall promptly following such
date cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate account for
the benefit of such Certificateholders, and 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 nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Master
Servicer shall be entitled to all unclaimed funds and other assets which remain
subject hereto, and the Securities Administrator upon transfer of such funds
shall be discharged of any responsibility for such funds, and the
Certificateholders shall look to the Master Servicer for payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event the purchase option provided in Section 10.01 is
exercised, the Trust shall be terminated in accordance with the following
additional requirements:
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(i) The Trustee at the direction of the Securities Administrator
shall sell any remaining assets of the Trust Fund to Xxxxxxxxx or its
designee, the Depositor or its designee or Xxxxx Fargo Bank, N.A. or its
designee, as the case may be, for cash and, within 90 days of such sale,
shall distribute to (or credit to the account of) the Certificateholders
the proceeds of such sale together with any cash on hand (less amounts
retained to meet claims) in complete liquidation of the Trust Fund, and
each REMIC created hereunder; and
(ii) The Securities Administrator shall attach a statement to the
final federal income tax return for each REMIC created hereunder stating
that pursuant to Treasury Regulation Section 1.860F-1, the first day of the
90 day liquidation period for such REMIC was the date on which the Trustee
sold the assets of the Trust Fund and shall satisfy all requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder as evidenced by an Opinion of Counsel delivered to the Trustee
and the Securities Administrator obtained at the expense of the Seller.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee and the Securities Administration as their
attorneys in fact to undertake the foregoing steps.
(c) The Securities Administrator shall provide written notice to the
Delaware Trustee that the Trust Fund has been terminated in accordance with
Article X.
ARTICLE XI
DISPOSITION OF TRUST ASSETS
SECTION 11.01. Disposition of Trust Assets.
Neither the Trust, nor this Agreement, may be terminated or voided, or
any disposition of the assets of the Trust effected, other than in accordance
with the terms hereof, except to the extent that Holders representing no less
than the entire beneficial ownership interest of the Certificates have so
assented.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
This Agreement may be amended from time to time by Seller, the
Depositor, the Master Servicer, the Securities Administrator, the Delaware
Trustee and the Trustee, and without the consent of the Certificateholders, (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be defective or inconsistent with any other provisions herein, (iii) to make
any other provisions with respect to matters or questions arising under this
Agreement, which shall not be inconsistent with the provisions of this
Agreement, or (iv) to
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conform the terms hereof to the description thereof provided in the Prospectus;
provided, however, that any such action listed in clause (i) through (iii) above
shall be deemed not to adversely affect in any material respect the interests of
any Certificateholder, if evidenced by (i) written notice to the Depositor, the
Seller, the Master Servicer, the Securities Administrator, the Delaware Trustee
and the Trustee from each Rating Agency that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency or (ii) an Opinion of Counsel
stating that such amendment shall not adversely affect in any material respect
the interests of any Certificateholder, is permitted by the Agreement and all
the conditions precedent, if any have been complied with, delivered to the
Master Servicer, the Securities Administrator and the Trustee.
In addition, this Agreement may be amended from time to time by
Seller, the Depositor, the Master Servicer, the Securities Administrator, the
Delaware Trustee and the Trustee and with the consent of the Majority
Certificateholders 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 or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates that are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) 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 (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66 2/3% Percentage Interest in such Class, or (z)
reduce the percentage of Voting Rights required by clause (y) above without the
consent of the Holders of all Certificates of such Class then outstanding. Upon
approval of an amendment, a copy of such amendment shall be sent to each Rating
Agency.
Notwithstanding any provision of this Agreement to the contrary,
neither the Trustee nor the Securities Administrator shall consent to any
amendment to this Agreement unless it shall have first received an Opinion of
Counsel, delivered by and at the expense of the Person seeking such Amendment
(unless such Person is the Trustee or the Securities Administrator, in which
case the Trustee or the Securities Administrator shall be entitled to be
reimbursed for such expenses by the Trust pursuant to Section 8.05 hereof), to
the effect that such amendment will not result in the imposition of a tax on any
REMIC created hereunder pursuant to the REMIC Provisions or cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding and that the amendment is being made in accordance
with the terms hereof, such amendment is permitted by this Agreement and all
conditions precedent, if any, have been complied with.
Promptly after the execution of any such amendment the Securities
Administrator shall furnish, at the expense of the Person that requested the
amendment if such Person is the Seller (but in no event at the expense of the
Trustee or the Securities Administrator), otherwise at the expense of the Trust,
a copy of such amendment and the Opinion of Counsel referred to in the
immediately preceding paragraph to the Master Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 12.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such
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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.
The Trustee and Securities Administrator may, but shall not be
obligated to, enter into any amendment pursuant to this 12.01 Section that
affects its rights, duties and immunities under this Agreement or otherwise.
SECTION 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Trustee at the
expense of the Trust, but only upon direction of Certificateholders accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
SECTION 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person 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 of any provision
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 default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
134
expenses and liabilities to be incurred therein or thereby, and the Trustee for
15 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
is understood and intended, and 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 of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 12.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 12.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of Delaware, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 12.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service or delivered
via telecopy, to (a) in the case of the Seller, to Xxxxxxxxx Mortgage Home
Loans, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000,
Attention: Xxxxxxx Xxxxx (telecopy number (000) 000-0000), or such other address
or telecopy number as may hereafter be furnished to the Depositor, the Master
Servicer, the Securities Administrator, and the Trustee in writing by the
Seller, (b) in the case of the Trustee, to the Corporate Trust Office or such
other address or telecopy number as may hereafter be furnished to the Depositor,
the Master Servicer, the Securities Administrator, and the Seller in writing by
the Trustee, (c) in the case of the Depositor, to Structured Asset Mortgage
Investments II Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Legal
(telecopy number (000) 000-0000), or such other address or telecopy number as
may be furnished to the Seller, the Master Servicer, the Securities
Administrator, and the Trustee in writing by the Depositor, (d) in the case of
the Delaware Trustee, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000; and (e) in the case of the Master Servicer or Securities
Administrator, for certificate transfer purposes, at its Corporate Trust Office
and for all other purposes at X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, or for
overnight delivery, at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000
(Attention: Xxxxxxxxx 0000-0), Xxxxxxxxx no.: (000) 000-0000, or such other
address or telecopy number as may be furnished to the Depositor, the Seller, the
Securities Administrator, and the Trustee in writing by the Master Servicer. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Notice of any Event of Default shall be given by
telecopy and by certified mail. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have duly been
135
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopied hereunder shall also be mailed to
the appropriate party in the manner set forth above.
SECTION 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be 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 12.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 12.08. Notice to the Rating Agencies.
(a) The Securities Administrator shall be obligated to use its best
reasonable efforts promptly to provide notice to the Rating Agencies with
respect to each of the following of which a Responsible Officer of the
Securities Administrator 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 or waived;
(iii) the resignation or termination of the Master Servicer, the
Securities Administrator or the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class; and
(v) any change in the location of any Account.
(b) In addition, the Securities Administrator shall promptly furnish
to the Rating Agencies copies of each Statement to Certificateholders described
in Section 5.04 hereof; if the Trustee is acting as a successor Master Servicer
pursuant to Section 7.02 hereof, the Trustee shall notify the Rating Agencies of
any event that would result in the inability of the Trustee to make Advances and
the Master Servicer shall promptly furnish to each Rating Agency copies of the
following:
(i) each annual statement as to compliance described in Section
3.17 hereof;
(ii) each annual assessment of compliance and attestation report
described in Section 3.16 hereof; and
136
(iii) each notice delivered pursuant to Section 5.05(b) hereof
which relates to the fact that the Master Servicer has not made an Advance.
(c) All notices to the Rating Agencies provided for in this Agreement
shall be in writing and sent by first class mail, telecopy or overnight courier,
as follows:
If to Moody's, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
If to S&P, to:
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
SECTION 12.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 12.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 12.11. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Seller. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent
137
shall be sufficient for any purpose of this Agreement and conclusive in favor of
the Trustee and the Trust, if made in the manner provided in this Section 12.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
SECTION 12.12. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto.
SECTION 12.13. Derivative Transactions.
The Trust, the Securities Administrator and the Trustee are
authorized, at the direction and the expense of the Holders of a majority of the
Class A-X Certificates (or, if the Class A-X Certificates are no longer
outstanding, a majority of the Voting Rights allocated to the Class of
Subordinate Certificates outstanding having the highest numerical designation),
to enter into such derivative transactions for the benefit of any
Certificateholders as may be deemed desirable by such Holders of the Class A-X
Certificates (or other applicable Class of Certificates), so long as (i) as
evidenced by one or more Opinions of Counsel addressed to the Trustee or the
Securities Administrator, as applicable (at the expense of such Holders), the
execution and delivery of such derivative transaction is permitted under this
Agreement and the inclusion of such derivative in the Trust will not be
inconsistent with the ERISA provisions contained herein or cause the
Certificates (other than the Class A-R Certificate) to fail to qualify for the
Underwriter's Exemption, (ii) a REMIC Opinion (at the expense of such Holders)
is delivered to the Trustee or the Securities Administrator, as applicable,
(iii) an Opinion of Counsel addressed to the Trustee and the Securities
Administrator (at the expense of such Holders) that the execution and delivery
of such derivative transaction and documentation as presented to the Trustee the
Securities Administrator is permitted under this Agreement, and (iv) each Rating
Agency shall have confirmed in writing that the inclusion of such derivative
would not result in a downgrade of its then rating of any Class of Certificates.
138
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of
the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.,
as Depositor
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXXXXX MORTGAGE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
XXXXX FARGO BANK, N.A.,
as Master Servicer
By: /s/ Xxx Xxxxx
------------------------------------
Name: Xxx Xxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By: /s/ Xxx Xxxxx
------------------------------------
Name: Xxx Xxxxx
Title: Vice President
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Sr. Financial Services
Officer
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee and Custodian
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Solely for the purposes of Sections
3.25 and 6.06, accepted and agreed to
by:
XXXXXXXXX MORTGAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the 29th day of August 2006, before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxxxxx known to me to be a Senior Vice
President of Structured Asset Mortgage Investments II Inc., a Delaware
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxx
----------------------------------------
Notary Public
STATE OF NEW MEXICO )
) ss.:
COUNTY OF SANTA FE )
On the 29th day of August 2006, before me, a notary public in and for
said State, personally appeared Xxxxxxx X. Xxxxx known to me to be a Senior Vice
President of Xxxxxxxxx Mortgage Home Loans, Inc., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx Xxx
----------------------------------------
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXX ARUNDEL )
On the 29th day of August 2006, before me, a notary public in and for
said State, personally appeared Xxx Xxxxx known to me to be a Vice President of
Xxxxx Fargo Bank, N.A. that executed the within instrument, and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Notary Public
STATE OF ILLINOIS )
) ss.:
COUNTY OF XXXX )
On the 29th day of August 2006, before me, a notary public in and for
said State, personally appeared Xxxx Xxxxx known to me to be Vice President of
LaSalle Bank National Association, a national banking association that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxxxx X. Xxxx
----------------------------------------
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On the 29th day of August 2006, before me, a notary public in and for
said State, personally appeared Xxxxxx X. Xxxxxxx known to me to be a Senior
Financial Services Officer of Wilmington Trust Company, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Notary Public
SCHEDULE I
MORTGAGE LOAN SCHEDULE
To be retained in a separate closing binder entitled "Xxxxxxxxx 2006-5 Mortgage
Loan Schedule" at the New York, New York offices of Stroock & Stroock & Xxxxx
LLP
EXHIBIT A
FORM OF SENIOR CERTIFICATE
CLASS A-[_] CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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").
ANY TRANSFEREE OF THIS CERTIFICATE ON OR PRIOR TO THE TERMINATION OF THE AUCTION
SWAP AGREEMENT WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN), THAT EITHER (A) SUCH
TRANSFEREE IS NOT ACQUIRING SUCH CERTIFICATE FOR, ON BEHALF OF, OR WITH THE
ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975
OF THE CODE, OR (B) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR EXEMPTIVE RELIEF UNDER THE STATUTORY EXEMPTION FOR NONFIDUCIARY SERVICE
PROVIDERS UNDER SECTION 408(b)(17) OF ERISA AND SECTION 4975(d)(2) OF THE CODE
OR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX-00-00,
XXXX-00-00, PTCE-96-23 OR SOME OTHER APPLICABLE EXEMPTION. IF THE
REPRESENTATIONS IN THIS PARAGRAPH ARE VIOLATED, THEN THE LAST PRECEDING
PERMITTED BENEFICIAL OWNER OF THE CERTIFICATE WILL RETROACTIVELY BE TREATED AS
ITS OWNER.
Certificate No.: [_______]
Cut-Off Date: August 1, 2006
First Distribution Date: September 25, 2006
Initial Certificate Principal $[_____]
Balance of this Certificate
("Denomination"):
Original Class Certificate
Principal Balance of this Class: $[_____]
Percentage Interest: [___]%
Pass-Through Rate: Variable
CUSIP: 88522R __ _
Class: A-[__]
Assumed Final Distribution Date: August 25, 2036
A-2
Xxxxxxxxx Mortgage Securities Trust 2006-5,
Mortgage Loan Pass-Through Certificates,
Series 2006-5
Class A-[___]
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of adjustable rate and hybrid, first lien
mortgage loans (the "Mortgage Loans") purchased from others by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., as Depositor.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer, the Securities Administrator, the
Delaware Trustee or the Trustee referred to below or any of their respective
affiliates.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the Original Class Certificate Principal
Balance) in certain monthly distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Structured Asset Mortgage
Investments II Inc. (the "Depositor"). The Trust was created pursuant to (i) the
Original Trust Agreement dated as of August 24, 2006 by and among the Depositor,
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee") and
LaSalle Bank National Association, as trustee (the "Trustee") and (ii) a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on August 24, 2006. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement dated as
of August 1, 2006 (the "Agreement") by and among the Depositor, Xxxxxxxxx
Mortgage Home Loans, Inc. ("TMHL"), as seller (the "Seller"), Xxxxx Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), the Delaware Trustee and the Trustee, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
A-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: August __, 0000
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
By: XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By
-------------------------------------
This is one of the Certificates
referenced in the within-mentioned
Agreement
By
----------------------------------
Authorized Signatory of
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
A-4
EXHIBIT B
FORM OF CLASS A-X CERTIFICATE
CLASS A-X CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
AFTER THE DISTRIBUTION DATE IN AUGUST 2011, THE CERTIFICATE NOTIONAL BALANCE OF
THIS CERTIFICATE WILL EQUAL ZERO.
Certificate No.: [_______]
Cut-Off Date: August 1, 2006
First Distribution Date: September 25, 2006
Initial Certificate Notional
Amount of this Certificate
("Denomination"): Notional Amount
Original Class Certificate
Notional Amount of this Class: Notional Amount
Percentage Interest: 100%
Pass-Through Rate: Variable
CUSIP: 88522R AC 8
B-1
Class: A-X
Assumed Final Distribution Date: August 25, 2011
B-2
Xxxxxxxxx Mortgage Securities Trust 2006-5,
Mortgage Loan Pass-Through Certificates,
Series 2006-5
Class A-X
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of adjustable rate and hybrid, first lien
mortgage loans (the "Mortgage Loans") purchased from others by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., as Depositor.
This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Seller, the Master Servicer, the
Securities Administrator or the Trustee referred to below or any of their
respective affiliates.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the Original Class Certificate Notional
Amount) in certain monthly distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Structured Asset Mortgage
Investments II Inc. (the "Depositor"). The Trust was created pursuant to (i) the
Original Trust Agreement dated as of August 24, 2006 by and among the Depositor,
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee") and
LaSalle Bank National Association, as trustee (the "Trustee") and (ii) a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on August 24, 2006. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement dated as
of August 1, 2006 (the "Agreement") by and among the Depositor, Xxxxxxxxx
Mortgage Home Loans, Inc. ("TMHL"), as seller (the "Seller"), Xxxxx Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), the Delaware Trustee and the Trustee, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
B-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: August __, 0000
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
By: XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By
-------------------------------------
This is one of the Certificates
referenced in the within-mentioned
Agreement
By
----------------------------------
Authorized Signatory of
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
B-4
EXHIBIT C-1
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER (A) A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF THE CODE OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING PLAN ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT THE TRANSFER, OR (B) A REPRESENTATION
THAT THE PURCHASER IS AN INSURANCE COMPANY PURCHASING THIS CERTIFICATE WITH
FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60") AND THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF
PTCE-95-60, OR (C) AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE
VOID AND OF NO EFFECT.
Certificate No.: 1
Cut-Off Date: August 1, 2006
First Distribution Date: September 25, 2006
Initial Certificate Principal
Balance of this Certificate: $100
Original Class Certificate
Notional Amount of this Class: $100
C-2-1
Percentage Interest: 100%
Pass-Through Rate: Weighted Average
CUSIP: 8822R AD 6
Class: A-R
Assumed Final Distribution Date: September 25, 2006
C-2-2
Xxxxxxxxx Mortgage Securities Trust 2006-5
Mortgage Loan Pass-Through Certificates,
Series 2006-5
Class A-R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of adjustable rate and hybrid, first lien
mortgage loans (the "Mortgage Loans") purchased from others by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., as Depositor.
This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Seller, the Master Servicer, the
Securities Administrator, the Delaware Trustee or the Trustee referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that _________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate specified above in the
interest represented by all Certificates of the Class to which this Certificate
belongs in a Trust consisting primarily of the Mortgage Loans deposited by
Structured Asset Mortgage Investments II Inc. (the "Depositor"). The Trust was
created pursuant to (i) the Original Trust Agreement dated as of August 24, 2006
by and among the Depositor, Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee") and LaSalle Bank National Association, as trustee (the
"Trustee") and (ii) a Certificate of Trust filed with the Secretary of State of
the State of Delaware on August 24, 2006. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement dated as of August 1, 2006 (the "Agreement") by and among the
Depositor, Xxxxxxxxx Mortgage Home Loans, Inc. ("TMHL"), as seller (the
"Seller"), Xxxxx Fargo Bank, N.A., as master servicer (the "Master Servicer")
and securities administrator (the "Securities Administrator"), the Delaware
Trustee and the Trustee, to which Agreement the Holder of this Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound. To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement.
Any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
Corporate Trust Office or the office or agency maintained by the Trustee.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Securities
Administrator of (a) a transfer affidavit of the proposed transferee and (b) a
transfer certificate of the transferor, each of such documents to be in the form
described in the Agreement, (iii) each person holding or acquiring any Ownership
Interest in this Certificate must agree to require a transfer affidavit and to
deliver a transfer certificate to the Securities Administrator as required
C-2-3
pursuant to the Agreement, (iv) each person holding or acquiring an Ownership
Interest in this Certificate must agree not to transfer an Ownership Interest in
this Certificate if it has actual knowledge that the proposed transferee is not
a Permitted Transferee and (v) any attempted or purported transfer of any
Ownership Interest in this Certificate in violation of such restrictions will be
absolutely null and void and will vest no rights in the purported transferee.
The Securities Administrator will provide the Internal Revenue Service and any
pertinent persons with the information needed to compute the tax imposed under
the applicable tax laws on transfers of residual interests to disqualified
organizations, if any person other than a Permitted Transferee acquires an
Ownership Interest on a Class A-R Certificate in violation of the restrictions
mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized officer of the Securities Administrator.
C-2-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: August __, 0000
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
By: XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By
-------------------------------------
This is the A-R Certificate
referenced in the within-mentioned
Agreement
By
----------------------------------
Authorized Signatory of
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
C-2-5
EXHIBIT D
FORM OF SUBORDINATE CERTIFICATE
CLASS B-[_] CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [APPLICABLE TO BOOK-ENTRY
CERTIFICATES ONLY; DELETE FOR CERTIFICATES IN PHYSICAL FORM]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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").
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "1933 ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS CERTIFICATE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.] [Applicable only to Class B-4, Class B-5 and Class B-6
Certificates]
[THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF IS DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT IT ACQUIRED SUCH CERTIFICATE (I)(A) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT OR
(B) AS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE 1933
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A.] [Applicable only to Class B-4, Class B-5 and Class B-6
Certificates]
[IN THE EVENT THAT THE RATING ON THIS CLASS B-[ ] CERTIFICATE IS DOWNGRADED
BELOW INVESTMENT GRADE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR
EITHER (A) A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT
D-1
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF THE CODE OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING PLAN ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT THE TRANSFER, OR (B) A REPRESENTATION
THAT THE PURCHASER IS AN INSURANCE COMPANY PURCHASING THIS CERTIFICATE WITH
FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF
PTCE 95-60. A TRANSFEREE ACQUIRING A BOOK-ENTRY CERTIFICATE SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS IN THIS PARAGRAPH.] [Applicable only to Class B-1,
Class B-2 and Class B-3 Certificates]
[NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER (A) A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF THE CODE OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING PLAN ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT THE TRANSFER, OR (B) A REPRESENTATION
THAT THE PURCHASER IS AN INSURANCE COMPANY PURCHASING THIS CERTIFICATE WITH
FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF
PTCE 95-60. A TRANSFEREE ACQUIRING A BOOK-ENTRY CERTIFICATE SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS IN THIS PARAGRAPH.] [Applicable only to Class B-4,
Class B-5 and Class B-6 Certificates]
[NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (A) (1)
UNLESS SUCH TRANSFER IS MADE IN RELIANCE UPON RULE 144A OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT") OR (2) UNLESS SUCH TRANSFER IS MADE IN
RELIANCE UPON RULE 501 (C)(1), (2), (3) OR (7) OF THE 1933 ACT (IN EACH CASE AS
EVIDENCED BY AN INVESTMENT LETTER DELIVERED TO THE SECURITIES ADMINISTRATOR, IN
SUBSTANTIALLY THE FORM ATTACHED TO THE POOLING AND SERVICING AGREEMENT AND, IF
SO REQUIRED BY THE SECURITIES ADMINISTRATOR, A WRITTEN OPINION OF COUNSEL (WHICH
MAY BE IN-HOUSE COUNSEL) ACCEPTABLE TO AND IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE SECURITIES ADMINISTRATOR, THAT SUCH TRANSFER MAY BE MADE
PURSUANT TO AN EXEMPTION, DESCRIBING THE APPLICABLE EXEMPTION AND THE BASIS
THEREFOR, FROM THE 1933 ACT OR IS BEING MADE PURSUANT TO THE 1933 ACT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE SECURITIES ADMINISTRATOR OR
THE DEPOSITOR) OR (B) THE TRANSFEROR SHALL HAVE EXECUTED A TRANSFEROR
CERTIFICATE (IN SUBSTANTIALLY THE FORM ATTACHED TO THE POOLING AND SERVICING
AGREEMENT) AND THE TRANSFEREE SHALL HAVE EXECUTED AN INVESTMENT
D-2
LETTER (IN SUBSTANTIALLY THE FORM ATTACHED TO THE POOLING AND SERVICING
AGREEMENT) ACCEPTABLE TO AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE DEPOSITOR AND THE SECURITIES ADMINISTRATOR CERTIFYING TO THE DEPOSITOR AND
THE SECURITIES ADMINISTRATOR THE FACTS SURROUNDING SUCH TRANSFER, WHICH
INVESTMENT LETTER SHALL NOT BE AN EXPENSE OF THE SECURITIES ADMINISTRATOR OR THE
DEPOSITOR.] [APPLICABLE TO CLASS B-4, CLASS B-5 AND CLASS B-6 CERTIFICATES THAT
ARE IN PHYSICAL FORM ONLY]
D-3
THIS CERTIFICATE IS SUBORDINATE IN RIGHT AND PAYMENT AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
Certificate No.: [_______]
Cut-Off Date: August 1, 2006
First Distribution Date: September 25, 2006
Initial Certificate Principal
Balance of this Certificate
("Denomination"): $[____]
Original Class Certificate
Principal Balance of this Class: $[____]
Percentage Interest: [__]%
Pass-Through Rate: Weighted Average
CUSIP: 88522R ____ __
Class: B-[__]
Assumed Final Distribution Date: Xxxxxx 00, 0000
X-0
Xxxxxxxxx Mortgage Securities Trust 2006-5,
Mortgage Loan Pass-Through Certificates,
Series 2006-5
Class B-[_]
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of adjustable rate and hybrid, first lien
mortgage loans (the "Mortgage Loans") purchased from others by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., as Depositor.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer, the Securities Administrator, the
Delaware Trustee or the Trustee referred to below or any of their respective
affiliates.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the Original Class Certificate Principal
Balance) in certain monthly distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Structured Asset Mortgage
Investments II Inc. (the "Depositor"). The Trust was created pursuant to (i) the
Original Trust Agreement dated as of August 24, 2006 by and among the Depositor,
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee") and
LaSalle Bank National Association, as trustee (the "Trustee") and (ii) a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on August 24, 2006. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement dated as
of August 1, 2006 (the "Agreement") by and among the Depositor, Xxxxxxxxx
Mortgage Home Loans, Inc. ("TMHL"), as seller (the "Seller"), Xxxxx Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), the Delaware Trustee and the Trustee, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
[No transfer of this Certificate shall be made unless such disposition
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and any applicable state securities laws or is made in
accordance with the 1933 Act and such laws. In the event of any transfer, (i)
(A) such transfer is made in reliance upon Rule 144A or (B) such transfer is
made to an "accredited investor" under Rule 501(c)(1), (2), (3) or (7) (in each
case as evidenced by an investment letter delivered to the Securities
Administrator, in substantially the form attached to the Pooling and Servicing
Agreement, and, if so required by the Securities Administrator and the
Depositor, a written Opinion of Counsel (which may be in-house counsel)
acceptable to and in form and substance reasonably satisfactory to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which
D-5
Opinion of Counsel shall not be an expense of the Securities Administrator or
the Depositor) or (ii) the Securities Administrator shall require the transferor
to execute a transferor certificate (in substantially the form attached to the
Pooling and Servicing Agreement) and the transferee to execute an investment
letter (in substantially the form attached to the Pooling and Servicing
Agreement) acceptable to and in form and substance reasonably satisfactory to
the Securities Administrator certifying to the Depositor and the Securities
Administrator the facts surrounding such transfer, which investment letter shall
not be an expense of the Securities Administrator or the Depositor.] [APPLICABLE
TO CERTIFICATES IN PHYSICAL FORM ONLY; DELETE FOR BOOK-ENTRY CERTIFICATES]
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
D-6
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: August __, 0000
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
By: XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
By
-------------------------------------
This is one of the Certificates
referenced in the within-mentioned
Agreement
By
----------------------------------
Authorized Signatory of
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
D-7
EXHIBIT E
FORM OF REVERSE OF THE CERTIFICATES
XXXXXXXXX MORTGAGE SECURITIES TRUST 2006-5
Mortgage Loan Pass-Through Certificates, Series 2006-5
Reverse Certificate
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage Loan
Pass-Through Certificates, Series 2006-5 (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
governed by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month, or if the 25th day is not a Business Day, then on
the next succeeding Business Day (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made, (i) in the case of a
Physical Certificate, by check or money order mailed to the address of the
person entitled thereto as it appears on the Certificate Register or, upon the
request of a Certificateholder, by wire transfer as set forth in the Agreement
and (ii) in the case of a Book-Entry Certificate, to the Depository, which shall
credit the amounts of such distributions to the accounts of its Depository
Participants in accordance with its normal procedures. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the office or agency of the Securities
Administrator specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time, by the Depositor, the Seller, the Master
Servicer, the Securities Administrator, the Trustee, the Delaware Trustee and
Holders of the requisite percentage of the Percentage Interests of each Class of
Certificates affected by such amendment, as specified in the Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and
E-1
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Securities Administrator accompanied by a written instrument of transfer in
form satisfactory to the Securities Administrator and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
[Subject to the terms of the Agreement, each Class of Book-Entry
Certificates will be registered as being held by the Depository or its nominee
and beneficial interests will be held by Certificate Owners through the
book-entry facilities of the Depository or its nominee in minimum denominations
of $25,000, in the case of the Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificates, provided, that, with respect to initial European
investors such certificates must be purchased in minimum total investments of at
least $100,000 and $100,000, in the case of the Class A-X, Class B-4, Class B-5
and Class B-6 Certificates and, in each case, in integral multiples of $1 in
excess thereof.] [APPLICABLE TO BOOK-ENTRY CERTIFICATES ONLY; DELETE FOR
CERTIFICATES IN PHYSICAL FORM.]
[The Class A-R Certificate will be issued as a single Certificate and
maintained in physical form, representing the entire Percentage Interest in that
Class.] [APPLICABLE TO CERTIFICATES IN PHYSICAL FORM.]
[The Class A-R Certificate is issuable only in a Percentage Interest
of 100%.] [APPLICABLE TO CLASS A-R CERTIFICATES ONLY.]
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Seller, the Master Servicer, the Securities
Administrator, the Delaware Trustee and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.
E-2
[Each Holder of a Class A-1 or Class A-2 Certificate is deemed, by
acceptance of such Certificate, (i) to authorize Xxxxx Fargo Bank, N.A. to
execute and deliver the Auction Administration Agreement, the Auction Swap
Agreement and the applicable Yield Maintenance Agreement on its behalf and (ii)
to acknowledge and accept and agree to be bound by the provisions of the Auction
Administration Agreement, the Auction Swap Agreement and the applicable Yield
Maintenance Agreement.] [Applicable to Auction Certificates only; delete for
Class A-X, Class A-R and Subordinate Certificates.]
On any Distribution Date on which the aggregate of the Stated
Principal Balances of the Mortgage Loans on such date is equal to or less than
20% of the Cut-Off Date Aggregate Principal Balance, Xxxxxxxxx Mortgage, Inc.
will have the option to call the Certificates for a purchase price equal to (i)
for all Certificates (other than the Class A-X and Class A-R Certificates) the
sum of (1) the aggregate Class Certificate Principal Balance and (2) the accrued
interest thereon at the related Pass-Through Rates, less amounts of interest and
principal otherwise being paid to such Holders on such Distribution Date, (ii)
for the Class A-X Certificates the present value as of the date of such purchase
of the remaining payments to be based on the Class A-X Certificates (such
present value to be based upon a discount rate that will approximate the
expected Yield to Maturity of the Class A-X Certificates and (iii) for the Class
A-R Certificate, $1.00.
On any date on which the aggregate of the Stated Principal Balances of
the Mortgage Loans on such date is equal to or less than 10% of the Cut-Off Date
Aggregate Principal Balance, Xxxxxxxxx Mortgage Home Loans, Inc., in its
capacity as a Servicer (hereinafter "TMHL"), may purchase, on the related
Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a
price equal to the Termination Price. In the event that TMHL does not exercise
its right of optional termination, on any date on which the aggregate of the
Stated Principal Balances of the Mortgage Loans on such date is equal to or less
than 5% of the Cut-Off Date Aggregate Principal Balance, Xxxxx Fargo Bank, N.A.,
in its capacity as Master Servicer, may purchase, on the related Distribution
Date, all of the outstanding Mortgage Loans and REO Properties at a price equal
to the Termination Price. In the event that neither TMHL nor the Master Servicer
exercises its right of optional termination, the obligations and
responsibilities created by the Agreement will terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Class
Certificate Principal Balance of each Class of Certificates has been reduced to
zero, (ii) the final payment or other liquidation of the last Mortgage Loan and
(iii) the Latest Possible Maturity Date.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
E-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
Dated: ____________
----------------------------------------
Signature by or on behalf of assignor
E-4
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________________, or, if mailed by check, to ____________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________
_____________________, the assignee named above, or ____________________________
_______________________________, as its agent.
E-5
EXHIBIT F
REQUEST FOR RELEASE
________________
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as Trustee
under a certain Pooling and Servicing Agreement dated as of August 1, 2006 among
Structured Asset Mortgage Investments II Inc., as Depositor, Xxxxxxxxx Mortgage
Home Loans, Inc., as Seller, Xxxxx Fargo Bank, N.A., as Master Servicer and
Securities Administrator, Wilmington Trust Company, as Delaware Trustee and you,
as Trustee and Custodian (the "Pooling and Servicing Agreement"), the
undersigned [Master Servicer] [Servicer] hereby requests a release of the
Mortgage File held by you as Trustee with respect to the following described
Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The [Master Servicer] hereby certifies
that all amounts received in connection with the loan have been or will be
credited to the Distribution Account (whichever is applicable) pursuant to the
Pooling and Servicing Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The [Master Servicer] [Servicer] hereby
certifies that a Qualified Substitute Mortgage Loan has been assigned and
delivered to you along with the related Mortgage File pursuant to the Pooling
and Servicing Agreement.)
4. Mortgage Loan repurchased. (The [Master Servicer] [Servicer] hereby
certifies that the Purchase Price has been credited to the Collection Account or
the Distribution Account (whichever is applicable) pursuant to the Pooling and
Servicing Agreement.)
5. Other. (Describe)
F-1
The undersigned acknowledges that the above Mortgage File will be held by the
undersigned in accordance with the provisions of the Pooling and Servicing
Agreement and will be returned to you within ten (10) days of our receipt of the
Mortgage File, except if the Mortgage Loan has been paid in full, or repurchased
or substituted for a Qualified Substitute Mortgage Loan (in which case the
Mortgage File will be retained by us without obligation to return to you).
Capitalized terms used herein shall have the meanings ascribed to them in the
Pooling and Servicing Agreement.
________________________________________
[Name of [Master Servicer] [Servicer]]
By:
------------------------------------
Name:
Title: Servicing Officer
F-2
EXHIBIT G-1
FORM OF RECEIPT OF MORTGAGE NOTE
RECEIPT OF MORTGAGE NOTE
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx Xxx
Xxxx, Xxx Xxxx 00000
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5,
Mortgage Loan Pass-Through Certificates, Series 2006-5
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of August 1, 2006, among Structured Asset Mortgage Investments II Inc., as
Depositor, Xxxxxxxxx Mortgage Home Loans, Inc., as Seller, Xxxxx Fargo Bank,
N.A., as Master Servicer and Securities Administrator, Wilmington Trust Company,
as Delaware Trustee and LaSalle Bank National Association, as Trustee, we hereby
acknowledge the receipt of the original Mortgage Note with respect to each
Mortgage Loan listed on Exhibit 1, with any exceptions thereto listed on Exhibit
2.
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
Title:
Dated:
G-1-1
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
[To be retained in a separate closing binder entitled "Xxxxxxxxx 2006-5
Mortgage Loan Schedule" at the offices of Stroock & Stroock & Xxxxx LLP]
G-1-2
EXHIBIT 2
EXCEPTION REPORT
[To be retained in a separate closing binder entitled "Xxxxxxxxx 2006-5
Mortgage Loan Schedule" at the offices of Stroock & Stroock & Xxxxx LLP]
G-1-3
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
INTERIM CERTIFICATION OF TRUSTEE
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement among Structured Asset Mortgage
Investments II Inc., as Depositor, Xxxxxxxxx Mortgage Home Loans,
Inc., as Seller, Xxxxx Fargo Bank, N.A., as Master Servicer and
Securities Administrator, Wilmington Trust Company, as Delaware
Trustee and LaSalle Bank National Association, as Trustee,
Xxxxxxxxx Mortgage Loan Pass-Through Certificates, Series 2006-5
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached schedule) it has received:
(i) all documents required to be delivered to the Trustee pursuant
to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) such documents have been reviewed by the Trustee and have not
been mutilated, damaged or torn and relate to such Mortgage
Loan; and
(iii) based on the Trustee's examination and only as to the foregoing,
the information set forth in the Mortgage Loan Schedule that
corresponds to items (i), (ii), (iii), (xiii), (xiv) and (xviii)
of the Mortgage Loan Schedule accurately reflects information
set forth in the Mortgage File.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-2-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
Title:
G-2-2
EXHIBIT G-3
FORM OF FINAL CERTIFICATION OF TRUSTEE
FINAL CERTIFICATION OF TRUSTEE
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement among Structured Asset Mortgage
Investments II Inc., as Depositor, Xxxxxxxxx Mortgage Home Loans,
Inc., as Seller, Xxxxx Fargo Bank, N.A., as Master Servicer and
Securities Administrator, Wilmington Trust Company, as Delaware
Trustee and LaSalle Bank National Association, as Trustee,
Xxxxxxxxx Mortgage Loan Pass-Through Certificates, Series 2006-5
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received all documents required to be
delivered to the Trustee pursuant to Section 2.01 of the Pooling and Servicing
Agreement.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(xiii), (xiv) and (xviii) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage
G-3-1
Loans identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
Title:
G-3-2
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, ______________________ who first being duly sworn deposes and says:
Deponent is ______________________ of Xxxxxxxxx Mortgage Home Loans, Inc. (the
"Seller") and who has personal knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown and
is currently lost and unavailable after diligent search has been made. The
Seller's records show that an amount of principal and interest on said note is
still presently outstanding, due, and unpaid, and such Seller is still owner and
holder in due course of said lost note.
The Seller executes this Affidavit for the purpose of inducing LaSalle
Bank National Association, as trustee on behalf of Xxxxxxxxx Mortgage Securities
Trust 2006-5, Mortgage Loan Pass-Through Certificates, Series 2006-5, to accept
the transfer of the above described loan from the Seller.
The Seller agrees to indemnify LaSalle Bank National Association and
Structured Asset Mortgage Investments II Inc. and hold them harmless for any
losses incurred by such parties resulting from the fact that the above described
Note has been lost or misplaced.
By:
---------------------------------
_____________________________________
STATE OF )
) ss:
COUNTY OF )
On this ____ day of ___________ 20__, before me, a Notary Public, in and for
said County and State, appeared ________________________, who acknowledged the
extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
_____________________________________
_____________________________________
My commission expires _______________.
H-1
EXHIBIT I
FORM OF ERISA REPRESENTATION
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage Loan
Pass-Through Certificates, Series 2006-5, Class [A-R] [B-4] [B-5]
[B-6]
Ladies and Gentlemen:
1. The undersigned is the ______________________ of
_________________ (the "Transferee"), a [corporation duly organized] and
existing under the laws of __________, on behalf of which such officer makes
this affidavit.
2. The Transferee either (x) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or a plan or arrangement subject to Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"), the Trustee
of any such plan or arrangement or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer (a "Plan Investor"); (y) if the Certificates have been the subject of
an ERISA-Qualifying Underwriting, is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60") and that the purchase and holding of such
Certificates are covered under Section I and III of PTCE 95-60; or (z) shall
deliver to the Securities Administrator and the Depositor an opinion of counsel
(a "Benefit Plan Opinion") satisfactory to the Securities Administrator, and
upon which the Securities Administrator and the Depositor shall be entitled to
rely, to the effect that the purchase or holding of such Certificate by the
Transferee will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and will not subject the
Trustee, the Master Servicer, any Servicer, the Securities Administrator or the
Depositor to any obligation in addition to those undertaken by such entities in
the Pooling and
I-1
Servicing Agreement or to any liability, which opinion of counsel shall not be
an expense of the Securities Administrator or the Depositor.
3. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement dated as of August 1, 2006 (the "Agreement")
among Structured Asset Mortgage Investments II Inc., as Depositor, Xxxxxxxxx
Mortgage Home Loans, Inc., as Seller, Xxxxx Fargo Bank, N.A., as Master Servicer
and Securities Administrator, Wilmington Trust Company, as Delaware Trustee and
LaSalle Bank National Association, as Trustee, no transfer of the
ERISA-Restricted Certificates shall be permitted to be made to any person unless
the Depositor and Securities Administrator have received a certificate from such
transferee in the form hereof.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
________________________________________
[Transferee]
By
-------------------------------------
Name:
Title:
I-2
EXHIBIT J-1
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage Loan
Pass-Through Certificates, Series 2006-5
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
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 are an "accredited investor", as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) if we are acquiring an ERISA-Restricted
Certificate, either: (i) we are not an employee benefit plan that is subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (a "Plan"), nor are we acting on behalf of any such plan;
(ii) if the Certificates have been the subject of an ERISA-Qualifying
Underwriting, we are an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and the purchase and holding of such Certificates are covered under
Section I and III of PTCE 95-60 or (iii) we have presented an Opinion of Counsel
satisfactory to the Securities Administrator, which Opinion of Counsel shall not
be an expense of either the Securities Administrator or the Trust, addressed to
the Securities Administrator and the Depositor, to the effect that the purchase
and holding of such ERISA-Restricted Certificate that is a Physical Certificate
will not result in a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code and will not subject the Trustee, the Master
Servicer, any
J-1-1
Servicer, the Securities Administrator or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement or to any liability or,
(e) if we are acquiring an ERISA-Restricted Auction Certificate, either (i) we
not acquiring such Certificate for, on behalf of, or with the assets of a Plan
or (ii) the acquisition and holding of such Certificate are eligible for
exemptive relief under the statutory exemption for nonfiduciary service
providers under Section 408(b)(17) of ERISA and Section 4975(d)(2) of the Code
or under Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0,
XXXX-00-00, XXXX-00-00, PTCE-96-23 or some other applicable exemption, (f) we
are acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (i) below), (g) 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, or
taken any other action which would result in a violation of Section 5 of the
Act, and (i) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel to the addressees of this Certificate satisfactory to the
Securities Administrator that such sale, transfer or other disposition may be
made pursuant to an exemption from the Act, (2) the purchaser or transferee of
such Certificate has executed and delivered to you a certificate to
substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By
-------------------------------------
Authorized Officer
X-0-0
XXXXXXX X-0
FORM OF RULE 144A INVESTMENT LETTER
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage Loan
Pass-Through Certificates, Series 2006-5
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have had
the opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) if we are acquiring an ERISA-Restricted Certificate, either:
(i) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") (a "Plan"), nor are we acting on behalf of any such plan; (ii) if the
Certificates have been the subject of an ERISA-Qualifying Underwriting, we are
an insurance company which is purchasing such Certificates with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchase and holding of such Certificates are covered under Section I and III of
PTCE 95-60 or (iii) we have presented an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
either the Securities Administrator or the Trust, addressed to the Securities
Administrator and the Depositor, to the effect that the purchase and holding of
such ERISA-Restricted Certificate that is a Physical Certificate will not result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and will not subject the Trustee, the Master Servicer, any
Servicer, the Securities Administrator or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement or to any liability,
(d) if an ERISA-Restricted Auction
J-2-1
Certificate, either (i) we not acquiring such Certificate for, on behalf of, or
with the assets of a Plan or (ii) the acquisition and holding of such
Certificate are eligible for exemptive relief the statutory exemption for
nonfiduciary service providers under Section 408(b)(17) of ERISA and Section
4975(d)(2) of the Code or under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX-00-00, XXXX-00-00, PTCE-96-23 or some other applicable
exemption, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act and have completed either of the forms of certification to
that effect attached hereto as Annex 1 or Annex 2. We are aware that the sale to
us is being made in reliance on Rule 144A. We are acquiring the Certificates for
our own account or for resale pursuant to Rule 144A and further, understand that
such Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By
-------------------------------------
Authorized Officer
X-0-0
XXXXX 0 XX XXXXXXX X-0
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_____(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
J-2-3
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. 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.
J-2-4
v. 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.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
________________________________________
Print Name of Buyer
By:
------------------------------------
Name:
Title:
Date: __________________________________
X-0-0
XXXXX 0 XX XXXXXXX X-0
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $_____ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_____ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
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,
J-2-6
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
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.
________________________________________
Print Name of Buyer or Adviser
By:
------------------------------------
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date: __________________________________
J-2-7
EXHIBIT K
FORM OF TRANSFEROR CERTIFICATE
[date]
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5, Mortgage
Loan Pass-Through Certificates, Series 2006-5, Class A-R
Ladies and Gentlemen:
In connection with our proposed transfer of an Ownership Interest in
Class A-R Certificates, we hereby certify that (a) we have no knowledge that the
proposed Transferee is not a Permitted Transferee acquiring an Ownership
Interest in such Class A-R Certificate for its own account and not in a capacity
as trustee, nominee, or agent for another Person, and (b) we have not undertaken
the proposed transfer in whole or in part to impede the assessment or collection
of tax.
Very truly yours,
[_____________________]
By:
------------------------------------
K-1
EXHIBIT L
TRANSFER AFFIDAVIT FOR CLASS A-R CERTIFICATE
PURSUANT TO SECTION 6.02(e)
XXXXXXXXX MORTGAGE SECURITIES TRUST 2006-5,
MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2006-5, CLASS A-R
STATE OF )
) ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ______________________, the proposed
Transferee of a 100% Ownership Interest in the Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), dated as of August 1, 2006, relating to the above-referenced
Certificates, among Structured Asset Mortgage Investments II Inc., as
Depositor, Xxxxxxxxx Mortgage Home Loans, Inc., as Seller, Xxxxx Fargo
Bank, N.A., as Master Servicer, Wilmington Trust Company, as Delaware
Trustee and LaSalle Bank National Association, as Trustee. Capitalized
terms used, but not defined herein, shall have the meanings ascribed to
such terms in the Agreement. The Transferee has authorized the undersigned
to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date of
the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest for its own account and not in a capacity as trustee,
nominee or agent for another party.
3. The Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent;
and (iii) the Person otherwise liable for the tax shall be relieved of
liability for the tax if the subsequent Transferee furnished to such Person
an affidavit that such subsequent Transferee is a Permitted Transferee and,
at the time of Transfer, such Person does not have actual knowledge that
the affidavit is false. The Transferee has provided financial statements or
other financial information requested by the Transferor in connection with
the transfer of the Certificate to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.
4. The Transferee has been advised of, and understands that a tax may be
imposed on a "pass-through entity" holding the Certificate if, at any time
during the taxable year of the pass-through entity, a Disqualified
Organization is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through
entity an affidavit that such record holder is not a Disqualified
Organization and the pass-through entity does not
L-1
have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives and, except as may be provided in Treasury
regulations, persons holding interests in pass-through entities as a
nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 6.02(e) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding
the Transfer and mandatory sales. The Transferee expressly agrees to be
bound by and to abide by the provisions of Section 6.02(e) of the Agreement
and the restrictions noted on the face of the Certificate. The Transferee
understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated
hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to
whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and the Transferee will not Transfer its Ownership Interest or
cause any Ownership Interest to be Transferred to any Person that the
Transferee knows is not a Permitted Transferee. In connection with any such
Transfer by the Transferee, the Transferee agrees to deliver to the Trustee
a certificate substantially in the form set forth as Exhibit K to the
Agreement (a "Transferor Certificate").
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is aware that the Certificate may be a "noneconomic residual
interest" within the meaning of the REMIC provisions and that the
transferor of a noneconomic residual interest will remain liable for any
taxes due with respect to the income on such residual interest, unless no
significant purpose of the transfer was to impede the assessment or
collection of tax.
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IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its duly
authorized officer and its corporate seal to be hereunto affixed, duly attested,
this __ day of _______, 20__.
[NAME OF TRANSFEREE]
By:
------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________________
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
___________ of the Transferee, and acknowledged that he executed the same as his
free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ______day of _________, 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the _____ day of
______, 20__.
L-3
EXHIBIT M
FORM OF CERTIFICATE OF TRUST
This Certificate of Trust of Xxxxxxxxx Mortgage Securities Trust
2006-5 (the "Trust") is being duly executed and filed by the undersigned, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act, 12
Del. C. Sections 3801 et seq. (the "Act").
1. Name. The name of the statutory trust formed hereby is Xxxxxxxxx
Mortgage Securities Trust 2006-5.
2. Delaware Trustee. The name and the business address of the trustee
of the Trust with a principal place of business in the State of Delaware and
County of New Castle is Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000.
3. Effective Date. This Certificate of Trust shall be effective upon
filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the only trustees of the
Trust, have duly executed this Certificate of Trust in accordance with Section
3811(a)(1) of the Act.
Wilmington Trust Company,
as Delaware Trustee
By:
------------------------------------
Name:
Title:
LaSalle Bank, N.A., as Trustee
By:
------------------------------------
Name:
Title:
M-1
EXHIBIT N
LIST OF SERVICERS AND SERVICING AGREEMENTS
1. (a) Servicing Agreement, dated as of March 1, 2002, among Xxxxxxxxx
Mortgage Home Loans, Inc. ("Xxxxxxxxx"), as seller and servicer and Xxxxx
Fargo Bank N.A. ("Xxxxx Fargo"), as master servicer, as amended by the
Amendment to Servicing Agreement, dated as of December 1, 2002, and as
amended by the Second Amendment to Servicing Agreement, dated as of January
1, 2006, and (b) the Subservicing Acknowledgement Agreement, dated as of
March 1, 2002, between Xxxxxxxxx, as servicer, and Cenlar FSB, as
sub-servicer ("Cenlar"), as amended by the Amendment to Subservicing
Acknowledgement Agreement, dated as of December 1, 2002, and by the Second
Amendment to Subservicing Acknowledgement Agreement, dated as of January 1,
2006, including the related Transfer Notice, dated August __, 2006, from
Xxxxxxxxx, as seller, to Xxxxxxxxx, as servicer, and Cenlar, as
sub-servicer.
2. Amended and Restated Correspondent Loan Purchase Agreement, dated as of
March 25, 2002, between Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx")
and First Republic Bank ("First Republic"), including the related Transfer
Notice, dated August __, 2006, from Xxxxxxxxx to First Republic.
3. Amended and Restated Correspondent Loan Purchase Agreement, dated as of
March 27, 2002, between Xxxxxxxxx and Colonial National Mortgage (f/k/a
Colonial Savings, F.A.) ("Colonial"), including the related Transfer
Notice, dated August __, 2006, from Xxxxxxxxx to Colonial.
4. Correspondent Loan Purchase Agreement, dated as of January 31, 2006,
between Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx") and Mellon Trust
of New England, N.A. ("Mellon"), including the related Transfer Notice,
dated August __, 2006, from Xxxxxxxxx to Xxxxxx.
5. Master Reconstituted Servicing Agreement, dated as of August 1, 2006, by
and among Xxxxxxxxx, Countrywide Home Loans Servicing LP ("Countrywide"),
as servicer, LaSalle Bank National Association, as trustee, and
acknowledged by Xxxxx Fargo Bank, N.A., as master servicer, and the related
Transfer Notice, dated June 20, 2006 from Xxxxxxxxx to Countrywide, related
to the Master Mortgage Loan Purchase and Servicing Agreement between
Xxxxxxxxx and Countrywide Home Loans, Inc. dated November 27, 2005, as
amended by Amendment Reg AB dated as of February 28, 2006, and assigned to
Countrywide.
6. Correspondent Loan Purchase Agreement, dated as of April 6, 2006, between
Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx") and First Horizon Home
Loan Corp. ("First Horizon"), including the related Transfer Notice, dated
August __, 2006, from Xxxxxxxxx to First Horizon.
7. Correspondent Loan Purchase Agreement, dated as of October 12, 2004,
between Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx") and Los Alamos
National Bank
N-1
("Los Alamos"), including the related Transfer Notice, dated August __,
2006, from Xxxxxxxxx to Los Alamos.
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EXHIBIT O
NOTICE OF EXERCISE OF OPTIONAL SECURITIES PURCHASE RIGHT
Date _________________
[TRUSTEE]
[SECURITIES ADMINISTRATOR]
[RATING AGENCIES]
[MASTER SERVICER]
Re: Xxxxxxxxx Mortgage Securities Trust 2006-5
Ladies and Gentlemen:
Pursuant to the terms of the Pooling and Servicing Agreement (the
"Agreement"), dated as of August 1, 2006, among Structured Asset Mortgage
Investments II Inc., as depositor, Xxxxxxxxx Mortgage Home Loans, Inc., Xxxxx
Fargo Bank, N.A., as master servicer and securities administrator, LaSalle Bank
National Association, as trustee, and Wilmington Trust Company, as Delaware
trustee, we hereby give notice of our exercise of the Optional Securities
Purchase Right. We intend to purchase the outstanding Certificates on the
Distribution Date in ______ 20__. [We appoint __________________ as designee to
purchase the Class A-R Certificates.]
Very truly yours,
XXXXXXXXX MORTGAGE, INC.
By:
------------------------------------
Authorized Officer
O-1
EXHIBIT P
[Reserved]
P-1
EXHIBIT Q
SERVICING CRITERIA
The assessment of compliance to be delivered by Xxxxx Fargo Bank, N.A.
("Xxxxx Fargo"), in its capacities as Master Servicer and Securities
Administrator, and LaSalle Bank National Association, in its capacity as
Custodian, shall address, at a minimum, the criteria identified below as
"Applicable Servicing Criteria":
APPLICABLE APPLICABLE
SERVICING SERVICING
CRITERIA FOR CRITERIA FOR
SERVICING CRITERIA XXXXX FARGO LaSalle
--------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect X
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 mortgage loans are deposited into the appropriate X
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 behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash X
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, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
Q-1
APPLICABLE APPLICABLE
SERVICING SERVICING
CRITERIA FOR CRITERIA FOR
SERVICING CRITERIA XXXXX FARGO LaSalle
--------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
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 prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
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 filed with the X
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 mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two X
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 investor reports agree X
with cancelled checks, or other form of payment, or custodial
bank statements.
Q-2
APPLICABLE APPLICABLE
SERVICING SERVICING
CRITERIA FOR CRITERIA FOR
SERVICING CRITERIA XXXXX FARGO LaSalle
--------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool X X
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans 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 of an obligor's
mortgage loans (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., 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 maintained during
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
Q-3
APPLICABLE APPLICABLE
SERVICING SERVICING
CRITERIA FOR CRITERIA FOR
SERVICING CRITERIA XXXXX FARGO LaSalle
-------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-------------------------------------------------------------------
accordance with the obligor's mortgage loan
documents, on at least an annual basis, or such
other period specified in the transaction
agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with
applicable mortgage loan documents and state
laws; and (C) such funds are returned to the
obligor within 30 calendar days of full
repayment of the related mortgage loans, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as
tax or insurance payments) are made on or before
the related penalty or expiration dates, as
indicated on the appropriate bills or notices
for such payments, provided that such support
has been received by the servicer at least 30
calendar days prior to these dates, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with
any payment to be made on behalf of an obligor
are paid from the servicer's funds and not
charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are
posted within two business days to the obligor's
records maintained by the servicer, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible X
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.
Q-4
EXHIBIT R
ADDITIONAL FORM 10-D DISCLOSURE
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 1: DISTRIBUTION AND POOL PERFORMANCE INFORMATION
Information included in the Distribution Servicer
Date Statement Master Servicer
Securities Administrator
Any information required by 1121 which is NOT included Depositor
on the Distribution Date 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:
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator
and Depositor
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
o Depositor Depositor
o Trustee Trustee
o Securities Administrator Securities Administrator
o Master Servicer Master Servicer
o Custodian Custodian
o 1110(b) Originator Depositor
o Any 1108(a)(2) Servicer (other than the Master
Servicer or Securities Administrator) Servicer
o Any other party contemplated by 1100(d)(1) Depositor
ITEM 3: SALE OF SECURITIES AND USE OF PROCEEDS Depositor
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.
R-1
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 4: DEFAULTS UPON SENIOR SECURITIES Securities Administrator
Trustee (in the event of the
Master Servicer's termination)
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 OF SECURITY Securities Administrator
HOLDERS Trustee
Information from Item 4 of Part II of Form 10-Q
ITEM 6: SIGNIFICANT OBLIGORS OF POOL ASSETS Depositor
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*
o Determining applicable disclosure threshold Depositor
o Requesting required financial information (including Depositor
any required accountants' consent to the use
thereof) or effecting incorporation by reference
Item 1115(b) - Derivative Counterparty Financial
Information*
o Determining current maximum probable exposure Depositor
o Determining current significance percentage Depositor
o Requesting required financial information (including Depositor
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
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
R-2
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 9: EXHIBITS
Distribution Date Statement to Certificateholders Securities Administrator
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
R-3
EXHIBIT S
ADDITIONAL FORM 10-K DISCLOSURE
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 1B: UNRESOLVED STAFF COMMENTS Depositor
ITEM 9B: OTHER INFORMATION Any party responsible for disclosure items on Form 8-K
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 SCHEDULES Securities Administrator
Depositor
REG AB ITEM 1112(b): SIGNIFICANT OBLIGORS OF POOL ASSETS
Significant Obligor Financial Information* Depositor
* 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.
REG AB ITEM 1114(b)(2): CREDIT ENHANCEMENT PROVIDER
FINANCIAL INFORMATION
o Determining applicable disclosure threshold Depositor
o Requesting required financial information (including Depositor
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.
REG AB ITEM 1115(b): DERIVATIVE COUNTERPARTY FINANCIAL
INFORMATION
o Determining current maximum probable exposure Depositor
o Determining current significance percentage Depositor
o Requesting required financial information (including Depositor
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.
S-1
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
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 governmental authorities:
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
o Depositor Depositor
o Trustee Trustee
o Securities Administrator Securities Administrator
o Master Servicer Master Servicer
o Custodian Custodian
o 1110(b) Originator Depositor
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
o Any other party contemplated by 1100(d)(1) Depositor
REG AB ITEM 1119: AFFILIATIONS AND RELATIONSHIPS
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to Depositor and Issuing Entity (a)
Entity is an affiliate of the following parties, and (b) Sponsor/Seller as to Sponsor/Seller (a)
to the extent known and material, any of the following
parties are affiliated with one another:
o Master Servicer Master Servicer
o Securities Administrator Securities Administrator
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor/Sponsor
o Any 1112(b) Significant Obligor Depositor/Sponsor
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
o Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any "outside the ordinary course Depositor as to Depositor and Issuing Entity (a)
business arrangements" other than would be obtained in an Sponsor/Seller as to Sponsor/Seller (a)
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
S-2
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
Certificates:
o Master Servicer Master Servicer
o Securities Administrator Securities Administrator
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor/Sponsor
o Any 1112(b) Significant Obligor Depositor/Sponsor
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
o Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any specific relationships involving Depositor as to Depositor and Issuing Entity
the transaction or the pool assets between (a) the Sponsor/Seller as to Sponsor/Seller
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:
o Master Servicer Master Servicer
o Securities Administrator Securities Administrator
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor/Sponsor
o Any 1112(b) Significant Obligor Depositor/Sponsor
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
o Any other 1101(d)(1) material party Depositor/Sponsor
S-3
EXHIBIT T
ADDITIONAL FORM 8-K DISCLOSURE
FORM 8-K DISCLOSURE INFORMATION
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 8-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 1.01- ENTRY INTO A MATERIAL DEFINITIVE All parties
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 DEFINITIVE AGREEMENT All parties
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:
o Sponsor (Seller) Sponsor (Seller)
o Depositor Depositor
o Master Servicer Master Servicer
o Affiliated Servicer Servicer
o Other Servicer servicing 20% or more of the Servicer
pool assets at the time of the report
o Other material servicers Servicer
o Trustee Trustee
o Securities Administrator Securities Administrator
o Significant Obligor Depositor
T-1
FORM 8-K DISCLOSURE INFORMATION
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ITEM ON FORM 8-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
o Derivative Counterparty Depositor
o Custodian Custodian
ITEM 2.04- TRIGGERING EVENTS THAT ACCELERATE OR INCREASE Depositor
A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION Master Servicer
UNDER AN OFF-BALANCE SHEET ARRANGEMENT Securities Administrator
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 Distribution Date
Statements to the certificateholders.
ITEM 3.03- MATERIAL MODIFICATION TO RIGHTS OF SECURITY Securities Administrator
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 INCORPORATION OR Depositor
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 COMPUTATIONAL MATERIAL Depositor
ITEM 6.02- CHANGE OF SERVICER OR SECURITIES ADMINISTRATOR Master Servicer/Securities Administrator/Depositor/
Servicer/Trustee (if change of the
Requires disclosure of any removal, replacement, Securities Administrator)
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 or master Servicer/Master Servicer/Depositor
servicer is also required.
Reg AB disclosure about any new Trustee is also required. Trustee
T-2
FORM 8-K DISCLOSURE INFORMATION
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ITEM ON FORM 8-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 6.03- CHANGE IN CREDIT ENHANCEMENT OR EXTERNAL Depositor/Securities Administrator
SUPPORT
Covers termination of any enhancement in 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 enhancement provider is Depositor
also required.
ITEM 6.04- FAILURE TO MAKE A REQUIRED DISTRIBUTION Securities Administrator
ITEM 6.05- SECURITIES ACT UPDATING DISCLOSURE Depositor
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 originators required to Depositor
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 All parties
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 EXHIBITS Responsible party for reporting/disclosing the
financial statement or exhibit
T-3
EXHIBIT U
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxx Fargo Bank, N.A. as Securities Administrator
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Attn: Corporate Trust Services - XXXXXXXXX MORTGAGE TRUST 2006-5-SEC REPORT
PROCESSING
RE: Additional Form [_] Disclosure Required
Ladies and Gentlemen:
In accordance with Section 3.19(a)(ii) of the Pooling and Servicing
Agreement dated as of August 1, 2006 by and among the Structured Asset Mortgage
Investments II Inc., as depositor, Xxxxxxxxx Mortgage Home Loans, Inc., as
seller, Xxxxx Fargo Bank, N.A., as master servicer and securities administrator,
the Wilmington Trust Company, as Delaware trustee and LaSalle Bank, National
Association, as trustee, the undersigned, as [_], hereby notifies you that
certain events have come to our attention that [will][may] need to be disclosed
on Form [10-D] [10-K] [8-K].
Description of Additional Form [10-D] [10-K] [8-K] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [_]
Disclosure:
Any inquiries related to this notification should be directed to [_],
phone number: [_]; email address: [_].
[NAME OF PARTY]
as [role]
By:
------------------------------------
Name:
Title:
U-1
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[To be retained in a separate closing binder entitled "Xxxxxxxxx 2006-5
Mortgage Loan Schedule" at the offices of Stroock & Stroock & Xxxxx LLP]
