EXHIBIT 4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
Depositor,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer, Securities Administrator, Servicer and Custodian,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
-------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2007
-------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. TRUST 2007-HE7
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-HE7
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee and the Custodians of the
Mortgage Loans..............................................
Section 2.03 Representations and Warranties; Remedies for
Breaches of Representations and Warranties with
Respect to the Mortgage Loans...............................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
Section 2.07 Enforcement of Obligations for Breach of Mortgage
Loan Representations........................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans..........................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicers...................................
Section 3.05 No Contractual Relationship between Subservicers,
the Master Servicer and the Trustee.........................
Section 3.06 Assumption or Termination of Subservicing
Agreements by Master Servicer...............................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.............................................
Section 3.10 Collection Accounts..........................................
Section 3.11 Withdrawals from the Collection Accounts.....................
Section 3.12 Investment of Funds in the Collection Accounts and
the Distribution Account....................................
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.............................
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements..................................................
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public
Accountants' Attestation Report.............................
Section 3.24 Master Servicer to Act as Servicer...........................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.....................
Section 3.27 Optional Purchase of Delinquent Mortgage Loans...............
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of
LIBOR.......................................................
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 Swap Account.................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and
Addresses...................................................
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers...................................................
Section 6.02 Merger or Consolidation of the Depositor or a
Servicer....................................................
Section 6.03 Limitation on Liability of the Depositor, the
Servicers and Others........................................
Section 6.04 Limitation on Resignation of a Servicer......................
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Master Servicer to Act; Appointment of Successor.............
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee and the
Custodians..................................................
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.......................................................
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts,
Basis Risk CarryForward Amounts and Class IO
Shortfalls; Tax Classification of the Excess
Reserve Fund Account, Swap Account and the
Interest Rate Swap Agreement................................
Section 8.14 Custodial Responsibilities...................................
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations......................................
Section 9.02 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.........................................
Section 9.03 Representations and Warranties of the Master
Servicer....................................................
Section 9.04 Master Servicer Events of Default............................
Section 9.05 Waiver of Default............................................
Section 9.06 Successor to the Master Servicer.............................
Section 9.07 Compensation of the Master Servicer..........................
Section 9.08 Merger or Consolidation......................................
Section 9.09 Resignation of the Master Servicer...........................
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer....................................................
Section 9.11 Limitation on Liability of the Master Servicer...............
Section 9.12 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities
Administrator...............................................
Section 10.03 Securities Administrator Not Liable for
Certificates or Mortgage Loans..............................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities
Administrator...............................................
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the
Securities Administrator....................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans..............................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Assignment; Sales; Advance Facilities........................
Section 12.08 Limitation on Rights of Certificateholders...................
Section 12.09 Inspection and Audit Rights..................................
Section 12.10 Certificates Nonassessable and Fully Paid....................
Section 12.11 Rule of Construction.........................................
Section 12.12 Waiver of Jury Trial.........................................
Section 12.13 Rights of the Third Parties..................................
Section 12.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness..............................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Saxon, as Servicer
Schedule II-A Further Representations and Warranties of Saxon
Schedule III Representations and Warranties of the Depositor as to the
Mortgage Loans
Schedule IV Representations and Warranties of ▇▇▇▇▇ Fargo Servicer, as
Servicer
Schedule V Representations and Warranties of Countrywide Servicing, as
Servicer
Schedule VI Representations and Warranties of ▇▇▇▇▇ Fargo, as Custodian
Schedule VII Representations and Warranties of LaSalle, as Custodian
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C-1 Form of Class R Certificate
Exhibit C-2 Form of Class RX Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of [Custodian] [Trustee]
Exhibit F Form of Document Certification and Exception Report of
[Custodian] [Trustee]
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Annual Certification to be provided to the Master
Servicer
Exhibit N [Reserved]
Exhibit O Accredited Agreements
Exhibit P Form of Servicer Power of Attorney
Exhibit Q Servicing Criteria - To Be Addressed in Assessment of
Compliance
Exhibit R Additional Form 10-D Disclosure
Exhibit S Additional Form 10-K Disclosure
Exhibit T Form 8-K Disclosure Information
Exhibit U Interest Rate Swap Agreement
Exhibit V Form of Additional Disclosure Notification
Exhibit W Form of Saxon Servicer Reports
Exhibit X Form of Countrywide Servicing Servicer Reports
Exhibit Y Form of ▇▇▇▇▇ Fargo Servicer Reports
Exhibit Z Saxon Standard File Layout - Delinquency Reporting
Exhibit ▇▇ ▇▇▇▇▇ Fargo Servicer Standard File Layout - Delinquency
Reporting
Exhibit BB Countrywide Servicing Standard File Layout - Delinquency
Reporting
Exhibit CC Countrywide Amendment Regulation AB
Exhibit DD Representations and Warranties Agreement
Exhibit EE Interest Rate Cap Agreement
Exhibit FF Monthly Loan Level Data File to be Delivered to ▇▇▇▇▇'▇
THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), SAXON MORTGAGE SERVICES, INC., a Texas corporation, as a
servicer ("Saxon"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer"), as
securities administrator (in such capacity, the "Securities Administrator"), as
a servicer (in such capacity, "▇▇▇▇▇ Fargo Servicer") and as a custodian ("▇▇▇▇▇
Fargo"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as a
servicer ("Countrywide Servicing" and together with Saxon and ▇▇▇▇▇ Fargo
Servicer, the "Servicers"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national
banking association, as trustee (the "Trustee") and LASALLE BANK NATIONAL
ASSOCIATION, as a custodian ("LaSalle" and, together with ▇▇▇▇▇ Fargo in its
capacity as a custodian, the "Custodians").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator, on behalf of the Trustee, shall elect
that five segregated asset pools within the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets and the Interest Rate Cap Agreement,
(iii) the Excess Reserve Fund Account, and (iv) the right of the Offered
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls) be treated for federal income tax purposes as comprising five REMICs
(Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC, the
Upper-Tier REMIC and the Class X REMIC, respectively, and each, a "Trust
REMIC"). The Class X Interest, the Class IO Interest and each Class of Offered
Certificates (other than the right of each Class of Offered Certificates to
receive Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts and the obligation to pay Class IO Shortfalls) represents
ownership of a regular interest in a REMIC for purposes of the REMIC Provisions.
The Class R Certificates represent ownership of the sole class of residual
interest in each of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier
REMIC and the Upper-Tier REMIC for purposes of the REMIC Provisions. The Class
RX Certificates represent ownership of the sole class of residual interest in
the Class X REMIC for purposes of the REMIC provisions. The Startup Day for each
Trust REMIC described herein is the date referenced in Section 2.05. The latest
possible maturity date for each regular interest is the latest date referenced
in Section 2.05. The Class X REMIC shall hold as assets the Class UT-X Interest
and the Class UT-IO Interest as set out below. The Upper-Tier REMIC shall hold
as assets the several classes of uncertificated Lower-Tier Regular Interests,
set out below. The Lower-Tier REMIC shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-2 Regular Interests. Pooling-Tier REMIC-2
shall hold as assets the several classes of uncertificated Pooling-Tier REMIC-1
Regular Interests. Pooling-Tier REMIC-1 shall hold as assets the assets of the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap Assets and
the Interest Rate Cap Agreement, (iii) the Excess Reserve Fund Account, and (iv)
the right of the Offered Certificates to receive Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts and the obligation to
pay Class IO Shortfalls).
For federal income tax purposes, each Class of Offered Certificates
represents a beneficial ownership of a regular interest in the Upper-Tier REMIC,
the right to receive Basis Risk CarryForward Amounts and without duplication,
Upper-Tier CarryForward Amounts, and the obligation to pay Class IO Shortfalls;
the Class X Certificates represent beneficial ownership of the Class X Interest,
the Class IO Interest, the Interest Rate Swap Agreement, the Swap Account, the
Interest Rate Cap Agreement, the Excess Reserve Fund Account and the right to
receive Class IO Shortfalls, subject to the obligation to pay Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts;
and the Class P Certificates represent beneficial ownership of the Prepayment
Premiums, which portions of the Trust Fund shall be treated as a grantor trust
under subpart E, Part I of subchapter J of the Code (the "Grantor Trust").
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Pooling-Tier Initial Pooling
Pooling-Tier REMIC-1 Tier REMIC-1
REMIC-1 Interest Interest Rate Principal Amount
----------------- ------------- ----------------
Class PT1-I-1 (1) $489,376,597.48
Class PT1-I-2A (2) $ 12,986,420.08
Class PT1-I-2B (3) $ 12,986,420.08
Class PT1-I-3A (2) $ 12,407,509.93
Class PT1-I-3B (3) $ 12,407,509.93
Class PT1-I-4A (2) $ 11,845,320.29
Class PT1-I-4B (3) $ 11,845,320.29
Class PT1-I-5A (2) $ 11,863,647.14
Class PT1-I-5B (3) $ 11,863,647.14
Class PT1-I-6A (2) $ 19,763,381.14
Class PT1-I-6B (3) $ 19,763,381.14
Class PT1-I-7A (2) $ 39,338,244.56
Class PT1-I-7B (3) $ 39,338,244.56
Class PT1-I-8A (2) $ 9,161,742.28
Class PT1-I-8B (3) $ 9,161,742.28
Class PT1-I-9A (2) $ 9,306,553.79
Class PT1-I-9B (3) $ 9,306,553.79
Class PT1-I-10A (2) $ 8,242,719.72
Class PT1-I-10B (3) $ 8,242,719.72
Class PT1-I-11A (2) $ 7,635,480.69
Class PT1-I-11B (3) $ 7,635,480.69
Class PT1-I-12A (2) $ 15,840,135.24
Class PT1-I-12B (3) $ 15,840,135.24
Class PT1-I-13A (2) $ 35,836,381.73
Class PT1-I-13B (3) $ 35,836,381.73
Class PT1-I-14A (2) $ 5,521,360.62
Class PT1-I-14B (3) $ 5,521,360.62
Class PT1-I-15A (2) $ 5,777,139.07
Class PT1-I-15B (3) $ 5,777,139.07
Class PT1-I-16A (2) $ 4,841,842.61
Class PT1-I-16B (3) $ 4,841,842.61
Class PT1-I-17A (2) $ 4,539,657.49
Class PT1-I-17B (3) $ 4,539,657.49
Class PT1-I-18A (2) $ 9,377,554.14
Class PT1-I-18B (3) $ 9,377,554.14
Class PT1-I-19A (2) $ 23,902,783.99
Class PT1-I-19B (3) $ 23,902,783.99
Class PT1-I-20A (2) $ 5,350,400.11
Class PT1-I-20B (3) $ 5,350,400.11
Class PT1-I-21A (2) $ 4,516,529.42
Class PT1-I-21B (3) $ 4,516,529.42
Class PT1-I-22A (2) $ 2,418,236.86
Class PT1-I-22B (3) $ 2,418,236.86
Class PT1-I-23A (2) $ 2,086,637.05
Class PT1-I-23B (3) $ 2,086,637.05
Class PT1-I-24A (2) $ 2,163,443.76
Class PT1-I-24B (3) $ 2,163,443.76
Class PT1-I-25A (2) $ 5,273,998.96
Class PT1-I-25B (3) $ 5,273,998.96
Class PT1-I-26A (2) $ 3,912,246.50
Class PT1-I-26B (3) $ 3,912,246.50
Class PT1-I-27A (2) $ 2,865,891.84
Class PT1-I-27B (3) $ 2,865,891.84
Class PT1-I-28A (2) $ 1,198,021.71
Class PT1-I-28B (3) $ 1,198,021.71
Class PT1-I-29A (2) $ 1,198,290.78
Class PT1-I-29B (3) $ 1,198,290.78
Class PT1-I-30A (2) $ 1,245,828.25
Class PT1-I-30B (3) $ 1,245,828.25
Class PT1-I-31A (2) $ 3,021,602.27
Class PT1-I-31B (3) $ 3,021,602.27
Class PT1-I-32A (2) $ 2,227,221.16
Class PT1-I-32B (3) $ 2,227,221.16
Class PT1-I-33A (2) $ 1,641,980.56
Class PT1-I-33B (3) $ 1,641,980.56
Class PT1-I-34A (2) $ 704,666.94
Class PT1-I-34B (3) $ 704,666.94
Class PT1-I-35A (2) $ 574,276.01
Class PT1-I-35B (3) $ 574,276.01
Class PT1-I-36A (2) $ 555,669.24
Class PT1-I-36B (3) $ 555,669.24
Class PT1-I-37A (2) $ 538,839.13
Class PT1-I-37B (3) $ 538,839.13
Class PT1-I-38A (2) $ 522,528.67
Class PT1-I-38B (3) $ 522,528.67
Class PT1-I-39A (2) $ 506,615.89
Class PT1-I-39B (3) $ 506,615.89
Class PT1-I-40A (2) $ 491,150.85
Class PT1-I-40B (3) $ 491,150.85
Class PT1-I-41A (2) $ 476,771.39
Class PT1-I-41B (3) $ 476,771.39
Class PT1-I-42A (2) $ 462,104.20
Class PT1-I-42B (3) $ 462,104.20
Class PT1-I-43A (2) $ 447,725.75
Class PT1-I-43B (3) $ 447,725.75
Class PT1-I-44A (2) $ 433,857.35
Class PT1-I-44B (3) $ 433,857.35
Class PT1-I-45A (2) $ 12,994,885.61
Class PT1-I-45B (3) $ 12,994,885.61
Class PT1-R (4) (4)
Class PT1-I-1 (1) $204,114,126.78
Class PT1-II-2A (5) $ 5,416,507.06
Class PT1-II-2B (6) $ 5,416,507.06
Class PT1-II-3A (5) $ 5,175,049.37
Class PT1-II-3B (6) $ 5,175,049.37
Class PT1-II-4A (5) $ 4,940,565.65
Class PT1-II-4B (6) $ 4,940,565.65
Class PT1-II-5A (5) $ 4,948,209.60
Class PT1-II-5B (6) $ 4,948,209.60
Class PT1-II-6A (5) $ 8,243,110.33
Class PT1-II-6B (6) $ 8,243,110.33
Class PT1-II-7A (5) $ 16,407,591.78
Class PT1-II-7B (6) $ 16,407,591.78
Class PT1-II-8A (5) $ 3,821,271.87
Class PT1-II-8B (6) $ 3,821,271.87
Class PT1-II-9A (5) $ 3,881,671.31
Class PT1-II-9B (6) $ 3,881,671.31
Class PT1-II-10A (5) $ 3,437,956.67
Class PT1-II-10B (6) $ 3,437,956.67
Class PT1-II-11A (5) $ 3,184,683.29
Class PT1-II-11B (6) $ 3,184,683.29
Class PT1-II-12A (5) $ 6,606,763.36
Class PT1-II-12B (6) $ 6,606,763.36
Class PT1-II-13A (5) $ 14,946,999.51
Class PT1-II-13B (6) $ 14,946,999.51
Class PT1-II-14A (5) $ 2,302,904.77
Class PT1-II-14B (6) $ 2,302,904.77
Class PT1-II-15A (5) $ 2,409,587.43
Class PT1-II-15B (6) $ 2,409,587.43
Class PT1-II-16A (5) $ 2,019,484.55
Class PT1-II-16B (6) $ 2,019,484.55
Class PT1-II-17A (5) $ 1,893,446.13
Class PT1-II-17B (6) $ 1,893,446.13
Class PT1-II-18A (5) $ 3,911,284.86
Class PT1-II-18B (6) $ 3,911,284.86
Class PT1-II-19A (5) $ 9,969,614.21
Class PT1-II-19B (6) $ 9,969,614.21
Class PT1-II-20A (5) $ 2,231,598.84
Class PT1-II-20B (6) $ 2,231,598.84
Class PT1-II-21A (5) $ 1,883,799.64
Class PT1-II-21B (6) $ 1,883,799.64
Class PT1-II-22A (5) $ 1,008,622.62
Class PT1-II-22B (6) $ 1,008,622.62
Class PT1-II-23A (5) $ 870,315.63
Class PT1-II-23B (6) $ 870,315.63
Class PT1-II-24A (5) $ 902,350.94
Class PT1-II-24B (6) $ 902,350.94
Class PT1-II-25A (5) $ 2,199,732.67
Class PT1-II-25B (6) $ 2,199,732.67
Class PT1-II-26A (5) $ 1,631,759.23
Class PT1-II-26B (6) $ 1,631,759.23
Class PT1-II-27A (5) $ 1,195,335.07
Class PT1-II-27B (6) $ 1,195,335.07
Class PT1-II-28A (5) $ 499,682.98
Class PT1-II-28B (6) $ 499,682.98
Class PT1-II-29A (5) $ 499,795.20
Class PT1-II-29B (6) $ 499,795.20
Class PT1-II-30A (5) $ 519,622.61
Class PT1-II-30B (6) $ 519,622.61
Class PT1-II-31A (5) $ 1,260,280.35
Class PT1-II-31B (6) $ 1,260,280.35
Class PT1-II-32A (5) $ 928,951.87
Class PT1-II-32B (6) $ 928,951.87
Class PT1-II-33A (5) $ 684,853.81
Class PT1-II-33B (6) $ 684,853.81
Class PT1-II-34A (5) $ 293,909.60
Class PT1-II-34B (6) $ 293,909.60
Class PT1-II-35A (5) $ 239,524.83
Class PT1-II-35B (6) $ 239,524.83
Class PT1-II-36A (5) $ 231,764.13
Class PT1-II-36B (6) $ 231,764.13
Class PT1-II-37A (5) $ 224,744.46
Class PT1-II-37B (6) $ 224,744.46
Class PT1-II-38A (5) $ 217,941.53
Class PT1-II-38B (6) $ 217,941.53
Class PT1-II-39A (5) $ 211,304.47
Class PT1-II-39B (6) $ 211,304.47
Class PT1-II-40A (5) $ 204,854.15
Class PT1-II-40B (6) $ 204,854.15
Class PT1-II-41A (5) $ 198,856.62
Class PT1-II-41B (6) $ 198,856.62
Class PT1-II-42A (5) $ 192,739.08
Class PT1-II-42B (6) $ 192,739.08
Class PT1-II-43A (5) $ 186,741.97
Class PT1-II-43B (6) $ 186,741.97
Class PT1-II-44A (5) $ 180,957.60
Class PT1-II-44B (6) $ 180,957.60
Class PT1-II-45A (5) $ 5,420,037.95
Class PT1-II-45B (6) $ 5,420,037.95
Class PT1-R (7) (7)
-----------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per-annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per-annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to
a maximum rate of 9.20%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per-annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group I WAC Rate over (B) 9.20%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate subject to
a maximum rate of 9.20%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group II WAC Rate over (B) 9.20%.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be deemed to be distributed to the Pooling-Tier REMIC-1 Regular Interests at the
rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group I
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group II
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
Corresponding
Pooling-Tier Pooling-Tier Corresponding Corresponding Scheduled
Pooling-Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling-Tier REMIC-2 Pooling-Tier REMIC-1 Crossover
Interest Interest Rate Principal Amount IO Interest Regular Interest Distribution Date
-------------------- ------------- ------------------ -------------------- -------------------- -----------------
Class PT2-I-1 (1) $ 489,376,597.48 N/A N/A N/A
Class PT2-I-2A (2) $ 12,986,420.08 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 12,986,420.08 N/A N/A N/A
Class PT2-I-3A (2) $ 12,407,509.93 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 12,407,509.93 N/A N/A N/A
Class PT2-I-4A (2) $ 11,845,320.29 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 11,845,320.29 N/A N/A N/A
Class PT2-I-5A (2) $ 11,863,647.14 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 11,863,647.14 N/A N/A N/A
Class PT2-I-6A (2) $ 19,763,381.14 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 19,763,381.14 N/A N/A N/A
Class PT2-I-7A (2) $ 39,338,244.56 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 39,338,244.56 N/A N/A N/A
Class PT2-I-8A (2) $ 9,161,742.28 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 9,161,742.28 N/A N/A N/A
Class PT2-I-9A (2) $ 9,306,553.79 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 9,306,553.79 N/A N/A N/A
Class PT2-I-10A (2) $ 8,242,719.72 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 8,242,719.72 N/A N/A N/A
Class PT2-I-11A (2) $ 7,635,480.69 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 7,635,480.69 N/A N/A N/A
Class PT2-I-12A (2) $ 15,840,135.24 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 15,840,135.24 N/A N/A N/A
Class PT2-I-13A (2) $ 35,836,381.73 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 35,836,381.73 N/A N/A N/A
Class PT2-I-14A (2) $ 5,521,360.62 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 5,521,360.62 N/A N/A N/A
Class PT2-I-15A (2) $ 5,777,139.07 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 5,777,139.07 N/A N/A N/A
Class PT2-I-16A (2) $ 4,841,842.61 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 4,841,842.61 N/A N/A N/A
Class PT2-I-17A (2) $ 4,539,657.49 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 4,539,657.49 N/A N/A N/A
Class PT2-I-18A (2) $ 9,377,554.14 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 9,377,554.14 N/A N/A N/A
Class PT2-I-19A (2) $ 23,902,783.99 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 23,902,783.99 N/A N/A N/A
Class PT2-I-20A (2) $ 5,350,400.11 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 5,350,400.11 N/A N/A N/A
Class PT2-I-21A (2) $ 4,516,529.42 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 4,516,529.42 N/A N/A N/A
Class PT2-I-22A (2) $ 2,418,236.86 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 2,418,236.86 N/A N/A N/A
Class PT2-I-23A (2) $ 2,086,637.05 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 2,086,637.05 N/A N/A N/A
Class PT2-I-24A (2) $ 2,163,443.76 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 2,163,443.76 N/A N/A N/A
Class PT2-I-25A (2) $ 5,273,998.96 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 5,273,998.96 N/A N/A N/A
Class PT2-I-26A (2) $ 3,912,246.50 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 3,912,246.50 N/A N/A N/A
Class PT2-I-27A (2) $ 2,865,891.84 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 2,865,891.84 N/A N/A N/A
Class PT2-I-28A (2) $ 1,198,021.71 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 1,198,021.71 N/A N/A N/A
Class PT2-I-29A (2) $ 1,198,290.78 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 1,198,290.78 N/A N/A N/A
Class PT2-I-30A (2) $ 1,245,828.25 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 1,245,828.25 N/A N/A N/A
Class PT2-I-31A (2) $ 3,021,602.27 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 3,021,602.27 N/A N/A N/A
Class PT2-I-32A (2) $ 2,227,221.16 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 2,227,221.16 N/A N/A N/A
Class PT2-I-33A (2) $ 1,641,980.56 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 1,641,980.56 N/A N/A N/A
Class PT2-I-34A (2) $ 704,666.94 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 704,666.94 N/A N/A N/A
Class PT2-I-35A (2) $ 574,276.01 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 574,276.01 N/A N/A N/A
Class PT2-I-36A (2) $ 555,669.24 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 555,669.24 N/A N/A N/A
Class PT2-I-37A (2) $ 538,839.13 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 538,839.13 N/A N/A N/A
Class PT2-I-38A (2) $ 522,528.67 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 522,528.67 N/A N/A N/A
Class PT2-I-39A (2) $ 506,615.89 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 506,615.89 N/A N/A N/A
Class PT2-I-40A (2) $ 491,150.85 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 491,150.85 N/A N/A N/A
Class PT2-I-41A (2) $ 476,771.39 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 476,771.39 N/A N/A N/A
Class PT2-I-42A (2) $ 462,104.20 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 462,104.20 N/A N/A N/A
Class PT2-I-43A (2) $ 447,725.75 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 447,725.75 N/A N/A N/A
Class PT2-I-44A (2) $ 433,857.35 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 433,857.35 N/A N/A N/A
Class PT2-I-45A (2) $ 12,994,885.61 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 12,994,885.61 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A September 2008
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A October 2008
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A November 2008
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A December 2008
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A January 2009
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A February 2009
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A March 2009
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A April 2009
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A May 2009
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A June 2009
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A July 2009
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A August 2009
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A September 2009
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A October 2009
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A November 2009
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A December 2009
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A January 2010
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A February 2010
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A March 2010
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A April 2010
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A May 2010
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A June 2010
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A July 2010
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A August 2010
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A September 2010
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A October 2010
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A November 2010
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A December 2010
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A January 2011
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A February 2011
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A March 2011
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A April 2011
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A May 2011
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A June 2011
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A July 2011
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A August 2011
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A September 2011
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A October 2011
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A November 2011
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A December 2011
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A January 2012
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A February 2012
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A March 2012
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A April 2012
Class PT2-II-1 (5) $ 204,114,126.78 N/A N/A N/A
Class PT2-II-2A (6) $ 5,416,507.06 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 5,416,507.06 N/A N/A N/A
Class PT2-II-3A (6) $ 5,175,049.37 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 5,175,049.37 N/A N/A N/A
Class PT2-II-4A (6) $ 4,940,565.65 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 4,940,565.65 N/A N/A N/A
Class PT2-II-5A (6) $ 4,948,209.60 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 4,948,209.60 N/A N/A N/A
Class PT2-II-6A (6) $ 8,243,110.33 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 8,243,110.33 N/A N/A N/A
Class PT2-II-7A (6) $ 16,407,591.78 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 16,407,591.78 N/A N/A N/A
Class PT2-II-8A (6) $ 3,821,271.87 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 3,821,271.87 N/A N/A N/A
Class PT2-II-9A (6) $ 3,881,671.31 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 3,881,671.31 N/A N/A N/A
Class PT2-II-10A (6) $ 3,437,956.67 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 3,437,956.67 N/A N/A N/A
Class PT2-II-11A (6) $ 3,184,683.29 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 3,184,683.29 N/A N/A N/A
Class PT2-II-12A (6) $ 6,606,763.36 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 6,606,763.36 N/A N/A N/A
Class PT2-II-13A (6) $ 14,946,999.51 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 14,946,999.51 N/A N/A N/A
Class PT2-II-14A (6) $ 2,302,904.77 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 2,302,904.77 N/A N/A N/A
Class PT2-II-15A (6) $ 2,409,587.43 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 2,409,587.43 N/A N/A N/A
Class PT2-II-16A (6) $ 2,019,484.55 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 2,019,484.55 N/A N/A N/A
Class PT2-II-17A (6) $ 1,893,446.13 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 1,893,446.13 N/A N/A N/A
Class PT2-II-18A (6) $ 3,911,284.86 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 3,911,284.86 N/A N/A N/A
Class PT2-II-19A (6) $ 9,969,614.21 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 9,969,614.21 N/A N/A N/A
Class PT2-II-20A (6) $ 2,231,598.84 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 2,231,598.84 N/A N/A N/A
Class PT2-II-21A (6) $ 1,883,799.64 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 1,883,799.64 N/A N/A N/A
Class PT2-II-22A (6) $ 1,008,622.62 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 1,008,622.62 N/A N/A N/A
Class PT2-II-23A (6) $ 870,315.63 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 870,315.63 N/A N/A N/A
Class PT2-II-24A (6) $ 902,350.94 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 902,350.94 N/A N/A N/A
Class PT2-II-25A (6) $ 2,199,732.67 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 2,199,732.67 N/A N/A N/A
Class PT2-II-26A (6) $ 1,631,759.23 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 1,631,759.23 N/A N/A N/A
Class PT2-II-27A (6) $ 1,195,335.07 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 1,195,335.07 N/A N/A N/A
Class PT2-II-28A (6) $ 499,682.98 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 499,682.98 N/A N/A N/A
Class PT2-II-29A (6) $ 499,795.20 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 499,795.20 N/A N/A N/A
Class PT2-II-30A (6) $ 519,622.61 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 519,622.61 N/A N/A N/A
Class PT2-II-31A (6) $ 1,260,280.35 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 1,260,280.35 N/A N/A N/A
Class PT2-II-32A (6) $ 928,951.87 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 928,951.87 N/A N/A N/A
Class PT2-II-33A (6) $ 684,853.81 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 684,853.81 N/A N/A N/A
Class PT2-II-34A (6) $ 293,909.60 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 293,909.60 N/A N/A N/A
Class PT2-II-35A (6) $ 239,524.83 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 239,524.83 N/A N/A N/A
Class PT2-II-36A (6) $ 231,764.13 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 231,764.13 N/A N/A N/A
Class PT2-II-37A (6) $ 224,744.46 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 224,744.46 N/A N/A N/A
Class PT2-II-38A (6) $ 217,941.53 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 217,941.53 N/A N/A N/A
Class PT2-II-39A (6) $ 211,304.47 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 211,304.47 N/A N/A N/A
Class PT2-II-40A (6) $ 204,854.15 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 204,854.15 N/A N/A N/A
Class PT2-II-41A (6) $ 198,856.62 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 198,856.62 N/A N/A N/A
Class PT2-II-42A (6) $ 192,739.08 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 192,739.08 N/A N/A N/A
Class PT2-II-43A (6) $ 186,741.97 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 186,741.97 N/A N/A N/A
Class PT2-II-44A (6) $ 180,957.60 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 180,957.60 N/A N/A N/A
Class PT2-II-45A (6) $ 5,420,037.95 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 5,420,037.95 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A September 2008
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A October 2008
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A November 2008
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A December 2008
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A January 2009
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A February 2009
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A March 2009
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A April 2009
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A May 2009
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A June 2009
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A July 2009
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A August 2009
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A September 2009
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A October 2009
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A November 2009
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A December 2009
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A January 2010
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A February 2010
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A March 2010
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A April 2010
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A May 2010
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A June 2010
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A July 2010
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A August 2010
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A September 2010
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A October 2010
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A November 2010
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A December 2010
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A January 2011
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A February 2011
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A March 2011
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A April 2011
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A May 2011
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A June 2011
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A July 2011
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A August 2011
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A September 2011
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A October 2011
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A November 2011
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A December 2011
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A January 2012
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A February 2012
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A March 2012
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A April 2012
Class PT2-R (8) (8) N/A N/A N/A
------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per-annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest (which, for the avoidance of doubt, shall not include any
Distribution Date prior to the Distribution Date in April 2008), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate equal to Swap LIBOR subject to a maximum rate equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in
their class designation.
(4) This Pooling-Tier REMIC-2 IO Interest is an interest-only interest and
does not have a principal balance but has a notional balance
("Pooling-Tier REMIC-2 IO Notional Balance") equal to the Pooling-Tier
REMIC-2 Principal Amount of the Corresponding Pooling-Tier REMIC-1 Regular
Interest. From the Closing Date through and including the Distribution
Date in August 2008, this Pooling-Tier REMIC-2 IO Interest shall be
entitled to receive interest that accrues on the Corresponding
Pooling-Tier REMIC-1 Regular Interest at a rate equal to the excess, if
any, of (i) the Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier REMIC-1 Regular Interest over (ii) the Pooling Tier REMIC-1
Interest Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest.
From and including the Distribution Date in September 2008 through and
including the Corresponding Actual Crossover Distribution Date, this
Pooling-Tier REMIC-2 IO Interest shall be entitled to receive interest
that accrues on the Corresponding Pooling-Tier REMIC-1 Regular Interest at
a rate equal to the excess, if any, of (i) the Pooling-Tier REMIC-1
Interest Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest
over (ii) Swap LIBOR. After the Corresponding Actual Crossover
Distribution Date, this Pooling-Tier REMIC-2 IO Interest shall not accrue
interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling-Tier REMIC-2 IO Interest, this Pooling-Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the
Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier REMIC-1 Regular
Interests relating to Loan Group II and having an "A" in their class
designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be distributed to the Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier
REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to the Group I Mortgage Loans with the lowest
numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of such
interest is reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular
Interests relating to the Group I Mortgage Loans with the same numerical
denomination, such Realized Losses, Subsequent Recoveries and payments of
principal shall be allocated pro rata between such Pooling-Tier REMIC-2 Regular
Interests, until the Pooling-Tier REMIC-2 Principal Amount of such interests is
reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to Loan Group II with the lowest numerical
denomination until the Pooling-Tier REMIC-2 Principal Amount of such interest is
reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular Interests
relating to the Group II Mortgage Loans with the same numerical denomination,
such Realized Losses and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-2 Regular Interests, until the Pooling-Tier
REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and each
such interest, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Lower-Tier Upper-Tier
Lower-Tier Interest Initial Lower-Tier REMIC Regular
REMIC Interest Rate Principal Amount Interest
----------------- ---------- ----------------------------- -------------
Class LT-A-1 (1) 1/2 initial Class Certificate A-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate A-2a
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate A-2b
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate A-2c
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate M-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate M-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate M-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate M-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate M-5
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate B-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate B-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate B-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal N/A
Balance plus 1/2 Subordinated
Amount, less the aggregate
initial Lower-Tier Principal
Amount of Class LT-Group I
and Class LT-Group II
Class LT-Group I (2) 0.001% aggregate Stated
Principal Balance of Group I
Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated
Principal Balance of
Group II Mortgage Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per-annum variable rate equal to the weighted average of
the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4,
Class LT-M-5, Class LT-B-1, Class LT-B-2 and Class LT-B-3 Interests are hereby
designated the LT Accretion Directed Classes (the "LT Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal Amount of the
LT Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
shall be accrued and added to the Lower-Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans (including, for the first Distribution Date only, the Closing
Date Deposit Amount) and all Subsequent Recoveries allocable to principal shall
be allocated (i) 50% to the Class LT-Accrual Interest, the Class LT-Group I
Interest and Class LT-Group II Interest (and further allocated among these
Lower-Tier Regular Interests in the manner described below) and (ii) 50% to the
LT Accretion Directed Classes (such principal payments and Subsequent Recoveries
shall be allocated among such LT Accretion Directed Classes in an amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Subordinated Amount shall be allocated to the Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so that after
all distributions have been made on each Distribution Date (i) the Lower-Tier
Principal Amount of each of the LT-Accretion Directed Classes is equal to 50% of
the Class Certificate Balance of their Corresponding Class, and (ii) the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) is equal to 50% of the aggregate Stated Principal
Balance of the Mortgage Loans plus 50% of the Subordinated Amount. Any increase
in the Class Certificate Balance of a Class of Offered Certificates as a result
of a Subsequent Recovery shall increase the Lower-Tier Principal Amount of the
Corresponding Lower-Tier Regular Interest by 50% of such increase, and the
remaining 50% of such increase shall increase the Lower-Tier Principal Amount of
the Class LT-Accrual Interest, the Class LT-Group I Interest and the Class
LT-Group II Interest (such increase shall be further allocated among such
Lower-Tier Regular Interests in the manner described below). As among the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, all Subsequent Recoveries and all Realized
Losses, allocable to such Lower-Tier Regular Interests and all increases in the
Lower-Tier Principal Amount of such Lower-Tier Regular Interests as a result of
Subsequent Recoveries shall be allocated (i) to the Class LT-Group I Interest
and the Class LT-Group II Interest, each from the related Loan Group so that
their respective Lower-Tier Principal Amounts (computed to at least eight
decimal places) are equal to 0.001% of the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group and (ii) the remainder to the Class
LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and each
such interest, other than the Class UT-R Interest, is hereby designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier Upper-Tier Initial Principal Class of
REMIC Interest Interest Rate Upper-Tier Amount Certificates
-------------- ------------- ----------------- -------------
Class A-1 (1) $670,205,000 Class A-1
Class A-2a (2) $181,345,000 Class A-2a
Class A-2b (2) $ 52,485,000 Class A-2b
Class A-2c (2) $ 45,710,000 Class A-2c
Class M-1 (3) $ 24,192,000 Class M-1
Class M-2 (3) $135,790,000 Class M-2
Class M-3 (3) $ 24,192,000 Class M-3
Class M-4 (3) $ 99,111,000 Class M-4
Class M-5 (3) $ 36,679,000 Class M-5
Class B-1 (3) $ 31,996,000 Class B-1
Class B-2 (3) $ 36,679,000 Class B-2
Class B-3 (3) $ 38,240,000 Class B-3
Class UT-IO (4) (2) N/A
Class UT-X (5) (5) N/A
Class UT-R (6) (6) Class R
------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO
Interest. This interest shall be beneficially owned by the holders of the
Class X Certificates and shall be held as an asset of the Swap Account.
(5) The Class UT-X Interest has an initial principal balance of
$184,174,872.90 but will not accrue interest on such balance but will
accrue interest on a notional principal balance. As of any Distribution
Date, the Class UT-X Interest shall have a notional principal balance
equal to the aggregate of the Lower-Tier Principal Amounts of the
Lower-Tier Regular Interests (other than the Class LT-IO Interest) as of
the first day of the related Interest Accrual Period. With respect to any
Interest Accrual Period, the Class X Interest shall bear interest at a
rate equal to the excess, if any, of the Upper-Tier REMIC WAC Rate over
the product of (i) 2 and (ii) the weighted average of the Lower-Tier
Interest Rates of the Lower-Tier REMIC Interests (other than the Class
LT-IO Interest), where the Lower-Tier Interest Rate on each of the Class
LT-Accrual Interest, Class LT-Group I Interest and Class LT-Group II
Interest is subject to a cap equal to zero and each LT-Accretion Directed
Class is subject to a cap equal to the Upper-Tier Interest Rate on its
Corresponding Class of Upper-Tier Regular Interest. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class UT-X Interest shall be deferred in an amount equal to
any increase in the Subordinated Amount on such Distribution Date. Such
deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of the
Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Class X REMIC
The Class X REMIC shall issue the following classes of interests.
The Class X Interest and the Class IO Interest shall each represent a regular
interest in the Class X REMIC and the Class RX Certificates shall represent the
sole class of residual interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
------------------------- ------------- ----------------
Class X Interest (1) (1)
Class IO Interest (2) (2)
Class RX Certificates (3) (3)
------------
(1) The Class X Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to 100% of
the interest and principal on the Class UT-X Interest on each Distribution
Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class RX Certificates do not have a principal balance or an interest
rate.
The Certificates
Class
Pass-Through Class
Class Designation Rate Certificate Balance
----------------- ------------ -------------------
Class A-1(10) (1) $670,205,000
Class A-2a(10) (2) $181,345,000
Class A-2b(10) (3) $52,485,000
Class A-2c(10) (4) $45,710,000
Class M-1(6) (5) $24,192,000
Class M-2(6) (5) $135,790,000
Class M-3(6) (5) $24,192,000
Class M-4(6) (5) $99,111,000
Class M-5(6) (5) $36,679,000
Class B-1(6) (5) $31,996,000
Class B-2(6) (5) $36,679,000
Class B-3(6) (5) $38,240,000
Class X (6) (6)
Class R (7) (7)
Class RX (8) (8)
------------
(1) The Class A-1 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the
WAC Cap.
(2) The Class A-2a Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) The Class A-2b Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-2c Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(5) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1,
Class B-2 and Class B-3 Certificates will bear interest during each
Interest Accrual Period at a per annum rate equal to the lesser of (i)
LIBOR plus the applicable Pass-Through Margin, and (ii) the WAC Cap.
(6) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Interest Rate Cap Agreement, the right to receive Class IO Shortfalls and
amounts in the Excess Reserve Fund Account and the Swap Account, subject
to the obligation to make payments from the Excess Reserve Fund Account in
respect of Basis Risk CarryForward Amounts and amounts in the Swap Account
subject to the obligation to make Net Swap Payments, Swap Termination
Payments, Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts. For federal income tax purposes, the
Securities Administrator will treat a Class X Certificateholder's
obligation to make payments from the Excess Reserve Fund Account or the
Swap Account as payments made under a notional principal contract between
the Class X Certificateholders and the holder of each Class of Offered
Certificates. Such rights of the Class X Certificateholders and Offered
Certificateholders shall be treated as held in the Grantor Trust.
(7) The Class R Certificates do not have an interest rate or a principal
balance.
(8) The Class RX Certificates do not have an interest rate or a principal
balance.
(10) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts. Each of these Certificates
will also be subject to the obligation to pay Class IO Shortfalls as
described in Section 8.13. For federal income tax purposes, any amount
distributed on the Offered Certificates on any such Distribution Date in
excess of the amount distributable on their Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date shall be treated as
having been paid from the Excess Reserve Fund Account or the Swap Account,
as applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the Offered Certificates on such Distribution Date
shall be treated as having been paid to the Swap Account, all pursuant to,
and as further provided in, Section 8.13. For federal income tax purposes,
the Securities Administrator will treat an Offered Certificateholder's
right to receive payments from the Excess Reserve Fund Account or the Swap
Account, subject to the obligation to pay Class IO Shortfalls, as rights
and obligations under a notional principal contract between the Class X
Certificateholders and the Offered Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R, Class RX and the Class X Certificates, will be $25,000
with integral multiples of $1 in excess thereof. The minimum denomination for
the Class P and the Class X Certificates will each be a 1% Percentage Interest
in such Class. The Class R Certificate and the Class RX Certificate will each
represent a 100% Percentage Interest in the related Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates............... All Classes of Certificates other than
the Physical Certificates.
Class A Certificates.................. Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇ and
Class A-2c Certificates.
Class B Certificates.................. Class B-1, Class B-2 and Class B-3
Certificates.
Class M Certificates.................. Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Certificates.
Delay Certificates.................... None.
ERISA-Restricted Certificates......... Residual, Class P and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the
Underwriter's Exemption.
Non-Delay Certificates................ Class A, Class X and Subordinated
Certificates.
Offered Certificates.................. Class A and Subordinated Certificates.
Physical Certificates................. Class P, Class X and Residual
Certificates.
Private Certificates.................. Class P, Class X and Residual
Certificates.
Rating Agencies....................... Moody's and Standard & Poor's.
Regular Certificates.................. All Classes of Certificates other than
the Class P and Residual Certificates.
Residual Certificates................. Class R and Class RX Certificates.
Subordinated Certificates............. Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution Account,
any Escrow Account, the Excess Reserve Fund Account or the Swap Account. Each
Account shall be an Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Agreements: The Accredited Purchase Agreement and the
Accredited Assignment Agreement, each of which are attached hereto as Exhibit O.
Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of the Closing Date, among the Sponsor, the Depositor and
Accredited.
Accredited Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Accredited Purchase Agreement for which Accredited is
identified as Originator on the Mortgage Loan Schedule.
Accredited Purchase Agreement: With respect to Accredited Mortgage
Loans, the Eighth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of August 1, 2006, by and between Accredited and the
Sponsor, as amended by the Amendment and Joinder to the Eighth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of December
21, 2006 between Accredited and the Sponsor, solely insofar as such agreement
relates to the Accredited Mortgage Loans.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Additional Disclosure Notification: A notification in the form of
Exhibit V.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per-annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 12.07.
Advancing Person: The Person to whom any Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 12.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agent: With respect to the Sponsor, the Depositor or any Affiliate
of either of them, a Person that acts for and on behalf of such Person.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Securities Administrator by the
Depositor.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Offered Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Securities Administrator (x) the
sum of (i) all scheduled installments of interest (net of the related Expense
Fees) and principal due on the Due Date on such Mortgage Loans in the related
Due Period and received by the Servicers on or prior to the related
Determination Date, together with any P&I Advances in respect thereof; (ii) all
Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds received by
the Servicers during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments on the
Mortgage Loans received by the Servicers during the related Prepayment Period
together with all Compensating Interest, if applicable, thereon (excluding any
Prepayment Charges); (iv) all Substitution Adjustment Amounts with respect to
the substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 11.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicers, the Depositor, the Master Servicer, the Securities Administrator,
the Custodians or the Trustee are entitled to be paid or reimbursed pursuant to
this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Offered Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date on such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of Offered Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk CarryForward Amount or (y) any Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Bulk Mortgage Loans: Each Mortgage Loan purchased by the Sponsor
pursuant to a Bulk Purchase Agreement and for which Decision One, First NLC, New
Century, MILA or WMC is identified on the Mortgage Loan Schedule as the
Originator.
Bulk Purchase Agreement: Any of the Decision One Purchase Agreement,
the First NLC Purchase Agreement, the MILA Purchase Agreement, the New Century
Purchase Agreement or the WMC Purchase Agreement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
Arizona, California, Delaware, Iowa, Maryland, Minnesota, New Jersey, New York
or Texas (b) a State in which any Servicer's servicing operations are located,
or (c) the State in which the Securities Administrator's operations are located,
are authorized or obligated by law or executive order to be closed.
Cap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P, Class R or Class RX Certificates, at any date,
the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
all distributions of principal previously made with respect thereto and in the
case of any Certificates, reduced by any Applied Realized Loss Amounts allocated
to such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P, Class R and Class RX Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Sponsor, the Depositor or any Affiliate or Agent of any of them
shall be deemed not to be Outstanding and the Percentage Interest evidenced
thereby shall not be taken into account in determining whether the requisite
amount of Percentage Interests necessary to effect such consent has been
obtained; provided, however, that if the Sponsor (together with its Affiliates
and Agents) or the Depositor (together with its Affiliates and Agents) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Securities
Administrator is entitled to rely conclusively on a certification of the
Sponsor, the Depositor or any such Agent or Affiliate in determining which
Certificates are registered in the name of an Agent or Affiliate of the Sponsor
or the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or the
Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 21.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $7,803,994.
Class A-1 Certificates: All Certificates bearing the Class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the Class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the Class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the Class
designation of "Class A-2c".
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 66.80% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,803,994.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount for such Distribution Date), and (H) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 71.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,803,994.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount for such
Distribution Date) and (I) the Class Certificate Balance of the Class B-3
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 76.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,803,994.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the Swap
Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Defaulted Swap Termination Payments) from
Available Funds on such Distribution Date, all as further provided in Section
8.13.
Class LT-R Interest: The residual interest in the Lower-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and any principal payments on those Classes of Certificates from the Swap
Account on that Distribution Date, by (y) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 24.80%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $7,803,994.
Class M-2 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B certificates (other than the
Class M-1 and Class M-2 Certificates) and (ii) the Subordinated Amount, in each
case after taking into account the distributions of the related Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 42.20% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$7,803,994.
Class M-3 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1, Class M-2 and Class M-3 Certificates) and (ii) the Subordinated
Amount, in each case after taking into account the distributions of the related
Principal Distribution Amount and any principal payments on those Classes of
Certificates from the Swap Account on that Distribution Date, by (y) the
aggregate Stated Principal Balance of the Mortgage Loans for that Distribution
Date.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 45.30% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,803,994.
Class M-4 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1, Class M-2, Class M-3 and Class M-4 Certificates) and (ii) the
Subordinated Amount, in each case after taking into account the distributions of
the related Principal Distribution Amount and any principal payments on those
Classes of Certificates from the Swap Account on that Distribution Date, by (y)
the aggregate Stated Principal Balance of the Mortgage Loans for that
Distribution Date.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 58.00% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$7,803,994.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 62.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $7,803,994.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier REMIC-1
as described in the Preliminary Statement and the related footnote thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier REMIC-2
as described in the Preliminary Statement and the related footnote thereto.
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class RX Certificates: All Certificates bearing the class
designation of "Class RX".
Class UT-IO Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class UT-X Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class UT-X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class UT-X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay Basis Risk CarryForward Amounts, and any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider.
Class X Interest: The regular interest in the Class X REMIC
represented by the Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Class X REMIC Regular Interest: Each of the Class X Interest and
Class IO Interest issued by the Class X REMIC.
Closing Date: September 28, 2007.
Closing Date Deposit Amount: $2,867,434.38 (all of which is
allocable to principal) deposited by the Depositor into the Distribution Account
on the Closing Date. $2,139,680.89 of the Closing Date Deposit Amount shall be
attributable to the Group I Mortgage Loans and $727,753.49 of the Closing Date
Deposit Amount shall be attributable to the Group II Mortgage Loans..
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value as determined pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and each Servicer,
the lesser of (a) the amount by which the Prepayment Interest Shortfall
resulting from Principal Prepayments in Full (excluding any Principal
Prepayments in Full made upon liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such Distribution Date on the Mortgage Loans
serviced by the applicable Servicer and (b) the amount of the aggregate
Servicing Fee paid to or retained by the applicable Servicer for such
Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Client Manager MSAC
2007-HE7 (or, for the purposes of the registration of transfers or exchanges of
Certificates, as set forth in Section 5.06), or such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders. The designated office of the Trustee in the State of
California at which at any particular time its corporate trust business with
respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Trust Administration-MS07H7, facsimile no. (714)
247-6483, and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier, if applicable) of the Interest Rate Swap Agreement
applicable for such Distribution Date, in which case the Corresponding Actual
Crossover Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be
the first Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier REMIC
or Upper-Tier REMIC that corresponds to the class of interests in the other such
REMIC or to a Class of Certificates in the manner set out below:
Corresponding Lower-Tier Corresponding Upper-Tier Corresponding Class of
Class Designation Regular Interest Certificates
------------------------- ------------------------ ----------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Countrywide Amendment Regulation AB: The Amendment Regulation AB,
dated as of January 26, 2006, by and among Countrywide Servicing, Countrywide
Home Loans, Inc. and the Sponsor, a copy of which is attached hereto as Exhibit
CC.
Countrywide Serviced Mortgage Loans: The Accredited Mortgage Loans
purchased by the Sponsor pursuant to the Accredited Purchase Agreement for which
Countrywide Servicing is identified as the Servicer on the Mortgage Loan
Schedule and the Decision One Mortgage Loans purchased by the Sponsor pursuant
to the Decision One Purchase Agreement for which Countrywide Servicing is
identified as the Servicer on the Mortgage Loan Schedule.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in interest.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date through the last day of
the related Prepayment Period and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable Cumulative
Loss Percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
----------------------------------- ------------------------------------------
October 2009 through September 2010 2.800% for the first month, plus an
additional 1/12th of 3.500% for each month
thereafter (e.g., 4.550% in April 2010)
October 2010 through September 2011 6.300% for the first month, plus an
additional 1/12th of 3.700% for each month
thereafter (e.g., 8.150% in April 2011)
October 2011 through September 2012 10.000% for the first month, plus an
additional 1/12th of 2.350% for each month
thereafter (e.g., 11.175% in April 2012)
October 2012 through September 2013 12.350% for the first month, plus an
additional 1/12th of 0.650% for each month
thereafter (e.g., 12.675% in April 2013)
October 2013 through September 2014 13.000% for the first month, plus an
additional 1/12th of 0.100% for each month
thereafter (e.g., 13.050% in April 2014)
October 2014 and thereafter 13.100%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee (in its custodial capacity) or the applicable Custodian
consisting of items (a) - (h) as listed on Exhibit K hereto.
Custodians: With respect to the Decision One Mortgage Loans,
LaSalle; with respect to the WMC Mortgage Loans, ▇▇▇▇▇ Fargo; and with respect
to all other Mortgage Loans, Deutsche Bank.
Custodian Fee: With respect to each Distribution Date, the aggregate
amount of fees and expenses that each Custodian is entitled to receive, pursuant
to the fee schedule related to the Mortgage Loans for which the applicable
Custodian is acting as custodian, to which the Depositor and the applicable
Custodian have previously agreed, for custodial services rendered with respect
to such Mortgage Loans, as applicable, during the related Due Period. Each
Custodian shall inform the Master Servicer of its Custodian Fee on or prior to
the related Determination Date pursuant to Section 3.07(h). The Custodian Fee
shall be first received by the Master Servicer and the Master Servicer shall
then pay the Custodians the Custodian Fee to which they are entitled.
Custodian Fee Rate: As to any Distribution Date, the applicable
Custodian Fee for such Distribution Date, converted to a per annum rate on (i)
the aggregate Stated Principal Balance of the Mortgage Loans as of the close of
business on the day immediately preceding the first day of the related Due
Period and (ii) with respect to the Determination Date in October 2007 only, the
portion of the Closing Date Deposit Amount allocable to principal (calculated on
an actual/360 basis).
Custodian's Weighted Average Percentage: As defined in Section
8.14(e).
Cut-off Date: September 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate of the Cut-off
Date Principal Balances of all Mortgage Loans, plus the portion of the Closing
Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on or prior to that date, whether or
not received).
Data Tape Information: The information provided by the Originators
as of the Cut-off Date to the Depositor or the Sponsor setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take out refinance); (13) a code indicating the documentation
style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Originator of such Mortgage
Loan; (23) with respect to each First Lien Mortgage Loan, the LTV at
origination, and with respect to each Second Lien Mortgage Loan, the CLTV at
origination; and (24) if such Mortgage Loan is covered by a primary mortgage
insurance policy or a lender-paid primary mortgage insurance policy, the primary
mortgage insurance rate. With respect to the Mortgage Loans in the aggregate,
the Data Tape Information shall set forth the following information, as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Decision One: Decision One Mortgage Company, LLC, a North Carolina
limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Decision One Purchase Agreement for which Decision One
is identified as Originator on the Mortgage Loan Schedule.
Decision One Purchase Agreement: The Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2006, by and
between Decision One and the Sponsor.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
Defaulting Party (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement) (other than
Illegality or a Tax Event that is not a Tax Event Upon Merger (each as defined
in the Interest Rate Swap Agreement )) with respect to which the Swap Provider
is the sole Affected Party (as defined in the Interest Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is removed from the
Trust pursuant to the terms of this Agreement or the Representation and
Warranties Agreement.
Delinquency Loss Trigger Event: With respect to any Distribution
Date, the circumstances in which the quotient (expressed as a percentage) of (x)
the rolling three month average of the aggregate unpaid principal balance of 60+
Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate unpaid principal balance of the Mortgage Loans, as of the last day of
each related Due Period, equals or exceeds 20.43% of the prior period's Senior
Enhancement Percentage; (2) after the aggregate Class Certificate Balance of the
Class A Certificates have been reduced to zero, the aggregate unpaid principal
balance of the Mortgage Loans, as of the last day of each related Due Period,
equals or exceeds 21.27% of the prior period's Class M-1 Enhancement Percentage,
(3) after the aggregate Class Certificate Balance of the Class A Certificates
and the aggregate Class Certificate Balance of the Class M-1 Certificates have
been reduced to zero, the aggregate unpaid principal balance of the Mortgage
Loans, as of the last day of each related Due Period, equals or exceeds 27.68%
of the prior period's Class M-2 Enhancement Percentage, (4) after the aggregate
Class Certificate Balance of the Class A Certificates, the aggregate Class
Certificate Balance of the Class M-1 Certificates and the aggregate Class
Certificate Balance of the Class M-2 Certificates have been reduced to zero, the
aggregate unpaid principal balance of the Mortgage Loans, as of the last day of
each related Due Period, equals or exceeds 29.25% of the prior period's Class
M-3 Enhancement Percentage and (5) after the aggregate Class Certificate Balance
of the Class A Certificates, the aggregate Class Certificate Balance of the
Class M-1 Certificates, the aggregate Class Certificate Balance of the Class M-2
Certificates and the aggregate Class Certificate Balance of the Class M-3
Certificates have been reduced to zero, the aggregate unpaid principal balance
of the Mortgage Loans, as of the last day of each related Due Period, equals or
exceeds 38.09% of the prior period's Class M-4 Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8 102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Securities Administrator, that (a) is incorporated under the laws
of the United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by
Standard & Poor's (to the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the case of ▇▇▇▇▇ Fargo Servicer and Countrywide Servicing, and the 15th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the case of Saxon, of the calendar month in which such Distribution Date
occurs.
Deutsche Bank: Deutsche Bank National Trust Company.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.07(d) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "▇▇▇▇▇ Fargo Bank, National Association, in trust for registered
Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, Series 2007-HE7." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in
October 2007.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution (provided, however, that following a
downgrade, withdrawal, or suspension of such Eligible Institution's Standard &
Poor's rating below the levels set forth in definition of "Eligible Institution"
with respect to any Eligible Account, the applicable Eligible Institution shall
either (x) obtain a guaranty from a guarantor which satisfies the Standard &
Poor's requirements set forth in such definition, or (y) transfer any such
Eligible Account to one or more segregated trust accounts in the trust
department of an institution which satisfies the definition of "Eligible
Institution", in either case, as promptly as practicable (and in any case within
not more than 60 calendar days with respect to the Excess Reserve Fund Account
or the Swap Account, or 30 calendar days with respect to each other Account)),
(ii) an account maintained with the corporate trust department of a federal
depository institution or state-chartered depository institution subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the U.S.
Code of Federal Regulation Section 9.10(b), which, in either case, has corporate
trust powers and is acting in its fiduciary capacity or (iii) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Securities Administrator. Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated at least "A-2" by Standard &
Poor's, "P-2" by Moody's or "F-2" by Fitch if the amounts on deposit are to be
held in the account for no more than 365 days, or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-2" by Moody's and "F-2" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicers and the Securities Administrator) (in each case, to the extent
they are designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2007-5, 72 Fed. Reg. 13130 (2007) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator for the benefit of the
Regular Certificateholders and designated "▇▇▇▇▇ Fargo Bank, National
Association, in trust for registered Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-HE7, Mortgage Pass-Through Certificates, Series 2007-HE7." Funds
in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate and the Master Servicing Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Master Servicing Fee and any lender-paid primary mortgage insurance
fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than any Mortgage Loan or REO Property purchased
by the applicable Originator or the Depositor, as applicable, as contemplated by
this Agreement, the Bulk Purchase Agreements or the Accredited Agreements, as
applicable), a determination made by the applicable Servicer that all Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and other payments or
recoveries which the applicable Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered.
Each Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution
Date in July 2037.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services, LLC, a Florida limited
liability company, and its successors in interest.
First NLC Purchase Agreement: The Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of April 1, 2006,
between First NLC and the Sponsor.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 12.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. 2007-HE7, or such other address as Fitch may
hereafter furnish to the Depositor, the Securities Administrator, the Trustee
and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Grantor Trust: As described in the Preliminary Statement.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates and the Class A-2c Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs (or,
in the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date) and ending on the
day immediately preceding the current Distribution Date. With respect to the
Class LT-Accrual, Class LT-Group I, Class LT-Group II, Class LT-IO, Class UT-X,
Class UT-IO, Class X and Class IO Interests and each Pooling-Tier REMIC-1
Regular Interest and Pooling-Tier REMIC-2 Regular Interest and any Distribution
Date, the calendar month preceding such Distribution Date. For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Offered Certificates, dated as of the Closing Date, between the
Cap Provider and the Securities Administrator, a copy of which is attached
hereto as Exhibit EE.
Interest Rate Cap Payment: With respect to any Distribution Date,
the payment, if any, required to be made by the Cap Provider under the Interest
Rate Cap Agreement with respect to such Distribution Date.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between the Swap Provider and the Securities
Administrator (a copy of which is attached hereto as Exhibit U).
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, the portion of Available Funds
attributable to interest received or advanced on such Mortgage Loans, net of the
fees payable to the Servicers and the Master Servicer, and net of any Net Swap
Payments and any Swap Termination Payments, other than Defaulted Swap
Termination Payments, payable to the Swap Provider from Available Funds
attributable to such Loan Group with respect to that Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90 1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in house asset
managers"), or any comparable exemption available under Similar Law.
LaSalle: LaSalle Bank National Association, a national banking
association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the Offered
Certificates, the rate determined by the Securities Administrator on the related
LIBOR Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits as such rate appears on Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Reuters Page LIBOR01, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Securities Administrator shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Securities
Administrator (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar loans to
leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the applicable Servicer has certified to the Securities
Administrator that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property, or (b) is a Second Lien Mortgage Loan (1) that
is delinquent 180 days or longer, (2) for which the related first lien mortgage
loan is not a Mortgage Loan, and (3) as to which the applicable Servicer has
certified to the Master Servicer that it does not believe there is a reasonable
likelihood that any further net proceeds will be received or recovered with
respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group I Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group II Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class
LT-IO, Class LT-Group I, Class LT-Group II and Class LT-Accrual Interests as
described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Master Servicer: ▇▇▇▇▇ Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicer Float Period: With respect to each Distribution Date
and the related amounts in the Distribution Account, the period commencing on
the Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the related Master Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the close
of business on the day immediately preceding the first day of the related Due
Period (or as of the Closing Date in the case of the first Distribution Date)
or, in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.008%.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with MERS Procedure Manual and (b)
the Originators have designated or will designate the Trustee as the Investor on
the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
MILA: MILA, Inc., a Washington corporation, and its successors in
interest.
MILA Purchase Agreement: The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Seller Agreement, dated
as of September 10, 2003, by and between MILA and the Sponsor.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and its successors in
interest. If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(b), the address for notices to Moody's
shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Securities Administrator,
the Trustee and the Servicers.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Delaware corporation.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Master Servicer and referred to on Schedule I, such schedule setting forth
the following information with respect to each Mortgage Loan: (1) the Mortgage
Loan number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
the applicable Originator's name; (16) whether such Mortgage Loan is a Group I
Mortgage Loan or a Group II Mortgage Loan; (17) the date such Mortgage Loan was
sold by the applicable Originator to the Sponsor; (18) whether such Mortgage
Loan provides for a Prepayment Charge as well as the term and amount of such
Prepayment Charge, if any; (19) with respect to each First Lien Mortgage Loan,
the LTV at origination, and with respect to each Second Lien Mortgage Loan, the
CLTV at origination; (20) the applicable Servicer's name; (21) the date on which
servicing of the Mortgage Loan was transferred to the applicable Servicer, and
(22) the applicable Custodian's name. The Master Servicer, upon request, shall
provide a copy of the Mortgage Loan Schedule, and any amendments, supplements or
modifications thereto, to the Trustee and the Custodians promptly upon receipt
of such request.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the portion
of Available Funds remaining for distribution pursuant to subsection
4.02(a)(iii) (before giving effect to distributions pursuant to such
subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
New Century: Collectively, New Century Mortgage Corporation and its
affiliates, NC Capital Corporation, New Century Credit Corporation, Home123
Corporation and NC Asset Holding, L.P. and their successors in interest.
New Century Purchase Agreement: The Sixth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2006, by and
between NC Capital Corporation and the Sponsor.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, three months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, and
(ii) each REO Property.
NMWHFIT: A "Non-Mortgage Widely Held Fixed Investment Trust" as that
term is defined in Treasury Regulations Section 1.671-5(b)(12) or successor
provisions.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 11.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of any
Servicer or Subservicer with responsibility for the servicing of the Mortgage
Loans required to be serviced by such Servicer or Subservicer and listed on a
list delivered to the Master Servicer pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee and/or the Securities Administrator, as applicable (and/or such other
Persons as may be set forth herein), provided that any Opinion of Counsel
relating to (a) qualification of any Trust REMIC or (b) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of such Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in such Servicer of the Mortgage Loans or in an Affiliate thereof and
(iii) is not connected with such Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Originators: Accredited, Decision One, First NLC, MILA, New Century
and WMC.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed-in-lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Offered
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.950%; Class A-2a Certificates, 0.800%;
Class A-2b Certificates, 1.000%; Class A-2c Certificates, 1.250%; Class M-1
Certificates, 2.000%; Class M-2 Certificates, 2.000%; Class M-3 Certificates,
2.000%; Class M-4 Certificates, 2.000%; Class M-5 Certificates, 2.000%; Class
B-1 Certificates, 2.250%; Class B-2 Certificates, 2.250%; and Class B-3
Certificates, 2.250%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 1.900%; Class A-2a Certificates, 1.600%; Class A-2b Certificates,
2.000%; Class A-2c Certificates, 2.500%; Class M-1 Certificates, 3.000%; Class
M-2 Certificates, 3.000%; Class M-3 Certificates, 3.000%; Class M-4
Certificates, 3.000%; Class M-5 Certificates, 3.000%; Class B-1 Certificates,
3.375%; Class B-2 Certificates, 3.375% and Class B-3 Certificates, 3.375%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular Interest and
each Class X REMIC Regular Interest, the per-annum rate set forth or calculated
in the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by any Servicer, the Securities Administrator or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution and rated "P-1" by Moody's, "F1+" by
Fitch and "A-1+" by Standard & Poor's (to the extent they are Rating
Agencies hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any State thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or an Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAAm" by Standard &
Poor's and at least "AA" by Fitch (to the extent they are Rating Agencies
hereunder and such funds are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to the
Rating Agencies as a permitted investment of funds backing "Aaa" or "AAA"
rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty of such Person or any other U.S.
Person, or a U.S. Person treated as a partnership for U.S. federal income tax
purposes, any direct or indirect beneficial owner of which (other than through a
U.S. corporation) is (or is permitted to be under the related partnership
agreement) not a U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any Trust REMIC to
fail to qualify as a REMIC at any time that the Certificates are outstanding.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7721 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group I WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group II WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by a Servicer with respect to any Mortgage Loan serviced
by such Servicer as to which a Principal Prepayment in Full occurs from the 1st
day of the month through the 15th day of the month in which such Distribution
Date occurs and that represents interest that accrues from the 1st day of such
month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one-month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the applicable Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and any
Servicer either (i) the period commencing on the 16th day of the month preceding
the month in which such Distribution Date occurs (or, in the case of the first
Distribution Date, from and including the Cut-off Date) to and including the
15th day of the month in which such Distribution Date occurs or (ii) the
calendar month prior to that Distribution Date, with respect to any partial
Principal Prepayments or any involuntary Principal Prepayments in the case of
▇▇▇▇▇ Fargo Servicer.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received by the applicable Servicer in advance of its scheduled Due
Date, excluding any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the applicable Servicer
on or prior to the related Determination Date or advanced by the applicable
Servicer for the related Remittance Date, and all Principal Prepayments received
during the related Prepayment Period; (ii) all Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans allocable to
principal actually collected by the applicable Servicer during the related
Prepayment Period; (iii) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased with respect to such
Distribution Date; (iv) all Substitution Adjustment Amounts allocable to
principal received in connection with the substitutions of Mortgage Loans with
respect to such Distribution Date; (v) with respect to the Distribution Date in
October 2007 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 11.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated September
27, 2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Accredited Purchase Agreement
and the Bulk Purchase Agreements.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Securities
Administrator. References herein to a given rating or rating category of a
Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 12.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating Agency may hereafter furnish to the Depositor, the Securities
Administrator, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Definitive Certificate, the Record Date shall be
the close of business on the last Business Day of the month preceding the month
in which the applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date with respect to
Countrywide Servicing, the third Business Day immediately preceding such
Distribution Date with respect to ▇▇▇▇▇ Fargo Servicer and the 21st day (or if
such day is a Saturday, then the first Business Day immediately preceding that
day, or if such day is a Sunday or otherwise not a Business Day, then the
immediately following Business Day) of the month of each related Distribution
Date with respect to Saxon.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement.
Reportable Event: As defined in Section 8.12(g).
Representations and Warranties Agreement: The Representations and
Warranties Agreement, dated as of September 28, 2007, between the Depositor and
the Sponsor, a copy of which is attached hereto as Exhibit DD.
Repurchase Price: With respect to any Mortgage Loan repurchased by
(a) the Depositor or the Sponsor, an amount equal to the sum of (i) the unpaid
principal balance of such Mortgage Loan as of the date of repurchase, (ii)
interest on such unpaid principal balance of such Mortgage Loan at the Mortgage
Rate from the last date through which interest has been paid and distributed to
the Securities Administrator to the date of repurchase, (iii) all unreimbursed
Servicing Advances, (iv) all costs and expenses incurred by the Master Servicer
or the Trustee, as the case may be, arising out of or based upon a breach or
defect, including without limitation, costs and expenses relating to the Master
Servicer's or the Trustee's enforcement of the repurchase obligation of the
Depositor under this Agreement or of the Sponsor under the Representations and
Warranties Agreement, and (v) any costs and damages incurred by the Trust in
connection with any violation by such Mortgage Loan of any predatory lending law
or abusive lending law and (b) Accredited, the repurchase price specified in the
Accredited Agreements. In addition to the Repurchase Price, Accredited is
obligated to make certain payments for material breaches of representations and
warranties as further set forth in the Accredited Agreements.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee and the applicable Custodian, as applicable,
substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator or the Master Servicer, any managing director, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, or any other officer of the Trustee, the Securities
Administrator or the Master Servicer, customarily performing functions similar
to those performed by any of the above designated officers who at such time
shall be officers to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Agreement.
Reuters Page LIBOR01: The display page currently so designated on
the Reuters Xtra 3000 Service (or such other page as may replace that page on
that service or any successor service for displaying comparable rates or
prices).
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation, and its
successors in interest.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo, and its successors in
interest, if any, and, if a successor securities administrator is appointed
hereunder, such successor.
Securities Administrator Information: As defined in Section 8.12(d).
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount, including any principal payments on those Classes of
Certificates from the Swap Account on that Distribution Date, by (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 78.30%.
Servicer: Saxon, Countrywide Servicing or ▇▇▇▇▇ Fargo Servicer, as
applicable, and if a successor servicer to any Servicer is appointed hereunder,
such successor. When the term "Servicer" is used in this Agreement in connection
with the administration of servicing obligations with respect to any Mortgage
Loan, Mortgaged Property, REO Property or Mortgage File, "Servicer" shall mean
the Person identified as the Servicer of such Mortgage Loan on the Mortgage Loan
Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management and liquidation of any REO Property
(including, with respect to Saxon, reasonable fees paid to any independent
contractor in connection therewith) and (iv) the performance of its obligations
under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also
include any reasonable "out-of-pocket" costs and expenses (including legal fees)
incurred by the applicable Servicer in connection with executing and recording
instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage in
connection with any foreclosure in respect of any Mortgage Loan to the extent
not recovered from the Mortgagor or otherwise payable under this Agreement. No
Servicer shall be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit Q
hereto. With respect to Countrywide Servicing, "servicing criteria" shall have
the meaning set forth in the Countrywide Amendment Regulation AB.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest at the Servicing Fee Rate on the applicable Stated Principal
Balance of such Mortgage Loan as of the close of business on the day immediately
preceding the first day of the related Due Period. Such fee shall be payable
monthly, solely from the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds
and proceeds received with respect to REO Properties, to the extent permitted by
Section 3.11) of such Scheduled Payment collected by such Servicer, or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Trustee or the
applicable Custodian, as applicable, in the Custodial File and copies of the
Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Master Servicer and the Trustee by any Servicer on the Closing Date pursuant
to this Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan, the
date on which servicing of such Mortgage Loan was transferred to the applicable
Servicer (as set forth in the Mortgage Loan Schedule).
Significant Change to a Permitted Activity: With respect to any
amendment or other instrument entered into pursuant to Section 12.01, a change
to the activities of the Trust that would significantly change its permitted
activities and thus cause the Trust to cease to be a "qualifying special purpose
entity" under accounting principles generally accepted in the United States.
This definition shall be interpreted in a manner consistent with the
requirements of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or any successor to that accounting standard, and any other
relevant authoritative accounting literature, as such requirements are
applicable from time to time.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, (ii)
each Mortgage Loan in foreclosure and (iii) each REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 11.80% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 23.60% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then aggregate Stated Principal Balance of the Mortgage Loans
but will instead remain the same as the prior period's Specified Subordinated
Amount until the Distribution Date on which a Trigger Event is no longer in
effect. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Holdings LLC, a New York
limited liability company, successor-in-interest by merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., and its successors in interest, as purchaser of the
Mortgage Loans under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 12.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Surveillance Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE7, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Securities Administrator, the Trustee and the Servicers.
Startup Day: As defined in Section 2.05.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Securities Administrator with respect to the related Mortgage Loan
representing payments or recoveries of principal including advances in respect
of scheduled payments of principal. For purposes of any Distribution Date, the
Stated Principal Balance of any Mortgage Loan will give effect to any scheduled
payments of principal received by the related Servicer on or prior to the
related Determination Date or advanced by the related Servicer for the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Prepayment Period, and the
Stated Principal Balance of any Mortgage Loan that has prepaid in full or has
become a Liquidated Mortgage Loan during the related Prepayment Period shall be
zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in October 2010 and (b) the Distribution Date following
the Distribution Date on which the aggregate Class Certificate Balances of the
Class A Certificates have been reduced to zero and (ii) the first Distribution
Date on which the Senior Enhancement Percentage (calculated for this purpose
only after taking into account payments of principal on the Mortgage Loans
applied to reduce the Stated Principal Balances of the Mortgage Loans for the
applicable Distribution Date but prior to any allocation of the Principal
Distribution Amount and principal payments from the Swap Account to the
Certificates on such Distribution Date) is greater than or equal to the Senior
Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by a Servicer, a Subservicer, the Securities
Administrator, the Trustee or a Custodian, as applicable, that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans. With respect to Countrywide Servicing,
"Subcontractor" shall have the meaning set forth in the Countrywide Amendment
Regulation AB.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the Offered Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of a
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by a Servicer under
this Agreement with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB. With respect to Countrywide
Servicing, "Subservicer" shall have the meaning set forth in the Countrywide
Amendment Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
Accredited for a Deleted Mortgage Loan that satisfies the criteria set forth in
the definition of "Qualified Substitute Mortgage Loan" in the applicable
Purchase Agreement or (ii) substituted by the Depositor or the Sponsor for a
Deleted Mortgage Loan, which, if substituted by the Depositor or the Sponsor,
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not more than 10% less than, the
Stated Principal Balance of the Deleted Mortgage Loan; (b) be accruing interest
at a rate no lower than and not more than 1% per-annum higher than, that of the
Deleted Mortgage Loan; (c) have a Loan-to-Value Ratio or a Combined
Loan-to-Value Ratio, as applicable, no higher than that of the Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; and (e) comply with each
applicable representation and warranty set forth in Section 2.03, the Accredited
Agreements or the Representations and Warranties Agreement, as applicable.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate Swap
Agreement, the Class IO Interest and the right to receive Class IO Shortfalls,
subject to the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the Offered Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment (other
than a Defaulted Swap Termination Payment) payable from Available Funds to the
Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement); provided
that a Swap Termination Payment shall not be paid from Available Funds to the
extent already paid by a replacement swap provider as a Replacement Swap
Provider Payment.
Tax Matters Person: The Holder of the (i) Class R and (ii) Class RX
Certificates designated as "tax matters person" of (i) Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC, and (ii)
the Class X REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicers on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date, (B) any Net Swap Payments to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment) payable to
the Swap Provider from Available Funds.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all principal outstanding as the close of business on
the Cut-off Date (after giving effect to payments of principal due on or prior
to the Cut-off Date, whether or not received) and interest due and accrued on
the Mortgage Loan after the Cut-off Date (or, if the Due Date for any Mortgage
Loan is other than on the first day of the month, after the Due Date immediately
preceding the Cut-off Date); (ii) the Collection Accounts, the Excess Reserve
Fund Account, the Distribution Account, and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; (iv) the Closing Date Deposit Amount; (v) the Swap
Assets; (vi) the Depositor's rights under the Accredited Agreements (solely
insofar as such agreements relate to the Accredited Mortgage Loans) and the
Representations and Warranties Agreement; (vii) the Interest Rate Cap Agreement;
and (viii) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC, the Upper-Tier REMIC or the Class X REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriter's Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2007-5, 72 Fed. Reg. 13130
(2007), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to the
Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Upper-Tier Regular Interest on such
Distribution Date taking into account the Upper-Tier REMIC Loan Group I Rate or
Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier
REMIC WAC Rate and (B) the Upper-Tier CarryForward Amount for such Class of
Certificates for all previous Distribution Dates not previously paid, together
with interest thereon at a rate equal to the applicable Upper-Tier Interest Rate
for such Class of Certificates for such Distribution Date, without giving effect
to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II
Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period, weighted on the basis of the Lower-Tier Principal
Amounts of such Lower-Tier Regular Interests as of the first day of the related
Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then in effect on
the beginning of the related Due Period on the Mortgage Loans minus the Swap
Payment Rate, adjusted in each case to accrue on the basis of a 360-day year and
the actual number of days in the related Interest Accrual Period. With respect
to the first Due Period and the first Distribution Date only, the WAC Cap shall
be reduced by a fraction, the numerator of which is the Closing Date Deposit
Amount and the denominator of which is the Cut-off Date Pool Principal Balance.
▇▇▇▇▇ Fargo Servicer: ▇▇▇▇▇ Fargo, in its capacity as servicer
hereunder.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, and its successors in interest.
WHFIT: A "Widely Held Fixed Investment Trust" as that term is
defined in Treasury Regulations Section 1.671-5(b)(22) or successor provisions.
WHFIT Regulations: Treasury Regulations Section 1.671-5, as amended.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Sponsor
pursuant to the WMC Purchase Agreement for which WMC is identified as Originator
on the Mortgage Loan Schedule.
WMC Purchase Agreement: The Fifth Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of November 1, 2006, by and between
WMC and the Sponsor.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in the Interest Rate Cap Agreement) due and payable
to the Cap Provider pursuant to the terms of the Interest Rate Cap Agreement.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to LaSalle with
respect to the Decision One Mortgage Loans, to ▇▇▇▇▇ Fargo, in its capacity as a
Custodian, with respect to the WMC Mortgage Loans, and to Deutsche Bank, with
respect to all Mortgage Loans other than the Decision One Mortgage Loans and the
WMC Mortgage Loans, for the benefit of the Certificateholders the following
documents or instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Note for endorsements, the endorsement may be contained on an
allonge, unless the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, is advised in writing by the applicable
Originator (if required by the applicable Purchase Agreement) or the
Depositor, as applicable, that state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note if any;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the applicable Originator, the Depositor, title
company, escrow company or attorney, as applicable, shall deliver or cause
to be delivered to the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, a photocopy of such Mortgage
certified by the applicable Originator or the Depositor, title company,
escrow company or attorney, as applicable, to be a true and complete copy
of such Mortgage and shall forward to the Trustee (in its custodial
capacity) or the applicable Custodian, as applicable, such original
recorded Mortgage within 14 days following the applicable Originator's or
the Depositor's receipt of such Mortgage from the applicable public
recording office; or in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(iv) originals or copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording thereon
or a certified true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, which may, except with respect to the WMC Mortgage
Loans, be included in a blanket assignment or assignments (except with
respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan) to
the last endorsee with evidence of recording thereon or a certified true
copy of such intervening assignments of Mortgage submitted for recording,
or if any such intervening assignment has not been returned from the
applicable recording office or has been lost or if such public recording
office retains the original recorded assignments of Mortgage, the
Depositor shall deliver or cause to be delivered a photocopy of such
intervening assignment, certified by the applicable Originator, Depositor,
title company, escrow company or attorney, as applicable, to be a true and
complete copy of such intervening assignment and shall forward to the
Trustee (in its custodial capacity) or the applicable Custodian, as
applicable, such original recorded intervening assignment within 14 days
following the Depositor's receipt of such from the applicable public
recording office; or in the case of an intervening assignment where a
public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment;
(vii) the original or copy of mortgagee title insurance policy, a
photocopy of the mortgage title insurance policy, or attorney's opinion of
title and abstract of title, or, in the event such title policy is
unavailable, a copy of the related policy binder or commitment for title
from the title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the Trustee
in enforcing the obligations of Accredited under the Accredited Agreements or,
with respect to the Bulk Mortgage Loans, the obligations of the Sponsor under
the Representations and Warranties Agreement.
With respect to the Mortgage Loans, the Depositor shall cause to be
delivered to the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, the applicable recorded document promptly upon receipt
from the respective recording office.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the applicable Servicer shall take all reasonable actions as are necessary at
the expense of the applicable Originator to the extent permitted under the
related Purchase Agreement and otherwise at the expense of the Depositor to
cause the Trust to be shown as the owner of the related Mortgage Loan on the
records of MERS for the purpose of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, additional original documents, additional
documents evidencing an assumption, modification, consolidation or extension of
a Mortgage Loan in accordance with the terms of this Agreement upon receipt of
such documents. All such mortgage documents held by the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, as to each
Mortgage Loan shall constitute the "Custodial File".
On or prior to the Closing Date, the Depositor shall deliver or
cause to be delivered to the Trustee (in its custodial capacity) or applicable
Custodian, as applicable, Assignments of Mortgages, in blank, for each Mortgage
Loan. The Depositor shall cause such Assignment of Mortgages and complete
recording information with respect thereto to be provided to the applicable
Servicer in a reasonably acceptable manner. No later than thirty (30) Business
Days following the later of the Closing Date and the date of receipt by the
applicable Servicer of the complete recording information for a Mortgage and
except as set forth below, such Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the Depositor or the applicable
Originator as required pursuant to the related Purchase Agreement and at no
expense to the Trust Fund, the Trustee or the Servicers in the appropriate
public office for real property records, each Assignment of Mortgage referred to
in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (i) if the Trustee and
each Rating Agency have received an Opinion of Counsel, satisfactory in form and
substance to the Trustee, the Custodians and each Rating Agency to the effect
that the recordation of such Assignments of Mortgage in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note, (ii) if such Mortgage Loan is a MERS Designated Mortgage Loan or
(iii) if the Rating Agencies have each notified the Depositor in writing that
not recording any such Assignments of Mortgage would not cause the initial
ratings on any Offered Certificates to be downgraded or withdrawn; provided,
however, that no Servicer shall be held responsible or liable for any loss that
occurs because an Assignment of Mortgage was not recorded, but only to the
extent the applicable Servicer does not have prior knowledge of the act or
omission that causes such loss. Unless the Depositor gives the Servicers notice
to the contrary, the Depositor is deemed to have given the Servicers notice that
the condition set forth in clause (iii) above is applicable. However, with
respect to the Assignments of Mortgage referred to in clauses (i) and (ii)
above, if foreclosure proceedings occur against a Mortgaged Property, the
applicable Servicer shall record such Assignment of Mortgage at the expense of
the Depositor or the related Originator (and at no expense to such Servicer) as
required pursuant to the related Purchase Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to "Deutsche Bank
National Trust Company, as trustee under the Pooling and Servicing Agreement
dated as of September 1, 2007, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE7." In the event that any such Assignment of Mortgage is lost or returned
unrecorded because of a defect therein, the Depositor shall promptly cause to be
delivered a substitute Assignment of Mortgage to cure such defect and thereafter
cause each such assignment to be duly recorded. If there is such a defect with
respect to an Accredited Mortgage Loan of which the Trustee has received written
notice, the Trustee shall pursue all legal remedies available to the Trustee to
enforce the rights of the Trust as "Sponsor" under the Accredited Agreements, if
the Trustee has received written notice from the Depositor directing the Trustee
to pursue such remedies.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee (in its custodial capacity) or the applicable Custodian, as
applicable, within one year following the date such Mortgage Loan was sold by
the applicable Originator to the Sponsor, and in the event that such Originator
or the Sponsor, as applicable, does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Depositor,
the Depositor shall cause such Originator or the Sponsor, as applicable to
repurchase such Mortgage Loan, or upon the request of the Depositor shall
repurchase such Mortgage Loan at the price and in the manner specified in
Section 2.03. The foregoing repurchase obligation shall not apply in the event
that the applicable Originator or the Sponsor cannot deliver such original or
copy of any document submitted for recordation to the appropriate public
recording office within the specified period due to a delay caused by the
recording office in the applicable jurisdiction; provided, that such Originator
shall instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer's certificate of an officer of
the applicable Originator, or the Depositor confirming that such document has
been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Depositor shall be deemed to have been satisfied upon delivery by the
applicable Originator to the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, prior to the Closing Date of a copy of such
Mortgage or assignment, as the case may be, certified (such certification to be
an original thereof) by the public recording office to be a true and complete
copy of the recorded original thereof.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and the Custodians, as applicable, a copy of the Data Tape Information
in an electronic, machine readable medium in a form acceptable to the Depositor,
the Trustee or the Custodians, as applicable.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL
I INC. TRUST 2007-HE7" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representation and warranty set
forth in paragraph (yy) of Schedule IV to this Agreement. The Trust's fiscal
year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans, the Accredited Agreements
and the Representations and Warranties Agreement) pursuant to Section 2.01(a).
The Securities Administrator on behalf of the Trust is hereby directed to enter
into the Interest Rate Swap Agreement and the Interest Rate Cap Agreement.
(e) The Depositor shall use reasonable efforts to assist the Trustee
in enforcing the obligations of the Sponsor under the Representations and
Warranties Agreement.
Section 2.02 Acceptance by the Trustee and the Custodians of the
Mortgage Loans. The Trustee (in its custodial capacity) and each Custodian shall
acknowledge, on the Closing Date, receipt by the Trustee or the applicable
Custodian, as applicable, on behalf of the Trustee, of the documents identified
in the Initial Certification in the form annexed hereto as Exhibit E, and
declares that it holds and will hold such documents and the other documents
delivered to it pursuant to Section 2.01, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders. The Trustee (in its
custodial capacity) and the Custodians shall maintain possession of the related
Mortgage Notes in the States of California, Illinois, Minnesota or Utah unless
otherwise permitted by the Rating Agencies. Furthermore, the Trustee solely in
its capacity as trustee hereunder, and on behalf of the Trust, hereby assumes
the obligations of the Depositor under the Representations and Warranties
Agreement from and after the Closing Date and solely insofar as they relate to
the Mortgage Loans.
As provided above, in connection with the Closing Date, the Trustee
(in its custodial capacity) and the Custodians shall be required to deliver via
facsimile or electronically in .pdf format (with original to follow the next
Business Day) to the Depositor and the Servicers an Initial Certification on the
Closing Date, certifying receipt of a Mortgage Note and Assignment of Mortgage
for each applicable Mortgage Loan. Neither the Trustee nor the Custodians shall
be responsible to verify the validity, sufficiency, genuineness, perfection or
priority of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee (in its custodial
capacity) and each Custodian shall, for the benefit of the Holders of the
Certificates, ascertain that all documents identified in the Document
Certification and Exception Report in the form attached hereto as Exhibit F with
respect to the Mortgage Loans for which it is acting as a custodian, are in its
possession, and shall deliver to the Depositor, the Servicers and the Trustee,
if delivered by any Custodian, a Document Certification and Exception Report, in
the form annexed hereto as Exhibit F, to the effect that, as to each applicable
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such certification
as an exception and not covered by such certification): (i) all documents
identified in the Document Certification and Exception Report and required to be
reviewed by it are in its possession; (ii) such documents have been reviewed by
it and appear regular on their face and relate to such Mortgage Loan; (iii)
based on its examination and only as to the foregoing documents, the information
set forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such Mortgage Loan
accurately reflects the information set forth in the Custodial File; and (iv)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither the Trustee nor the Custodians shall be responsible to verify
the validity, sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the applicable Servicer (for
the benefit of the Holders of the Certificates, based solely on the list of MERS
Designated Mortgage Loans and screen printouts from the MERS System provided to
such Servicer by the applicable Originator no later than 45 days after the
Closing Date) shall confirm, on behalf of the Trust, that the Trustee is shown
as the Investor with respect to each MERS Designated Mortgage Loan on such
screen printouts. If the Trustee is not shown as the Investor with respect to
any MERS Designated Mortgage Loans on such screen printouts, the applicable
Servicer shall promptly notify the related Originator of such fact, and such
Person shall then either cure such defect or repurchase such Mortgage Loan in
accordance with Section 2.03.
The Trustee (in its custodial capacity) and the Custodians shall
retain possession and custody of each applicable Custodial File in accordance
with and subject to the terms and conditions set forth herein. The applicable
Servicer shall promptly deliver to the Trustee (in its custodial capacity) or
the applicable Custodian, as applicable, upon the execution or receipt thereof,
the originals of such other documents or instruments constituting the Custodial
File as come into the possession of such Servicer from time to time.
The Depositor shall use reasonable efforts to cause Accredited, with
respect to the Accredited Mortgage Loans and the Sponsor, with respect to each
Bulk Mortgage Loan, to deliver to the applicable Servicer copies of all trailing
documents required to be included in the Custodial File at the same time the
original or certified copies thereof are delivered to the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, including but
not limited to such documents as the title insurance policy and any other
Mortgage Loan Documents upon return from the public recording office. The
Depositor shall use reasonable efforts to cause Accredited, with respect to the
Accredited Mortgage Loans and the Sponsor, with respect to each Bulk Mortgage
Loan, to deliver such documents at the expense of Accredited or the Sponsor, as
applicable, pursuant to the Accredited Agreements or the Bulk Agreements, as
applicable to such Servicer.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a) Saxon
hereby makes the representations and warranties set forth in Schedules II and
II-A hereto to the Depositor, the Master Servicer, the Securities Administrator
and the Trustee. ▇▇▇▇▇ Fargo Servicer hereby makes the representations and
warranties set forth in Schedule IV hereto to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee, as of the dates set
forth in such Schedule. Countrywide Servicing hereby makes the representations
and warranties set forth in Schedule V hereto to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee as of the dates set forth
in such Schedule.
(b) ▇▇▇▇▇ Fargo in its capacity as a Custodian hereby makes the
representations and warranties set forth in Schedule VI hereto to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee, as of the
dates set forth in such Schedule. LaSalle in its capacity as a Custodian hereby
makes the representations and warranties set forth in Schedule VII hereto to the
Depositor, the Master Servicer, the Securities Administrator and the Trustee, as
of the dates set forth in such Schedule.
(c) The Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to the Master Servicer, the Securities
Administrator and the Trustee as of the dates set forth in such Schedule.
(d) Upon the Depositor's discovery of or receipt of notice of a
breach of a representation and warranty of Accredited pursuant to the Accredited
Agreements that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan and that has not been cured, repurchased
or substituted for by Accredited in accordance with the terms of the Accredited
Agreements, the Depositor shall have the option, exercisable in its sole
discretion, to repurchase such Mortgage Loan (a "Deleted Mortgage Loan") at the
Repurchase Price, or, if permitted hereunder, substitute a Substitute Mortgage
Loan for such Mortgage Loan. The Trustee or applicable Custodian shall promptly
deliver to the Depositor or its designee the related Mortgage File in accordance
with the Servicer's direction in a Request for Release and, upon delivery from
the Depositor of a copy of the Request for Release certifying repurchase, the
Trustee shall assign to the Depositor all of its rights with respect to
Accredited's breach, under this Agreement, which assignment shall be evidenced
by a writing prepared by the Depositor and executed by the Trustee in favor of
the Depositor, without recourse, representation or warranty.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the parties to this Agreement of a
breach of any of the foregoing representations and warranties that materially
and adversely affect the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the party discovering such breach
shall give prompt written notice to the other parties.
(f) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth on
Schedule III hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan. Within 90 days of the earlier of discovery by the Depositor or receipt of
notice by the Depositor of the breach of a representation and warranty set forth
in the Accredited Assignment Agreement (with respect to the Accredited Mortgage
Loans), that (1) materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan and (2) has not been cured, repurchased
or substituted for by Accredited in accordance with the terms of the Accredited
Agreements, (i) the Depositor shall, within the time period permitted therefor
under such agreement take such action described in Section 5 of the Accredited
Assignment Agreement in respect of such Mortgage Loan, as if the Depositor were
Accredited, and (ii) the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, shall promptly deliver to the Depositor or its
designee the related Mortgage File in accordance with the applicable Servicer's
direction in a Request for Release and, upon receipt of a copy of the Request
for Release, the Trustee shall assign to the Depositor any and all of its rights
with respect to such Originator's breach under this Agreement or the Accredited
Agreements, as applicable, which assignment shall be evidenced by a writing
prepared by the Depositor and executed by the Trustee in favor of the Depositor,
without recourse, representation or warranty. Any obligation of the Depositor
under this subsection shall terminate upon receipt by the Trustee of a
confirmation from each Rating Agency that such termination will not cause a
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by any Rating Agency.
(g) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's (in its custodial capacity) or the
applicable Custodian's review of the related Custodial File, the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, shall notify
Accredited with respect to the Accredited Mortgage Loans (or the Depositor with
respect to each Bulk Mortgage Loan), the applicable Servicer, the Trustee and
the Depositor by delivery of the certification of such Custodian or the Trustee
(in its custodial capacity), required by Section 2.02 to such parties, which
shall be a request that Accredited, with respect to the Accredited Mortgage
Loans (or the Depositor with respect to each Bulk Mortgage Loan) correct or cure
such defect as required under this Agreement or the Accredited Agreements, as
applicable, and if such Originator or the Depositor, as applicable, fails or is
unable to correct or cure the defect within the period set forth in this
Agreement or the Accredited Agreements, as applicable, the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, shall notify the
Depositor and the Trustee of such failure to correct or cure by delivery of a
final Document Certification and Exception Report delivered within 180 days
after the Closing Date. Unless otherwise directed by the Depositor within five
(5) Business Days after notifying the Depositor and the Trustee of such failure
by Accredited, with respect to the Accredited Mortgage Loans, or the Depositor,
as applicable, to correct or cure, the Trustee shall notify Accredited, with
respect to the Accredited Mortgage Loans (or the Depositor with respect to each
Bulk Mortgage Loan) to repurchase the Mortgage Loan at the Repurchase Price or,
if permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan, in each case, pursuant to the terms of this Agreement, as applicable. If,
within ten (10) Business Days of receipt of such notice by Accredited, with
respect to the Accredited Mortgage Loans, or the Depositor, as applicable,
Accredited, with respect to the Accredited Mortgage Loans, or the Depositor, as
applicable, fails to repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such failure. The Trustee shall pursue all legal remedies available
to the Trustee against Accredited, with respect to the Accredited Mortgage
Loans, or the Depositor, as applicable, under this Agreement, the Accredited
Agreements or the Representations and Warranties Agreement, as applicable, if
the Trustee has received written notice from the Depositor directing the Trustee
to pursue such remedies.
(h) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor under this Agreement, that
materially and adversely affects the value of any Mortgage Loan or the interests
of the Trustee or the Certificateholders therein, the party discovering such
breach shall give prompt written notice thereof (identifying, by section
reference the representation or warranty breached) to the other parties.
(i) With respect to any Substitute Mortgage Loan or Loans
substituted by the Sponsor or the Depositor, the Sponsor or the Depositor, as
applicable, shall deliver to the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related Assignment of Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01.
With respect to any Substitute Mortgage Loan or Loans substituted by Accredited,
the Depositor shall use reasonable efforts to cause Accredited to deliver to the
Trustee (in its custodial capacity) for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related Assignment of Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01.
Notwithstanding anything to the contrary set forth in this Agreement, no
substitution under this Agreement is permitted to be made (a) in any calendar
month after the Determination Date for such month or (b) if the substitution
were to be made on or after the second anniversary of the Closing Date.
Scheduled Payments due with respect to Substitute Mortgage Loans in the Due
Period of substitution shall not be part of the Trust Fund and will be retained
by the Depositor on the next succeeding Distribution Date. For the Due Period of
substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the
Sponsor or the Depositor, as applicable, shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
(j) Based upon information provided by the Depositor or the
applicable Originator, as applicable, the applicable Servicer shall include
information regarding the removal of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans in its Servicer Remittance
Report delivered to the Master Servicer pursuant to Section 4.03(e) (with copies
to the Trustee or the applicable Custodian, as applicable) for the Determination
Date immediately following the receipt of such information (or, in the case of
▇▇▇▇▇ Fargo Servicer, for the Determination Date that occurs in the calendar
month immediately following the receipt of such information), to the extent such
information is required to be included in the Servicer Remittance Report. Upon
such substitution, the Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and, if the substitution is made by the
Sponsor or the Depositor, as applicable, the Sponsor or the Depositor, as
applicable, shall be deemed to have made with respect to such Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to the Representations and Warranties Agreement with
respect to such Substitute Mortgage Loan. Upon receipt of a Request for Release
in connection with any such substitution and certification by the applicable
Servicer to the Trustee (in its custodial capacity) or the applicable Custodian,
as applicable, that the deposit into the applicable Collection Account of the
amount required to be deposited therein in connection with such substitution as
described in Section 2.03(l), the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, shall release the Mortgage File held for
the benefit of the Certificateholders relating to such Deleted Mortgage Loan to
the Depositor or Sponsor, as applicable, and the Trustee shall execute and
deliver at the direction of the Depositor, such instruments of transfer or
assignment prepared by the Depositor or the Sponsor, as applicable, in each case
without recourse, representation or warranty, as shall be necessary to vest
title in the Depositor or the Sponsor, as applicable, of the Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
(k) For any month in which the Sponsor or the Depositor substitutes
one or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the applicable Servicer will determine the amount (if any) by which the
aggregate unpaid principal balance of all such Substitute Mortgage Loans as of
the date of substitution is less than the aggregate unpaid principal balance of
all such Deleted Mortgage Loans. The amount of such shortage, plus an amount
equal to the sum of (i) any accrued and unpaid interest on the Deleted Mortgage
Loans and (ii) all unreimbursed Servicing Advances with respect to such Deleted
Mortgage Loans, or the amount of any similar shortage with respect to a
Substitute Mortgage Loan substituted by the Depositor under this Agreement
(collectively, the "Substitution Adjustment Amount"), shall be deposited into
the applicable Collection Account of the related Servicer by the Sponsor or the
Depositor on or before the Distribution Account Deposit Date for the
Distribution Date following the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder. The
Depositor or the Sponsor shall use reasonable efforts to cause Accredited to
remit to the applicable Servicer for deposit into the related Collection Account
any Substitution Adjustment Amount on or before the Distribution Account Deposit
Date for the Distribution Date following the Prepayment Period during which the
related Mortgage Loan became required to be purchased or replaced hereunder.
(l) Any Mortgage Loan repurchased pursuant to this Section 2.03 will
be removed from the Trust Fund. The applicable Servicer shall include
information regarding such repurchase in its Servicer Remittance Report
delivered to the Master Servicer pursuant to Section 4.03(e) (with copies to the
Trustee and the applicable Custodian, as applicable), for the Determination Date
immediately following the receipt of information regarding such repurchase (or,
in the case of ▇▇▇▇▇ Fargo, for the Determination Date that occurs in the
calendar month immediately following the receipt of such information), to the
extent such information is required to be included in the Servicer Remittance
Report. For purposes of determining the applicable Repurchase Price, any such
repurchase shall occur or shall be deemed to occur as of the last day of the
applicable Prepayment Period.
(m) In the event that any Mortgage Loan shall have been repurchased
pursuant to this Agreement or the Representations and Warranties Agreement, the
Repurchase Price therefor shall be deposited by the applicable Servicer in the
applicable Collection Account of the related Servicer pursuant to Section 3.10
on or before the Distribution Account Deposit Date for the Distribution Date
following the Prepayment Period during which such Mortgage Loan was repurchased
and upon such deposit of the Repurchase Price and receipt of a Request for
Release in the form of Exhibit J hereto, indicating such deposit, the Trustee or
the applicable Custodian, as applicable, shall release) the related Custodial
File held for the benefit of the Certificateholders to such Person as directed
by the applicable Servicer, and the Trustee shall execute and deliver at such
Person's direction such instruments of transfer or assignment prepared by such
Person, in each case without recourse, representation or warranty, as shall be
necessary to transfer title from the Trustee..
(n) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement and Accredited under the
Accredited Agreement, to cure, repurchase or substitute any Mortgage Loan as to
which a breach of a representation and warranty has occurred and is continuing,
together with any related indemnification obligations set forth herein, shall
constitute the sole remedies against such Persons respecting such breach
available to Certificateholders, the Depositor (if applicable), the Securities
Administrator or the Trustee on their behalf.
(o) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by Accredited pursuant to the Accredited
Agreements, the party discovering such breach shall give prompt written notice
thereof to the other parties to this Agreement or Accredited, as applicable. The
Trustee shall pursue such legal remedies available to the Trustee with respect
to such breach under the Accredited Agreements, as may be necessary or
appropriate to enforce the rights of the Trust with respect thereto, if the
Trustee has received written notice from the Depositor directing the Trustee to
pursue such remedies.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee (in its custodial capacity) or the
applicable Custodian, as applicable, for the benefit of the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized Denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular
interests in each Trust REMIC is the Distribution Date occurring in July 2037,
which is the Distribution Date in the month following the month in which the
latest maturity date of any Mortgage Loan occurs. Amounts distributable to the
Class X Certificates (prior to any reduction for any Basis Risk Payment,
Upper-Tier CarryForward Amount, Net Swap Payment or Swap Termination Payment),
exclusive of any amounts received from the Swap Provider or the Cap Provider,
shall be deemed paid from the Upper-Tier REMIC to the Class X REMIC in respect
of the Class UT-X Interest and the Class UT-IO Interest and then from the Class
X REMIC in respect of the Class X Interest and the Class IO Interest to the
Holders of the Class X Certificates prior to distribution of any Basis Risk
Payments or Upper-Tier CarryForward Amounts to the Offered Certificates and Net
Swap Payments or Swap Termination Payments to the Swap Provider. For federal
income tax purposes, any amount distributed on the Offered Certificates on any
Distribution Date in excess of the amount distributable on their Corresponding
Class of Upper-Tier Regular Interest on such Distribution Date shall be treated
as having been paid from the Excess Reserve Fund Account or the Swap Account, as
applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the amount
distributable on the Corresponding Class of Offered Certificates on such
Distribution Date shall be treated as having been paid to the Swap Account, all
pursuant to and as further provided in Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Master
Servicer, the Securities Administrator and the Servicers that as of the date of
this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 12.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee or the applicable Custodian, as
applicable, and shall inure to the benefit of the Trustee.
Section 2.07 Enforcement of Obligations for Breach of Mortgage Loan
Representations. Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Sponsor pursuant to the Representations
and Warranties Agreement, the party discovering such breach shall give prompt
written notice thereof to the other parties to this Agreement and the Sponsor.
The Trustee shall pursue such legal remedies available to the Trustee with
respect to such breach under the Representations and Warranties Agreement, as
may be necessary or appropriate to enforce the rights of the Trust with respect
thereto, in accordance with customary industry practices as if such asset were
its own property.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans for which it is acting as Servicer in accordance with the terms
of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, each Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable Servicer believes it appropriate in its best
judgment in accordance with Accepted Servicing Practices, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the applicable Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement. Each Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee or the
applicable Custodian, as applicable, shall execute, at the written request of a
Servicer, and furnish to such Servicer and any Subservicer such documents
provided to the Trustee or the applicable Custodian, as applicable, as are
necessary or appropriate to enable such Servicer or any Subservicer to carry out
its servicing and administrative duties hereunder, and the Trustee hereby grants
to each Servicer, and this Agreement shall constitute, a power of attorney to
carry out such duties, including a power of attorney in the form of Exhibit P
hereto to take title to Mortgaged Properties after foreclosure in the name of
and on behalf of the Trustee. The Trustee shall execute a separate power of
attorney in favor of each Servicer for the purposes described herein to the
extent necessary or desirable to enable each Servicer to perform its duties
hereunder. The Trustee shall not be liable for the actions of any Servicer or
any Subservicers under such powers of attorney. Notwithstanding anything
contained herein to the contrary, no Servicer or Subservicer shall without the
Trustee's consent: (i) initiate any action, suit or proceeding solely under the
Trustee's name without indicating such Servicer's or Subservicer's, as
applicable, representative capacity, or (ii) take any action with the intent to,
or which actually does cause, the Trustee to be registered to do business in any
state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first-instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit, provided however, notwithstanding the
foregoing, the applicable Servicer may add to the unpaid principal balance of
any such Mortgage Loan the amount of any Servicing Advances made by the
applicable Servicer pursuant to this Section 3.01 in connection with any
modification of a defaulted Mortgage Loan pursuant to this Section 3.01.
(c) Notwithstanding anything in this Agreement to the contrary, a
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01 and except for Servicing Advances) and none
of the Servicers shall, except with respect to any Mortgage Loan in default or,
which in the judgment of the applicable Servicer, a default is reasonably
foreseeable, (i) permit any modification with respect to any Mortgage Loan that
would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (except for a reduction of interest payments
resulting from the application of the Servicemembers Civil Relief Act or any
similar state statutes) or (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup
date" under the REMIC Provisions, (iii) except as provided in Section 3.07(a),
waive any Prepayment Charges, or (iv) accept payment from the related Mortgagor
of an amount less than the unpaid principal balance of such Mortgage Loan in
final satisfaction thereof, if in such Servicer's determination such action is
not materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action).
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the applicable Servicer shall be entitled to waive any such provisions on behalf
of the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
(f) Notwithstanding anything to the contrary contained in Sections
3.02(a), 3.02(d), 3.02(e), 3.03, 3.22, 3.23, 4.03(e), 6.02, 8.12 and 12.14, the
obligations of Countrywide Servicing with respect to Regulation AB and the
Countrywide Serviced Mortgage Loans shall be solely as set forth in the
Countrywide Amendment Regulation AB with respect to the servicing of the
Countrywide Serviced Mortgage Loans; provided that Countrywide Servicing hereby
agrees to provide to the Master Servicer any statements of compliance,
assessments of compliance, accountants reports on assessment of compliance and
any Sarbanes Certifications (as defined in the Countrywide Amendment Regulation
AB) that Countrywide Servicing is required to deliver to the Depositor pursuant
to the Countrywide Amendment Regulation AB, Sections 2(d), (e) and (f), at the
time such documents are provided to the Depositor.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). Each Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The applicable Servicer shall give
notice to the Depositor and the Master Servicer of any such Subservicer and
Subservicing Agreement, which notice shall contain all information (including
without limitation a copy of the Subservicing Agreement) reasonably necessary to
enable the Securities Administrator, pursuant to Section 8.12(g), to accurately
and timely report the event under Item 6.02 of Form 8-K pursuant to the Exchange
Act (if such reports under the Exchange Act are required to be filed under the
Exchange Act). No Subservicing Agreement shall be effective until 30 days after
such written notice is received by both the Depositor and the Master Servicer.
The Master Servicer shall not be required to review or consent to such
Subservicing Agreements and shall have no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement to which it is a party
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
Each Servicer and the respective Subservicers may enter into and make amendments
to the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee, the Master Servicer and the Depositor copies of all Subservicing
Agreements, and any amendments or modifications thereof, promptly upon such
Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor, the Master
Servicer and the Trustee to comply with the provisions of this Section 3.02 and
with Sections 3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as
if such Subservicer were such Servicer, and to provide the information required
with respect to such Subservicer under Section 8.12 of this Agreement. Such
Servicer shall be responsible for obtaining from each such Subservicer and
delivering to applicable Persons any servicer compliance statement required to
be delivered by such Subservicer under Section 3.22 and any assessment of
compliance report and related accountant's attestation required to be delivered
by such Subservicer under Section 3.23, in each case as and when required to be
delivered.
(e) Subject to the conditions set forth in this Section 3.02(e),
each Servicer and any Subservicer engaged by such Servicer is permitted to
utilize one or more Subcontractors to perform certain of its obligations
hereunder. Such Servicer shall promptly upon request provide to the Depositor or
the Master Servicer a written description (in form and substance satisfactory to
the Depositor) of the role and function of each Subcontractor utilized by such
Servicer or any such Subservicer, specifying, no later than the date specified
for delivery of the annual report on assessment of compliance set forth in
Section 3.23(b), (i) the identity of each such Subcontractor, if any, that is
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (ii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (i) of this paragraph. As a condition to the utilization by
such Servicer or any such Subservicer of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, such Servicer shall cause any such Subcontractor used by such
Servicer (or by any such Subservicer) for the benefit of the Depositor, the
Master Servicer and the Trustee to comply with the provisions of Section 3.23 of
this Agreement to the same extent as if such Subcontractor were such Servicer.
Such Servicer shall be responsible for obtaining from each such Subcontractor
and delivering to the applicable Persons any assessment of compliance report and
related accountant's attestation required to be delivered by such Subcontractor
under Section 3.23, in each case as and when required to be delivered.
Notwithstanding the foregoing, if a Servicer engages a Subcontractor
in connection with the performance of any of its duties under this Agreement,
such Servicer shall be responsible for determining whether such Subcontractor is
a "servicer" within the meaning of Item 1101 of Regulation AB and whether any
such affiliate or third-party vendor meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB. If a Servicer determines, pursuant to the
preceding sentence, that such Subcontractor is a "servicer" within the meaning
of Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB, then such Subcontractor shall be deemed to be a
Subservicer for purposes of this Agreement, the engagement of such Subservicer
shall not be effective unless and until notice is given pursuant to Section
3.02(a) and such Servicer shall comply with Section 3.02(d) with respect
thereto.
Section 3.03 Successor Subservicers. Each Servicer shall be entitled
to terminate any Subservicing Agreement to which such Servicer is a party and
the rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement; provided, however, that the termination, resignation or removal of a
Subservicer shall not be effective until 30 days after written notice is
received by the Depositor and the Master Servicer that contains all information
reasonably necessary to enable the Securities Administrator, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act). In the event of termination of any
Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the applicable Servicer party to the related Subservicing
Agreement without any act or deed on the part of such Subservicer or such
Servicer, and such Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Master Servicer
without fee, in accordance with the terms of this Agreement, in the event that
the Servicer who is party to the related Subservicing Agreement shall, for any
reason, no longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers, the
Master Servicer and the Trustee. Any Subservicing Agreement that may be entered
into and any transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be between the
Subservicer and the related Servicer alone, and neither the Trustee nor the
Master Servicer (or any other successor to such Servicer) shall be deemed a
party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
Each Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether such Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Master Servicer. In the event a Servicer at any time shall for any reason no
longer be a Servicer (including by reason of the occurrence of an Event of
Default), the Master Servicer, or its designee, or the successor servicer if the
successor is not the Master Servicer, shall thereupon assume all of the rights
and obligations of such Servicer under each Subservicing Agreement that such
Servicer may have entered into, with copies thereof provided to the Master
Servicer, or the successor servicer if the successor is not the Master Servicer,
prior to the Master Servicer, or the successor servicer if the successor is not
the Master Servicer, assuming such rights and obligations, unless the Master
Servicer elects to terminate any Subservicing Agreement in accordance with its
terms as provided in Section 3.03.
Upon such assumption, the Master Servicer shall be deemed, subject
to Section 3.03, to have assumed all of such Servicer's interest therein and to
have replaced such Servicer as a party to each Subservicing Agreement to which
the predecessor servicer was a party to the same extent as if each Subservicing
Agreement had been assigned to the assuming party, except that (i) such Servicer
shall not thereby be relieved of any liability or obligations under any such
Subservicing Agreement that arose before it ceased to be a Servicer and (ii)
none of the Depositor, the Master Servicer, the Trustee, their designees or any
successor to such Servicer shall be deemed to have assumed any liability or
obligation of such Servicer that arose before it ceased to be a Servicer.
Each Servicer at its expense shall, upon request of the Master
Servicer deliver to the assuming party all documents and records relating to
each Subservicing Agreement to which it is a party and the Mortgage Loans then
being serviced by it and an accounting of amounts collected and held by or on
behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) Each
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, each Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the Due Dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the applicable Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which such Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding anything in this Agreement
to the contrary, a Servicer may waive, or permit a Subservicer to waive, in
whole or in part, a Prepayment Charge only under the following circumstances:
(i) such waiver relates to a default or a reasonably foreseeable default and
would, in the reasonable judgment of such Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Mortgage Loan, provided, however, that the applicable Servicer or Subservicer
may (and with respect to any Group I Mortgage Loan shall) waive such Prepayment
Charge if the Mortgage Loan is accelerated or paid-off in connection with the
workout of a delinquent Mortgage Loan or due to the related Mortgagor's default,
notwithstanding that the terms of the Mortgage Loan or federal or state law
might permit the imposition of such Prepayment Charge, (ii) such Prepayment
Charge is not permitted to be collected by applicable federal, state or local
law or regulation or (iii) the collection of such Prepayment Charge would be
considered "predatory" pursuant to written guidance published or issued by any
applicable federal, state or local regulatory authority acting in its official
capacity and having jurisdiction over such matters. If a Prepayment Charge is
waived other than as permitted by the prior sentence, then the applicable
Servicer is required to pay the amount of such waived Prepayment Charge, for the
benefit of the Holders of the Class P Certificates, by depositing such amount
into the related Collection Account together with and at the time that the
amount prepaid on the related Mortgage Loan is required to be deposited into the
related Collection Account; provided, however, that the applicable Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Mortgage Loan Schedule in effect at such time.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and any Interest Rate Cap Payments and to secure
their limited recourse obligation to pay to the Offered Certificateholders Basis
Risk CarryForward Amounts (prior to using any Net Swap Receipts). For the
avoidance of doubt, any Basis Risk CarryForward Amounts shall be paid to the
Offered Certificates first from the Excess Reserve Fund Account and then from
the Swap Account.
(ii) On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment made for the benefit of the
Certificateholders and any Interest Rate Cap Payments made for the benefit
of the Offered Certificates for such date into the Excess Reserve Fund
Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Securities Administrator
shall (1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(Q), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in clause
(iii) in the definition thereof) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(P)) and (y) the aggregate
Basis Risk CarryForward Amounts for such Distribution Date and (2) withdraw from
the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments, along
with payments from the Swap Account, shall be allocated to those Classes on a
pro rata basis based upon the amount of Basis Risk CarryForward Amount owed to
each such Class and shall be paid in the priority set forth in Sections
4.02(a)(iii)(R) and (S).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of the Grantor Trust and not an asset of
any Trust REMIC. The beneficial owners of the Excess Reserve Fund Account
are the Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper-Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Securities Administrator to the
Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Securities
Administrator to the Offered Certificateholders shall be accounted for by
the Securities Administrator as amounts paid first to the Holders of the
Class X Certificates and then to the respective Class or Classes of
Offered Certificates. In addition, the Securities Administrator shall
account for the Offered Certificateholders" rights to receive payments of
Basis Risk CarryForward Amounts (along with payments of Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward
Amounts from the Swap Account) and the obligation to pay Class IO
Shortfalls as rights and obligations under a notional principal contract
between the Class X Certificateholders and the Holders of the Offered
Certificates.
(iv) Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any payments from
the Excess Reserve Fund Account except as expressly set forth in this
Section 3.07(c) and Sections 4.02(a)(iii)(R), (S) and (U).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Depositor shall
cause to be deposited into the Distribution Account on the Closing Date the
Closing Date Deposit Amount. The Master Servicer shall, promptly upon receipt,
deposit in the Distribution Account and the Securities Administrator shall
retain therein the following:
(i) the aggregate amounts remitted by the Servicers to the Master
Servicer pursuant to Section 3.11;
(ii) any amounts deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted, it may at any time direct the Master Servicer in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Master Servicer which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account shall
be held by the Securities Administrator in trust for the Certificateholders
until disbursed in accordance with this Agreement or withdrawn in accordance
with Section 4.02.
(e) 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 to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
(f) The Securities Administrator may invest the funds in the
Distribution Account, in one or more Permitted Investments, in accordance with
Section 3.12. Each Servicer shall direct the Master Servicer to instruct the
Securities Administrator to withdraw from the Distribution Account and to remit
to such Servicer no less than monthly, all income and gain realized from the
investment of the portion of funds deposited in the Distribution Account by such
Servicer (except during the Master Servicer Float Period). The Securities
Administrator may withdraw from the Distribution Account any income or gain
earned from the investment of funds deposited therein during the Master Servicer
Float Period for compensation to the Master Servicer.
(g) Each Servicer shall give notice to the Master Servicer, and the
Master Servicer shall give notice to each Rating Agency and the Depositor of any
proposed change of the location of the related Collection Account within a
reasonable period of time prior to any change thereof.
(h) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, the Trustee is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Trustee. Accordingly, each of the parties agrees
to provide to the Trustee upon its request from time to time such party's
complete name, address, tax identification number and such other identifying
information together with copies of such party's constituting documentation,
securities disclosure documentation and such other identifying documentation as
may be available for such party.
(i) On or prior to the Determination Date, each Custodian shall
deliver an invoice to the Master Servicer, setting forth the amount of each
Custodian Fee for the related Distribution Date. On each Distribution Date, the
Master Servicer shall remit each Custodian Fee to the applicable Custodian from
the Master Servicer's own funds.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
related Servicer. The Subservicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the related Collection Account of the applicable
Servicer or remit such proceeds to such Servicer for deposit in the related
Collection Account of such Servicer not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, such Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by such
Servicer. Each Tax Service Contract shall be assigned to the Master Servicer, or
a successor Servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
Each Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day (or two Business Days in
the case of Saxon) after such Servicer's receipt thereof, all collections from
the Mortgagors (or related advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums and comparable items for the account of
the Mortgagors ("Escrow Payments") collected on account of the Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Escrow Accounts, in no
event more than two Business Days (or one Business Day in the case of Saxon)
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse such Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of such Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; or (vii) recover amounts deposited in error. As part of its
servicing duties, each Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the applicable Servicer shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The applicable
Servicer assumes full responsibility for the payment of all such bills within
such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee, each
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day (or two Business Days in the case of Saxon) after
such Servicer's receipt thereof, and shall thereafter deposit in the related
Collection Account, in no event more than two Business Days (or one Business Day
in the case of Saxon) after the deposit of such funds into the clearing account,
as and when received or as otherwise required hereunder, the following payments
and collections received or made by it subsequent to the Cut-off Date (other
than in respect of principal or interest on the related Mortgage Loans due on or
before the Cut-off Date), or payments (other than Principal Prepayments)
received by it on or prior to the Cut-off Date but allocable to a Due Period
subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Master Servicer of the location of the related
Collection Account maintained by it when established and prior to any change
thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Master
Servicer all Available Funds (without reduction for amounts owed to the
Depositor, the Securities Administrator, the Master Servicer, the Trustee
or the Custodians as provided for in the definition of "Available Funds")
in respect of the related Distribution Date together with all amounts
representing Prepayment Charges from the Mortgage Loans received by the
applicable Servicer during the related Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by such Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by such
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (such Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in its Collection Account and to withdraw
any net Prepayment Interest Excesses in accordance with Section 3.21(b);
(v) to pay to the Depositor, Accredited or the Sponsor, as
applicable, with respect to each Mortgage Loan that has previously been
repurchased or replaced pursuant to this Agreement, the Accredited
Agreements or the Representations and Warranties Agreement, as applicable,
all amounts received thereon subsequent to the date of purchase or
substitution, as further described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or Servicing
Advance previously made which such Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(vii) to pay, or to reimburse such Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan serviced by
such Servicer pursuant to Section 3.15 (such Servicer's right for recovery
or reimbursement has priority over the Trust);
(viii) to reimburse the Master Servicer, such Servicer or the
Depositor for expenses incurred by or reimbursable to the Master Servicer,
such Servicer or the Depositor, as the case may be, pursuant to Section
6.03 (such Servicer's right for recovery or reimbursement has priority
over the Trust as stated in the definition of "Available Funds");
(ix) to reimburse the Master Servicer, such Servicer or the Trustee,
as the case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the repurchase obligation of the
Depositor, Accredited or the Sponsor, as applicable, that were included in
the Repurchase Price of the Mortgage Loan, including any expenses arising
out of the enforcement of the repurchase obligation, to the extent not
otherwise paid pursuant to the terms of this Agreement, the Accredited
Agreements or the Representations and Warranties Agreement, as applicable
(such Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Master Servicer on the Remittance
Date occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement.
To the extent that a Servicer does not timely make the remittance
referred to in clause (i) above, such Servicer shall pay the Master Servicer for
the account of the Master Servicer interest on any amount not timely remitted at
the Prime Rate, from and including the applicable Remittance Date to but
excluding the date such remittance is actually made.
(b) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Master Servicer, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and reconciling
the applicable Collection Account in accordance with Accepted Servicing
Practices. Each Servicer shall act promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) Each Servicer may invest the funds in the related
Collection Account and the related Escrow Account (to the extent permitted by
law and the related Mortgage Loan documents) and the Securities Administrator
may (but is not obligated to) invest funds in the Distribution Account during
the Master Servicer Float Period, and, with respect to the portion of funds in
the Distribution Account deposited by a Servicer, shall (except during the
Master Servicer Float Period) invest such funds in the Distribution Account at
the direction of such Servicer in the ▇▇▇▇▇ Fargo Advantage Prime Investments
Money Market Fund (for purposes of this Section 3.12, such Accounts are referred
to as an "Investment Account"), in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand no later
than the Business Day immediately preceding the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement; provided,
however, that the Securities Administrator shall have no obligation to invest
funds deposited into the Distribution Account by a Servicer on the Remittance
Date later than 10:00 a.m. (Pacific Standard Time). If no investment instruction
is given in a timely manner, the Securities Administrator shall hold the funds
in the Distribution Account uninvested. All such Permitted Investments shall be
held to maturity, unless payable on demand. Any investment of funds in an
Investment Account (other than investments made during the Master Servicer Float
Period) shall be made in the name of the Securities Administrator in Permitted
Investments selected by the applicable Servicer. The applicable Servicer shall
be entitled to the income from such related investment (except with respect to
investment direction of funds and any income and gain realized on any investment
in the Distribution Account during the Master Servicer Float Period, which shall
be for the sole benefit of the Securities Administrator) and any certificate or
other instrument evidencing any such investment shall be delivered directly to
the applicable Servicer, or with respect to investments during the Master
Servicer Float Period, the Securities Administrator or its agent (with a copy to
the Securities Administrator or its agent if related to investment of funds in
the Distribution Account not during the Master Servicer Float Period), together
with any document of transfer necessary to transfer title to such investment to
the applicable Servicer, or with respect to investments during the Master
Servicer Float Period, the Securities Administrator or its agent. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the applicable Servicer, or with respect
to investments during the Master Servicer Float Period, the Securities
Administrator may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the portion
of funds deposited in the Distribution Account by a Servicer and held by the
Securities Administrator, shall be for the benefit of such Servicer (except for
any income or gain realized from the investment of funds on deposit in the
Distribution Account during the Master Servicer Float Period, which shall be for
the benefit of the Securities Administrator) and shall be subject to the
Securities Administrator's withdrawal in the manner set forth in Section
3.07(e). Each Servicer shall deposit in the Distribution Account (except with
respect to losses incurred during the Master Servicer Float Period) the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Securities Administrator shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator shall not be liable for the amount
of any loss incurred with respect of any investment or lack of investment of
funds held in any Investment Account or the Distribution Account (except that if
any losses are incurred from the investment of funds deposited in the
Distribution Account during the Master Servicer Float Period, the Securities
Administrator shall be responsible for reimbursing the Trust for such loss
immediately upon realization of such loss) if made in accordance with this
Section 3.12.
(f) The Securities Administrator or its Affiliates shall be
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator's economic self-interest for (i) serving as investment
adviser, administrator, shareholder, servicing agent, custodian or sub custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Master Servicer, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit; provided however, notwithstanding the
foregoing, the applicable Servicer may add to the unpaid principal balance of
any such Mortgage Loan the amount of any Servicing Advances made by the
applicable Servicer pursuant to this Section 3.13 in connection with any
modification of a Mortgage Loan, pursuant to Section 3.01. Notwithstanding any
other provision of this Agreement, the amount of any such addition to the unpaid
principal balance of such a Mortgage Loan shall not be taken into account for
purposes of determining the WAC Cap, the Loan Group I Cap or the Loan Group II
Cap, as applicable, or the interest or principal entitlements of any Class of
Certificates and such amount shall be subsequently reduced by the amount of any
reimbursements to the applicable Servicer of such Servicing Advances pursuant to
Section 3.11(a)(iii). It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
the applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the applicable Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that any Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or
(ii) having a General Policy Rating of B:III or better from Best's (or such
other rating that is comparable to such rating) insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case such Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the Mortgage Loans, each
Servicer agrees to prepare and present, on behalf of itself and the Trustee
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Each Servicer shall provide the Master Servicer
upon request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee and the Master Servicer. Each Servicer
shall also cause each Subservicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee that any such substitution, modification
or assumption agreement has been completed and shall forward to the Trustee (in
its custodial capacity) or the applicable Custodian, as applicable, the executed
original of such substitution or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Securities Administrator,
taking into account, among other things, the timing of foreclosure proceedings;
provided, however, with respect to any Second Lien Mortgage Loan for which the
related first lien mortgage loan is not included in the Trust Fund, if, after
such Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged-off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Securities
Administrator, after reimbursement to itself for such expenses, and (ii) that
such expenses will be recoverable by such Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. Each Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the applicable
Servicer or any Subservicer for any related unreimbursed Servicing Advances,
pursuant to Section 3.11 or 3.17; second, to reimburse the applicable Servicer
for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which such amounts are to be distributed if
not in connection with a liquidation or REO Disposition; and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
applicable Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The
portions of the recovery so allocated to interest at the Mortgage Rate (net of
the Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied
as follows: first, to reimburse the applicable Servicer or any Subservicer for
any related unreimbursed Servicing Advances in accordance with Section 3.11 or
3.17, and second, to the Securities Administrator in accordance with the
provisions of Section 4.02, subject to Section 3.17(f) with respect to certain
excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed-in-lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee or the Master Servicer otherwise requests,
such Servicer shall cause an environmental inspection or review of such
Mortgaged Property to be conducted by a qualified inspector. Upon completion of
the inspection, such Servicer shall promptly provide the Trustee, the Master
Servicer and the Depositor with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices how such
Servicer shall proceed with respect to the Mortgaged Property. In the event (a)
the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the applicable
Servicer determines, consistent with Accepted Servicing Practices, to proceed
with foreclosure or acceptance of a deed-in-lieu of foreclosure, such Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed-in-lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.11. In the event the applicable
Servicer determines not to proceed with foreclosure or acceptance of a
deed-in-lieu of foreclosure, such Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the
applicable Servicer pursuant to this paragraph or otherwise.
In the event any Servicer elects to charge-off a Second Lien
Mortgage Loan 180 days or more delinquent pursuant to this Section 3.15, no
Second Lien Mortgage Loan shall be characterized as a Liquidated Mortgage Loan,
unless the Depositor consents in writing to such characterization after such
Servicer has provided the Depositor with a combined equity analysis of such
Second Lien Mortgage Loan and the related first lien mortgage loan; provided,
that if the Depositor has failed to notify such Servicer within 3 Business Days
of receipt of such combined equity analysis, then the Depositor shall be deemed
to have consented to such characterization. In the event such Servicer elects to
charge-off a Second Lien Mortgage Loan 180 days or more delinquent pursuant to
this Section 3.15, such Servicer shall notify the Master Servicer of such
election, which notice may be provided in a Servicer Remittance Report delivered
pursuant to Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, the applicable Servicer will deposit all amounts received
in connection with such payment which are required to be deposited in the
related Collection Account pursuant to Section 3.10 and shall request delivery
to it of the Custodial File by submitting a Request for Release (in writing or
an electronic format acceptable to the Trustee and the applicable Custodian, as
applicable) to the Trustee and the applicable Custodian, as applicable. Upon
receipt of such Request for Release, the Trustee (in its custodial capacity) or
the applicable Custodian, as applicable, shall promptly release the related
Custodial File to such Servicer within five (5) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Collection Account or to the
Trustee.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, shall, upon
request of a Servicer and delivery to the Trustee and the applicable Custodian,
as applicable, of a Request for Release in written or electronic form release
the related Custodial File to such Servicer, and the Trustee shall, at the
direction of such Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and such Servicer shall retain the Mortgage
File in trust for the benefit of the Trustee. Such Request for Release shall
obligate the applicable Servicer to return each and every document previously
requested from the Custodial File to the Trustee (in its custodial capacity) or
the applicable Custodian, as applicable, when the need therefor by such Servicer
no longer exists, unless the Mortgage Loan has been charged-off or liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the related Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and such Servicer has delivered to the Trustee and the
applicable Custodian, as applicable, a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was charged-off or liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the related Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, to the applicable Servicer or its designee upon
request therefor. Upon receipt of a Request for Release under this Section 3.16,
the Trustee (in its custodial capacity) or the applicable Custodian, as
applicable, shall deliver the related Custodial File to the requesting Servicer;
provided, however, that in the event a Servicer has not previously received
copies of the relevant Mortgage Loan Documents necessary to service the related
Mortgage Loan in accordance with Accepted Servicing Practices, the Depositor
shall reimburse the Trustee (in its custodial capacity) or the applicable
Custodian for any overnight courier charges incurred for the requested Custodial
Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the applicable Servicer copies of any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity, or shall exercise and deliver to such Servicer a power of attorney
sufficient to authorize such Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property
in the form of Exhibit P.
(b) Each Servicer shall manage, conserve, protect and operate each
related REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. Each Servicer, either itself or through an agent selected
by such Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. Each Servicer
shall attempt to sell the same (and may temporarily rent the same for a period
not greater than one year, except as otherwise provided below) on such terms and
conditions as such Servicer deems to be in the best interest of the Trustee. An
independent contractor, as the agent of Saxon, may be retained by Saxon to
perform functions relating to the title, management and disposition of REO
Property. Saxon shall be responsible for such independent contractor's fees and
expenses relating to a REO Property and shall be entitled to reimbursement
thereof from the Liquidation Proceeds with respect to the related Mortgaged
Property, as Servicing Advances or, if applicable, as Nonrecoverable Servicing
Advances. The Trustee shall have no obligations with respect to any REO
Dispositions.
(c) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the applicable Servicer as additional servicing compensation.
(g) Each Servicer shall use its reasonable best efforts to sell, or
cause its Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property serviced by such Servicer or Subservicer as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by Pooling-Tier REMIC-1 unless (i) such
Servicer applies for and receives an extension of such period from the Internal
Revenue Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in
which event such REO Property shall be sold within the applicable extension
period, or (ii) such Servicer obtains an Opinion of Counsel, addressed to the
Depositor, the Trustee, the Master Servicer and such Servicer, to the effect
that the holding by Pooling-Tier REMIC-1 of such REO Property subsequent to such
period will not result in the imposition of taxes on "prohibited transactions"
as defined in Section 860F of the Code or cause any Trust REMIC to fail to
qualify as a REMIC under the REMIC Provisions or comparable provisions of
relevant state laws at any time. Each Servicer shall manage, conserve, protect
and operate each REO Property serviced by such Servicer for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by Pooling-Tier REMIC-1
of any "income from non permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, the applicable Servicer shall either itself
or through an agent selected by such Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Trustee on behalf of the Certificateholders,
rent the same, or any part thereof, as such Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders for the period prior
to the sale of such REO Property; provided, however, that any rent received or
accrued with respect to such REO Property qualifies as "rents from real
property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled Payment on
the related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage Note.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Master Servicer such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments. Upon the discovery by a Servicer or
the receipt of notice from the Master Servicer that a Servicer has failed to
adjust a Mortgage Rate or Scheduled Payment in accordance with the terms of the
related Mortgage Note, such Servicer shall deposit in the related Collection
Account from its own funds the amount of any interest loss caused as such
interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
any Subservicer to provide, to the Depositor and the Trustee, and at the request
of the OTS or the FDIC and the examiners and supervisory agents thereof, access
to the documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. Such access shall be afforded without charge,
but only upon five (5) Business Days' prior written request and during normal
business hours at the offices of the applicable Servicer or any Subservicer.
Nothing in this Section shall derogate from the obligation of any such party to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of any such party to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Master Servicer for any funds received by such Servicer or which otherwise are
collected by such Servicer as Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan serviced by such Servicer.
All Mortgage Files and funds collected or held by, or under the control of, a
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including, but not
limited to, any funds on deposit in its Collection Account, shall be held by
such Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. Each Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in any Collection
Account, the Distribution Account or any Escrow Account, or any funds that
otherwise are or may become due or payable to the Securities Administrator for
the benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that such Servicer shall be entitled to set-off against and deduct from any such
funds any amounts that are properly due and payable to such Servicer under this
Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, each Servicer shall be entitled to recover unpaid Servicing Fees out
of related late collections to the extent permitted in Section 3.11. The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw
from the related Collection Account, and pursuant to Section 3.07(e), to direct
the Master Servicer to instruct the Securities Administrator to withdraw from
the Distribution Account and remit to the applicable Servicer (except for monies
invested during the Master Servicer Float Period), as additional servicing
compensation, interest or other income earned on the related portions of
deposits therein. Each Servicer shall also be entitled as additional servicing
compensation, to interest or other income earned on deposits in the related
Escrow Account (to the extent permitted by law and the related Mortgage Loan
documents) in accordance with Section 3.12. Each Servicer shall also be entitled
to retain net Prepayment Interest Excesses (to the extent not required to offset
Prepayment Interest Shortfalls), but only to the extent such amounts are
received by such Servicer.
(c) Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer, the
Securities Administrator and the Master Servicer shall deliver or cause to be
delivered, and shall cause each Subservicer engaged by such Servicer to deliver
or cause to be delivered to the Master Servicer (and the Master Servicer shall
deliver or otherwise make available to the Depositor, the Securities
Administrator, the Rating Agencies and the Trustee) on or before March 5th
(March 15th with respect to Saxon) of each calendar year, commencing in 2008, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Securities Administrator, the Master Servicer, such
Servicer or Subservicer, as applicable, during the preceding calendar year and
of its performance under this Agreement or the applicable Subservicing
Agreement, as the case may be, has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Securities Administrator, the Master Servicer, such Servicer or Subservicer, as
applicable, has fulfilled all of its obligations under this Agreement or the
applicable Subservicing Agreement, as the case may be, in all material respects,
throughout such year, or, if there has been a default in the fulfillment of any
such obligation in any material respect, specifying each such default known to
such officers and the nature and status thereof. Promptly after receipt of each
such Officer's Certificate, the Depositor shall review each such Officer's
Certificate and, if applicable, consult with the Securities Administrator, the
Master Servicer, the applicable Servicer or Subservicer as to the nature of any
defaults by the Securities Administrator, the Master Servicer, such Servicer or
any related Subservicer in the fulfillment of any of the Securities
Administrator's, the Master Servicer's, such Servicer's or any related
Subservicer's obligations. The obligations of the Securities Administrator, the
Master Servicer, each Servicer and each Subservicer under this Section 3.22
apply to the Securities Administrator, the Master Servicer, each Servicer and
each Subservicer that serviced a Mortgage Loan during the applicable period,
whether or not the Securities Administrator, the Master Servicer, such Servicer
or such Subservicer is acting as the Securities Administrator, the Master
Servicer, a Servicer or a Subservicer at the time such Officer's Certificate is
required to be delivered. None of the Servicers or Subservicers, the Master
Servicer, the Securities Administrator or any Servicing Function Participant
shall be required to cause the delivery of any Officer's Certificate required by
this Section until March 10th (March 15th with respect to Saxon) in any given
year so long as it has received written confirmation from the Depositor that a
Form 10-K is not required to be filed in respect of the Trust for the preceding
calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 5th (March 15th with respect to Saxon) of each calendar
year commencing in 2008, each Servicer shall deliver, and shall cause each
Subservicer engaged by such Servicer to deliver, and the Securities
Administrator, the Master Servicer, the Trustee (in its custodial capacity) and
the Custodians, shall deliver or otherwise make available, and each Servicer,
the Securities Administrator, the Master Servicer, the Trustee (in its custodial
capacity) and the Custodians shall cause each Subcontractor utilized by such
Servicer (or by any such Subservicer), the Securities Administrator, the Master
Servicer, the Trustee (in its custodial capacity) or such Custodian, as
applicable, and determined by such Servicer, the Securities Administrator, the
Master Servicer, the Trustee (in its custodial capacity) or such Custodian, as
applicable, pursuant to Section 3.02(e) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB (in each case, a
"Servicing Function Participant"), to deliver, each at its own expense, to the
Master Servicer (and the Master Servicer shall make available to the Securities
Administrator and the Depositor as part of the filing package forwarded to the
Depositor for review and verification) a report on an assessment of compliance
with the Servicing Criteria applicable to it that contains (A) a statement by
such party of its responsibility for assessing compliance with the Servicing
Criteria applicable to it, (B) a statement that such party used the Servicing
Criteria to assess compliance with the applicable Servicing Criteria, (C) such
party's assessment of compliance with the applicable Servicing Criteria as of
and for the period ending the end of the fiscal year covered by the Form 10-K
required to be filed pursuant to Section 8.12, including, if there has been any
material instance of noncompliance with the applicable Servicing Criteria, a
discussion of each such failure and the nature and status thereof, and (D) a
statement that a registered public accounting firm has issued an attestation
report on such Person's assessment of compliance with the applicable Servicing
Criteria as of and for such period. Each such assessment of compliance report
shall be addressed to the Depositor and signed by an authorized officer of the
applicable company, and shall address each of the applicable Servicing Criteria
set forth on Exhibit Q hereto, or as set forth in the notification furnished to
the Depositor and the Securities Administrator pursuant to Section 3.23(c). The
Servicers, the Securities Administrator, the Master Servicer, the Trustee (in
its custodial capacity) and the Custodians hereby acknowledge and agree that
their respective assessments of compliance will cover the items identified on
Exhibit Q hereto as being covered by such party. The parties to this Agreement
acknowledge that where a particular Servicing Criteria has multiple components,
each party's assessment of compliance (and related attestation of compliance)
will relate only to those components that are applicable to such party. Promptly
after receipt of each such report on assessment of compliance, (i) the Depositor
shall review each such report and, if applicable, consult with the applicable
Servicer, the Securities Administrator, the Master Servicer, the Trustee (in its
custodial capacity) or the applicable Custodian as to the nature of any material
instance of noncompliance with the Servicing Criteria applicable to it (and each
Subservicer or Servicing Function Participant engaged or utilized by the
applicable Servicer, such Subservicer, the Securities Administrator, the Master
Servicer, the Trustee (in its custodial capacity) or the Custodians, as
applicable), as the case may be. None of the Servicers, the Securities
Administrator, the Master Servicer, the Trustee (in its custodial capacity), any
Custodian or any Subservicer or any Servicing Function Participant shall be
required to cause the delivery of any such assessments until March 10th (March
15th with respect to Saxon) in any given year, and the Trustee (in its custodial
capacity) or the Custodians shall not be required to deliver any such
assessment, so long as it has received written confirmation from the Depositor
that a Form 10-K is not required to be filed in respect of the Trust for the
preceding calendar year.
(b) Not later than March 5th (March 15th with respect to Saxon) of
each calendar year commencing in 2008, each Servicer, the Securities
Administrator, the Master Servicer, the Trustee (in its custodial capacity) and
each Custodian shall cause, and such Servicer shall cause each Subservicer
engaged by such Servicer, and such Servicer, the Securities Administrator, the
Master Servicer, the Trustee (in its custodial capacity) and each Custodian
shall cause each Servicing Function Participant utilized by the Securities
Administrator, the Master Servicer, the Trustee (in its custodial capacity),
such Custodian or such Servicer, as applicable (or by any Subservicer engaged by
such Servicer) to cause, each at its own expense, a registered public accounting
firm (which may also render other services to such party) and that is a member
of the American Institute of Certified Public Accountants to furnish a report to
the Master Servicer (and the Master Servicer shall make available to the
Securities Administrator and the Depositor as part of the filing package
forwarded to the Depositor for review and verification, with a copy to the
Rating Agencies), to the effect that (i) it has obtained a representation
regarding certain matters from the management of such Person, which includes an
assertion that such Person has complied with the Servicing Criteria applicable
to it pursuant to Section 3.23(a) and (ii) on the basis of an examination
conducted by such firm in accordance with standards for attestation engagements
issued or adopted by the PCAOB, that attests to and reports on such Person's
assessment of compliance with the Servicing Criteria applicable to it. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Each such related accountant's attestation report shall be made in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act. Such report must be available for general
use and not contain restricted use language. Promptly after receipt of each such
accountants' attestation report, the Depositor shall review the report and, if
applicable, consult with the applicable Servicer, the Master Servicer, the
Securities Administrator, the Trustee (in its custodial capacity) or the
applicable Custodian, as to the nature of any defaults by the applicable
Servicer, the Securities Administrator, the Master Servicer, the Trustee (in its
custodial capacity) or the applicable Custodian (and each Subservicer or
Servicing Function Participant engaged or utilized by any Servicer, the
Securities Administrator, the Master Servicer, the Trustee (in its custodial
capacity), the applicable Custodian or by any Subservicer engaged by a
Servicer), as the case may be, in the fulfillment of any of the Servicer's, the
Securities Administrator's, the Master Servicer's, the Trustee's (in its
custodial capacity), any of the Custodian's, the applicable Subservicer's or
Servicing Function Participant's obligations hereunder or under any applicable
sub-servicing agreement. None of the Securities Administrator, the Master
Servicer, the Servicers, the Trustee (in its custodial capacity), the Custodians
or any Servicing Function Participant shall be required to cause the delivery of
any such attestation required by this paragraph until March 10th (March 15th
with respect to Saxon) in any given year, and the Trustee (in its custodial
capacity) and the Custodians shall not be required to deliver any such
assessment, so long as each of them has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
(c) Promptly upon written request from the Depositor, each Servicer
shall notify the Securities Administrator and the Depositor as to the name of
each Subservicer engaged by such Servicer and each Servicing Function
Participant utilized by such Servicer and by each Subservicer engaged by such
Servicer, but only to the extent there has been a change in the information in
such notification from notices previously delivered and the Securities
Administrator and the Master Servicer shall notify the Depositor and the
Securities Administrator as to the name of each Servicing Function Participant
utilized by it, and each such notice will specify what specific Servicing
Criteria will be addressed in the report on assessment of compliance prepared by
such Subservicer and Servicing Function Participant in each case, to the extent
of any change from the prior year's notice, if any. When a Servicer, the
Securities Administrator or the Master Servicer submits its assessment pursuant
to Section 3.23(a), such Servicer, the Securities Administrator or the Master
Servicer, as applicable, will also at such time include the assessment (and
related attestation pursuant to Section 3.23(b)) of each Servicing Function
Participant utilized by it and by each Subservicer engaged by it.
(d) The obligations of the Securities Administrator, the Master
Servicer, the Trustee (in its custodial capacity), each Custodian, each Servicer
or Subservicer under this Section apply to the Securities Administrator, the
Master Servicer, the Trustee (in its custodial capacity), each Custodian, and
each Servicer and Subservicer that serviced a Mortgage Loan during the
applicable period, whether or not the Securities Administrator, the Master
Servicer, the Trustee (in its custodial capacity), such Custodian, Servicer or
Subservicer is acting as Securities Administrator, Master Servicer, Trustee (in
its custodial capacity), Custodian, Servicer or Subservicer, as applicable, at
the time such assessment of compliance with Servicing Criteria and related
accountant's attestation is required to be delivered.
Section 3.24 Master Servicer to Act as Servicer. (a) Subject to
Section 7.02, in the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of such Servicer hereunder arising thereafter (except that the
Master Servicer shall not be (i) liable for losses of such predecessor servicer
pursuant to Section 3.10 or any acts or omissions of such predecessor servicer
hereunder), (ii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.03, (iii) responsible for expenses of such
predecessor servicer pursuant to Section 2.03 or (iv) deemed to have made any
representations and warranties of such Servicer hereunder. Any such assumption
shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If any Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Master Servicer (or any other successor Servicer)
shall not incur any liability or have any obligations in its capacity as
successor Servicer under a Subservicing Agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of such Servicer thereunder; and such Servicer shall not thereby be
relieved of any liability or obligations under the Subservicing Agreement
arising prior to the date of such succession.
(d) The applicable Servicer shall, upon request of the Master
Servicer, but at the expense of such Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement (if any) to which
it is party and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of such Subservicing
Agreement to the assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to the
Master Servicer on each Remittance Date for deposit in the Distribution Account
an amount from such Servicer's own funds equal to the Compensating Interest
payable by such Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. (a) With
respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
Section 3.27 Optional Purchase of Delinquent Mortgage Loans. Either
(i) the applicable Servicer (or its assignee) or (ii) the Holders of a majority
(by Percentage Interest) of the Class X Certificates (or, if the Class X
Certificates have been pledged to secure any NIM Securities, the holders of a
majority of the equity interests in the related NIM Issuer) may, at its or their
option, purchase any 90+ Day Delinquent Mortgage Loans from the Trust by payment
to the Trust of a purchase price equal to 100% of the unpaid principal balance
of such Mortgage Loan plus accrued and unpaid interest on the related Mortgage
Loan at the applicable Mortgage Interest Rate, plus the amount of any
unreimbursed Servicing Advances made by the applicable Servicer; provided,
however, that neither the Depositor nor any Affiliate of the Depositor may
exercise the foregoing option, or have the power to direct either the Holders of
the majority (by Percentage Interest) of the Class X Certificates or of the
equity interests in the related NIM Issuer, as the case may be, to exercise the
foregoing option, under this Section 3.27).
Upon receipt of such purchase price, the applicable Servicer shall
provide to the Trustee and the applicable Custodian, as applicable, a Request
for Release and the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, shall promptly release to such Servicer (or its
assignee) or such Class X Certificateholders (or their designee), as applicable,
the Mortgage File relating to the Mortgage Loan being repurchased.
No Person holding the foregoing option under this Section 3.27 shall
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
each Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans
serviced by such Servicer, which Scheduled Payments were not received as of the
close of business on the related Determination Date (provided, however, that
with respect to any Balloon Loan that is delinquent on its maturity date, the
applicable Servicer will not be required to advance the principal portion of the
related balloon payment but will be required to continue to make P&I Advances in
accordance with this Section 4.01(a) with respect to such Balloon Loan in an
amount equal to the assumed scheduled interest that would otherwise be due based
on the original amortization schedule for such Balloon Loan (with interest at
the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO Property
serviced by such Servicer, which REO Property was acquired during or prior to
the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Master Servicer an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties serviced by such Servicer for the related Remittance
Date either (i) from its own funds or (ii) from the related Collection Account,
to the extent of funds held therein for future distribution (in which case, such
Servicer will cause to be made an appropriate entry in the records of the
related Collection Account that any Amount Held for Future Distribution have
been, as permitted by this Section 4.01, used by such Servicer in discharge of
any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by such Servicer with
respect to such Mortgage Loans and REO Properties. Any Amount Held for Future
Distribution and so used shall be appropriately reflected in such Servicer's
records and replaced by such Servicer by deposit in the related Collection
Account on or before any future Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by any Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Master Servicer.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
(f) On each Remittance Date, the Master Servicer shall deposit in
the Distribution Account all funds remitted to it by the Servicers pursuant to
Sections 3.11(a)(i) and 3.25 and this Section 4.01. The Securities Administrator
may retain or withdraw from the Distribution Account, (i) the Master Servicing
Fee, (ii) amounts necessary to reimburse the Master Servicer or any Servicer for
any previously unreimbursed Advances and any Advances the Master Servicer deems
to be nonrecoverable from the related Mortgage Loan proceeds, (iii) an amount
necessary to indemnify the Master Servicer, the Trustee or the Servicers for
amounts due in accordance with this Agreement, and (iv) any other amounts that
each of the Master Servicer, the Trustee and the Securities Administrator is
entitled to receive under this Agreement for reimbursement, indemnification or
otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall allocate from amounts then on deposit
in the Distribution Account in the following order of priority and to the extent
of the Available Funds and, on such Distribution Date, shall make distributions
on the Certificates in accordance with such allocation:
(i) to the holders of each Class of Offered Certificates and to the
Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments,
and (y) any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, owed to the Swap Provider with respect to such
Distribution Date, (to the extent a Replacement Swap Provider
Payment has not been made to the Swap Account);
(B) from the Interest Remittance Amounts for both the Loan
Groups, to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amounts and any related Unpaid Interest
Amounts for such Distribution Date, pursuant to the allocation set
forth in clauses (iv) and (v) of this Section 4.02(a);
(C) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(J) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of Offered Certificates then entitled to
distributions of principal as set forth below, from amounts remaining on
deposit in the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Distribution Amount in
the following order of priority:
(1) to the Class A Certificates, allocated as described
in Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero; and
(2) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until the respective Class Certificate
Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the
holders of the related Class or Classes of Offered Certificates then
entitled to distribution of principal, from amounts remaining on
deposit in the Distribution Account after making distributions
pursuant to clause (i) above, an amount equal to, in the aggregate,
the Principal Distribution Amount in the following amounts and order
of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above and (y) the Class M-1 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above and to the Class M-1 Certificates in clause (ii)(B)(2) above
and (y) the Class M-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above and
to the Class M-2 Certificates in clause (ii)(B)(3) above and (y) the
Class M-3 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above, to
the Class M-2 Certificates in clause (ii)(B)(3) above and to the
Class M-3 Certificates in clause (ii)(B)(4) above and (y) the Class
M-4 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above, to
the Class M-2 Certificates in clause (ii)(B)(3) above, to the Class
M-3 Certificates in clause (ii)(B)(4) above and to the Class M-4
Certificates in clause (ii)(B)(5) above and (y) the Class M-5
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(7) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above, to
the Class M-2 Certificates in clause (ii)(B)(3) above, to the Class
M-3 Certificates in clause (ii)(B)(4) above, to the Class M-4
Certificates in clause (ii)(B)(5) above and to the Class M-5
Certificates in clause (ii)(B)(6) above and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(8) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above, to
the Class M-2 Certificates in clause (ii)(B)(3) above, to the Class
M-3 Certificates in clause (ii)(B)(4) above, to the Class M-4
Certificates in clause (ii)(B)(5) above and to the Class M-5
Certificates in clause (ii)(B)(6) above and to the Class B-1
Certificates in clause (ii)(B)(7) above and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(9) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(1)
above, to the Class M-1 Certificates in clause (ii)(B)(2) above, to
the Class M-2 Certificates in clause (ii)(B)(3) above, to the Class
M-3 Certificates in clause (ii)(B)(4) above, to the Class M-4
Certificates in clause (ii)(B)(5) above, to the Class M-5
Certificates in clause (ii)(B)(6) above, to the Class B-1
Certificates in clause (ii)(B)(7) above and to the Class B-2
Certificates in clause (ii)(B)(8) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest Amount
for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest Amount
for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest Amount
for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest Amount
for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized Loss
Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest Amount
for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized Loss
Amount for such Class;
(K) to the Class B-1 Certificates, any Unpaid Interest Amount
for such Class;
(L) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(M) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(N) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(O) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(P) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(Q) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(R) from any Interest Rate Cap Payment on deposit in the
Excess Reserve Fund Account with respect to that Distribution Date,
an amount equal to any unpaid Basis Risk CarryForward Amount with
respect to the Offered Certificates for that Distribution Date,
allocated (a) first, among those Classes of Certificates, pro rata,
based upon their respective Class Certificate Balances and (b)
second, any remaining amounts to those Classes of Certificates, pro
rata, based on any Basis Risk CarryForward Amounts remaining unpaid,
in order to reimburse such unpaid amounts;
(S) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in that
account) with respect to such Distribution Date, an amount equal to
any remaining Basis Risk CarryForward Amount with respect to the
Offered Certificates for such Distribution Date, allocated to the
Offered Certificates in the same order and priority in which the
Accrued Certificate Interest Distribution Amount is allocated among
such Classes of Certificates, with the allocation to the Class A
Certificates being (a) first, among the Class A Certificates, pro
rata, based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro rata,
based on any Basis Risk CarryForward Amounts remaining unpaid, in
order to reimburse such unpaid amounts;
(T) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(U) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(T) (including any remaining Interest Rate Cap
Payments on deposit in such account;
(V) to the Class R Certificates, any remaining amount in the
Trust REMICs, in respect of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC; and
(W) to the Class RX Certificates, any remaining amount, in
respect of the Class X REMIC.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b
and Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(B) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class A-2b
and Class A-2c Certificates, respectively, to the extent not
otherwise previously paid from the Interest Remittance Amount
attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b
and Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(B) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class A-2b
and Class A-2c Certificates, respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates, to the extent not otherwise
previously paid from the Interest Remittance Amount attributable to
Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
Any principal distributions allocated to the Group II Class A
Certificates shall be allocated sequentially, to the Class A-2a Certificates,
until their Class Certificate Balance has been reduced to zero, then to the
Class A-2b Certificates, until their Class Certificate Balance has been reduced
to zero, and then to the Class A-2c Certificates, until their Class Certificate
Balance has been reduced to zero. Notwithstanding the foregoing, on and after
the Distribution Date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the principal balance of the Class X Certificates
have been reduced to zero, any principal distributions allocated to the Group II
Class A Certificates shall be allocated pro rata among the Classes of Group II
Class A Certificates, based on their respective Class Certificate Balances,
until their respective Class Certificate Balances have been reduced to zero.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) first, to the portion of the Class X Distributable Amount
allocable to interest; and
(2) second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and Class B-Certificates,
based on the amount of interest to which such Classes would otherwise be
entitled.
(e) Notwithstanding any other provision of this Agreement, the
Securities Administrator shall comply with all federal withholding requirements
respecting payments made or received under the Interest Rate Swap Agreement and
the Interest Rate Cap Agreement and payments to Certificateholders of interest
or original issue discount that the Securities Administrator reasonably believes
are applicable under the Code. The consent of Certificateholders shall not be
required for such withholding. If the Securities Administrator does withhold any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the
Securities Administrator shall indicate the amount withheld to such
Certificateholders. Such amounts shall be deemed to have been distributed to
such Certificateholders for all purposes of this Agreement.
(f) For purposes of this Agreement, any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) shall be
allocated by the Trustee between Loan Groups based on the respective aggregate
Stated Principal Balance of the Mortgage Loans in each Loan Group.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Servicers, the Depositor, the Master Servicer and
each Rating Agency a statement setting forth with respect to the related
distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date and
the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (separately identifying the
components thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class included
in such distribution and any remaining Unpaid Interest Amounts after
giving effect to such distribution, any Basis Risk CarryForward Amount for
each Class and the amount of such Basis Risk CarryForward Amount covered
by withdrawals from the Excess Reserve Fund Account on such Distribution
Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation of the shortfall as between principal
and interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicers and the Securities Administrator and the Master Servicer (stated
separately and in the aggregate) with respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(xi) the amount of P&I Advances included in the distribution on such
Distribution Date reported by the Servicers (and the Master Servicer as
successor Servicer and any other successor Servicer, if applicable) as of
the close of business on the Determination Date immediately preceding such
Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(xiii) with respect to any Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such Mortgage
Loans and the aggregate Stated Principal Balance of such Mortgage Loans as
of the close of business on the last Business Day of the immediately
preceding month;
(xiv) the total number and outstanding principal balance of any REO
Properties (and market value, if available) as of the close of business on
the last Business Day of the immediately preceding month;
(xv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xvi) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xvii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xviii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders with
respect to Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis
Risk CarryForward Amounts;
(xix) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xx) the calculations of LIBOR and Swap LIBOR;
(xxi) the Subordinated Amount and Specified Subordinated Amount;
(xxii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicers;
(xxiii) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxiv) the amount distributed on the Class X Certificates;
(xxv) the amount of any Subsequent Recoveries for such Distribution
Date;
(xxvi) the number of Mortgage Loans at the end of the applicable
reporting period, the pool factor (being the Stated Principal Balance of
the Mortgage Loans for the related Distribution Date divided by the
Cut-off Date Principal Balance), and the weighted average interest rate,
and weighted average remaining term; and
(xxvii) the Interest Rate Cap Payments, if any, for such
Distribution Date.
In addition, each Form 10-D prepared and filed by the Securities
Administrator pursuant to Section 8.12 shall include the following information
with respect to the related distribution (including to the extent such
information is provided by the Trustee to the Securities Administrator):
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Securities Administrator has
actual knowledge or has received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Securities Administrator has actual knowledge or received
written notice.
provided that, if the Securities Administrator receives written notice of the
events described in (i) and/or (ii) above from any Servicer, such Servicer shall
be responsible for providing information to the Securities Administrator for
inclusion in the applicable Form 10-D.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Master
Servicer and the Depositor is limited, if applicable, to the availability,
timeliness and accuracy of the information derived from the Servicers, the
Master Servicer and the Swap Provider. The Securities Administrator shall make
available the above statement via the Securities Administrator's internet
website. The Securities Administrator's website will initially be located at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇ and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 1-866-846-4526.
Parties that are unable to use the website are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Securities Administrator may change the way the monthly
statements to Certificateholders are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes. The Securities Administrator will not
be liable for the dissemination of information in accordance with this
Agreement.
The Securities Administrator shall make available to each Analytics
Company, either electronically or via the Securities Administrator's internet
website, each statement to Certificateholders prepared pursuant to Section
4.03(a). The Securities Administrator (and the applicable Servicer, if such
discrepancy results from or arises out of any information provided by the
applicable Servicer pursuant to this Agreement) shall cooperate in good faith
with the Depositor to reconcile any discrepancies in such statements, and the
Securities Administrator shall provide any corrections to such statements to
each Analytics Company as soon as reasonably practicable after the related
Distribution Date.
The Securities Administrator will also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the monthly statement to
Certificateholders and may affix thereto any disclaimer it deems appropriate in
its reasonable discretion (without suggesting liability on the part of any other
party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
(d) The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
(e) No later than the 18th day of each month, or if such date is not
a Business Day, the next succeeding Business Day (but in no event later than the
20th day of each month), each Servicer shall furnish to the Master Servicer, a
monthly remittance advice statement (the "Servicer Remittance Report")
containing the data fields set forth on Exhibit W, attached hereto (or, in the
case of Countrywide Servicing, Exhibit X attached hereto), or in a format
mutually agreed upon by the parties (or, in the case of ▇▇▇▇▇ Fargo, Exhibit Y,
attached hereto, or in a format mutually agreed upon by the parties) and a
monthly defaulted loan report containing the data fields set forth on Exhibit Z,
attached hereto (or in a format mutually agreed upon by the parties), in the
case of Saxon, Exhibit AA, attached hereto (or in a format mutually agreed upon
by the parties), in the case of ▇▇▇▇▇ Fargo or, Exhibit BB, attached hereto (or
in a format mutually agreed upon by the parties), in the case of Countrywide
Servicing in the case of each Exhibit specified in this Section 4.03(e), in a
format mutually agreed upon by the applicable Servicer and the Master Servicer
and such information as shall be reasonably requested (i) by the Depositor to
enable the Depositor to disclose "static pool information", as required by Item
1105 of Regulation AB, with respect to the Mortgage Loans, and (ii) by the
Master Servicer to enable the Securities Administrator to provide the reports
required by Section 4.03(a) as to the accompanying remittance and applicable Due
Period and Prepayment Period to which such remittance relates.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such Servicer
during the current distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to such Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days and 91 or more
days; (b) as to which foreclosure or bankruptcy proceedings of the related
mortgagor have commenced; and (c) as to which REO Property has been
acquired.
Concurrently with each delivery of a Servicer Remittance Report to
the Master Servicer, ▇▇▇▇▇ Fargo Servicer shall provide, in a manner consistent
with the preceding paragraph, a supplemental statement (to the extent not
previously provided) setting forth information in subclauses (v) and (vi) of the
preceding paragraph.
The Master Servicer shall promptly make available the Servicer
Remittance Report and the related supplemental statement to the Depositor and
the Securities Administrator.
(f) With respect to each Remittance Date, the Securities
Administrator shall make available on the Securities Administrator's Internet
website a monthly loan level data file (based solely on information provided by
the Servicers) containing data provided to the Securities Administrator by the
Servicers, available to those who are permitted to access the website, including
each Rating Agency. Such monthly loan data file shall contain at a minimum the
fields referenced in Exhibit FF.
(g) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined by the Securities Administrator from
information provided by the Servicers and reported by the Securities
Administrator based on the "OTS" methodology for determining delinquencies on
mortgage loans similar to the Mortgage Loans. By way of example, a Mortgage Loan
would be delinquent with respect to a Scheduled Payment due on a Due Date if
such Scheduled Payment is not made by the close of business on the Mortgage
Loan's next succeeding Due Date, and a Mortgage Loan would be more than 30 days
Delinquent with respect to such Scheduled Payment if such Scheduled Payment were
not made by the close of business on the Mortgage Loan's second succeeding Due
Date. Each Servicer, other than ▇▇▇▇▇ Fargo Servicer, hereby represents and
warrants to the Depositor that such Servicer is not subject to any delinquency
recognition policy established by the primary safety and soundness regulator, if
any, of such Servicer, that is more restrictive than the foregoing delinquency
recognition policy. ▇▇▇▇▇ Fargo Servicer hereby represents and warrants to the
Depositor that ▇▇▇▇▇ Fargo Servicer is not subject to any delinquency
recognition policy established by its safety and soundness regulators.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of "LIBOR". Until all of the Offered Certificates are paid in full,
the Securities Administrator shall at all times retain at least four Reference
Banks for the purpose of determining LIBOR with respect to each LIBOR
Determination Date. The Securities Administrator initially shall designate the
Reference Banks (after consultation with the Depositor). Each "Reference Bank"
shall be a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Securities Administrator and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Securities Administrator should
terminate its appointment as Reference Bank, the Securities Administrator shall
promptly appoint or cause to be appointed another Reference Bank (after
consultation with the Depositor). The Securities Administrator shall have no
liability or responsibility to any Person for (i) the selection of any Reference
Bank for purposes of determining LIBOR or (ii) any inability to retain at least
four Reference Banks which is caused by circumstances beyond its reasonable
control.
The Pass-Through Rate for each Class of Offered Certificates for
each Interest Accrual Period shall be determined by the Securities Administrator
on each LIBOR Determination Date so long as the Offered Certificates are
Outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the Offered Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the Offered
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Subordinated Certificates then Outstanding in
reduction of the Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Securities
Administrator shall establish and maintain in its name, a separate
non-interest-bearing trust account for the benefit of the holders of the
Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account
shall be an Eligible Account, and funds on deposit therein shall not be invested
and shall be held separate and apart from, and shall not be commingled with, any
other moneys, including, without limitation, other moneys of the Securities
Administrator held pursuant to this Agreement.
On the Business Day immediately preceding each Distribution Date,
Swap Termination Payments (including, without duplication, Replacement Swap
Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap
Receipts and, without duplication, amounts distributable on the Class IO
Interest for that Distribution Date will be deposited into the Swap Account.
Funds in the Swap Account will be distributed in the following order of
priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the
Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than
a Defaulted Swap Termination Payment, owed to the Swap Provider for that
Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class B-1, Class B-2 and Class B-3 Certificates, in that
order, to pay Accrued Certificate Interest Distribution Amounts and, if
applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i)
and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and,
in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount for prior or current Realized Losses that have not yet
been reimbursed, after giving effect to payments and distributions from
Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro
rata, based on their Class Certificate Balances for such Distribution
Date, up to the Swap Payment Allocation for each Class of Class A
Certificates and to the extent unpaid from Available Funds (including
Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class B-1, Class B-2 and Class B-3 Certificates, to pay
Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts, up to the Swap Payment Allocation for each Class of
Class M-and Class B Certificates and to the extent unpaid from Available
Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund
Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk
CarryForward Amounts, and, without duplication, Upper-Tier CarryForward
Amounts, pro rata, based on their respective remaining unpaid Basis Risk
CarryForward Amounts or, without duplication, Upper-Tier CarryForward
Amounts after the allocation of payments as set forth in clauses (vi) and
(vii) above;
(ix) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class B-1, Class B-2 and Class B-3 Certificates, to pay
any Unpaid Realized Loss Amount, to the extent unpaid from Available
Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination
Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust receives
a Swap Termination Payment, the Securities Administrator shall use the Swap
Termination Payment to enter into a replacement interest rate swap agreement as
directed by the Depositor with a successor swap provider (or its guarantor)
meeting the ratings requirements set forth in the Interest Rate Swap Agreement
being terminated on the same remaining terms as those in the Interest Rate Swap
Agreement being terminated, so long as the Swap Termination Payment is
sufficient to obtain such replacement interest rate swap agreement. In the event
that the Trust receives a Swap Termination Payment and a successor swap provider
cannot be obtained, then the Securities Administrator shall deposit the Swap
Termination Payment into the reserve account that is a sub-account of the Swap
Account. On each subsequent Distribution Date (so long as funds are available in
the reserve account), the Securities Administrator shall withdraw from the
reserve account and deposit into the Swap Account an amount equal to the amount
of any Net Swap Receipt due the Trust (calculated in accordance with the terms
of the original Interest Rate Swap Agreement) and treat such amount as a Net
Swap Receipt for purposes of determining the distributions from the Swap
Account. The remaining amount in the reserve account will remain in that account
and will not be treated as a Swap Termination Payment for purposes of
determining the distributions from the Swap Account until the final Distribution
Date. In no event shall the Securities Administrator be responsible for the
selection of any successor or replacement Swap Provider or any shortfalls caused
by a failure to enter into a replacement interest rate swap agreement.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that the Trust enters into a replacement interest rate
swap agreement and the Trust is entitled to receive a Replacement Swap Provider
Payment from a replacement swap provider, the Securities Administrator shall
direct the replacement swap provider (or its guarantor) to make such Replacement
Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any
Replacement Swap Provider Payment shall be made from the Swap Account to the
Swap Provider immediately upon receipt of such payment, regardless of whether
the date of receipt thereof is a Distribution Date. To the extent that any
Replacement Swap Provider Payment is made to an account other than the Swap
Account, then, notwithstanding anything to the contrary contained in this
Agreement, any Replacement Swap Provider Payment shall be paid to the Swap
Provider immediately upon receipt of such Replacement Swap Provider Payment by
the Trust, regardless of whether the date of receipt thereof is a Distribution
Date and without regard to anything to the contrary contained in this Agreement.
For the avoidance of doubt, the parties agree that the Swap Provider shall have
first priority to any Replacement Swap Provider Payment over the payment by the
Trust to Certificateholders, any Servicer, the Master Servicer, the Securities
Administrator, any Custodian, the Trustee or any other Person. However, to the
extent any Replacement Swap Provider Payment received from a replacement swap
provider and paid to the Swap Provider being replaced is less than the full
amount of a Swap Termination Payment owed to the Swap Provider, any remaining
amount of the Swap Termination Payment shall be paid to the Swap Provider on
subsequent Distribution Dates in accordance with this Section 4.02 and Section
4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider
on a Distribution Date, in which case such remaining amounts will be paid on
such Distribution Date).
The Securities Administrator shall account for the Swap Account as
an asset of the Grantor Trust and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Swap Account are the
Class X Certificateholders. For federal income tax purposes, Net Swap Payments
and Swap Termination Payments (without duplication of previously paid
Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed
to be paid to the Swap Account from the Class X REMIC, first, by the Holder of
the Class X Certificates (in respect of the Class IO Interest and, if
applicable, the Class X Interest) and second, other than any Defaulted Swap
Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable
Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as
and to the extent provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Securities Administrator to
the Offered Certificateholders shall be accounted for by the Securities
Administrator, for federal income tax purposes, as amounts paid first to the
Holders of the Class X Certificates in respect of the Class X Interest and (to
the extent remaining after payments to the Swap Provider) the Class IO Interest,
and then to the respective Class or Classes of Offered Certificates. In
addition, the Securities Administrator shall account for the rights of Holders
of each Class of Offered Certificates to receive payments of Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts
from the Swap Account (along with Basis Risk CarryForward Amounts payable from
the Excess Reserve Fund Account), subject to the obligation to pay Class IO
Shortfalls, as rights and obligations under a separate limited recourse notional
principal contract between the Class X Certificateholders and Holders of each
such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
With respect to the failure of the Swap Provider to perform any of
its obligations under the Interest Rate Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Schedule to the Interest
Rate Swap Agreement, the Securities Administrator shall send any notices and
make any demands, on behalf of the Trust as are required under the Interest Rate
Swap Agreement. To the extent that the Swap Provider fails to make any payment
required under the terms of the Schedule to the Interest Rate Swap Agreement,
the Securities Administrator shall immediately demand that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the
guarantor of the Swap Provider's obligations under the guarantee of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ relating to the Interest Rate Swap Agreement, make any and all payments
then required to be made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to such guarantee. In
addition, in the event a "Delivery Amount" (as defined in the Interest Rate Swap
Agreement) payable but not delivered by the Swap Provider as required by the
Interest Rate Swap Agreement, the Securities Administrator shall deliver a
notice of failure to transfer collateral on the next Business Day following such
failure, in accordance with the terms of the Schedule to the Interest Rate Swap
Agreement. The Securities Administrator shall cause any replacement swap
provider to provide a copy of the related replacement interest rate swap
agreement to the Securities Administrator and the Depositor.
If a Responsible Officer of the Securities Administrator receives
written notice that the Swap Provider or its guarantor has been downgraded below
the levels set forth in Part 5(f) of the Interest Rate Swap Agreement and the
posting of collateral is required in accordance with the terms of Part 5(f) of
the Interest Rate Swap Agreement, the Securities Administrator shall demand that
the Swap Provider or its guarantor post collateral in accordance with the terms
of Part 5(f) of the Interest Rate Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and Class
P Certificates in the name of the NIM Trustee, or such other name or names as
the Depositor shall request, and to deliver the Class X and Class P Certificates
to the NIM Trustee or to such other Person or Persons as the Depositor shall
request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such Holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the related Record Date or (y) by check mailed by first class mail
to such Certificateholder at the address of such Holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of this Section 5.02, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Except with
respect to (i) the transfer of the Class X, Class P or Residual Certificates to
the Depositor or an Affiliate of the Depositor or, in the case of the Class RX
Certificates, the initial transfer by an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, in
the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Securities Administrator in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit H (the "Transferor Certificate") and
either (i) there shall be delivered to the Securities Administrator a letter in
substantially the form of Exhibit I (the "Rule 144A Letter") or (ii) there shall
be delivered to the Securities Administrator at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Securities Administrator, the Master Servicer and the Servicers shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Securities Administrator, the Master Servicer and each Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
Except with respect to (i) the transfer of Class X or Class P
Certificates or the Residual Certificates to the Depositor or an Affiliate of
the Depositor or, in the case of the Class RX Certificates, the initial transfer
by an Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the 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 (in the event such Certificate is a Private Certificate or a
Residual Certificate, 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), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law ("Similar Law") materially similar to the foregoing provisions of
ERISA or the Code, nor a Person acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such transfer, or
(ii) in the case of an ERISA-Restricted Certificate other than a Residual
Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Servicers, the Depositor, the Securities Administrator or the Trust Fund,
addressed to the Securities Administrator, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not constitute or result in a
non exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Depositor, the Securities
Administrator, the Master Servicer or the Servicers to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Physical Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Securities Administrator
by the transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Securities Administrator of the representation letter or Opinion
of Counsel satisfactory to the Securities Administrator as described above shall
be void and of no effect and (b) any purported transfer of a Class P Certificate
or Residual Certificate to a transferee that does not make the representation in
clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Securities Administrator in accordance with the
foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) Other than in the case of the Depositor or an Affiliate of the
Depositor that is a Permitted Transferee, no Ownership Interest in a
Residual Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the
Transfer of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator
under subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
not have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund or
the Securities Administrator, to the effect that the elimination of such
restrictions will not cause any Trust REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are Outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is a Non-Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
a Non-Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository, and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicers, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder;
provided that the Securities Administrator shall not by virtue of its assumption
of such obligations become liable to any party for any act or failure to act of
the Depository.
(f) No transfer of any Private Certificate presented or surrendered
for registration of transfer or exchange shall be made unless the transfer or
exchange is accompanied by a written instrument of transfer and accompanied by
IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments) or W-9 in form
satisfactory to the Securities Administrator, duly executed by the
Certificateholder or its representative or nominee duly authorized in writing.
The Securities Administrator shall promptly forward any such IRS Form (other
than with respect to the Residual Certificates) received to the Swap Provider
and the Cap Provider located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: NY ISD SPV Team, Fax: (▇▇▇) ▇▇▇-▇▇▇▇. Each such Private
Certificateholder by its purchase of such Private Certificate is deemed to
consent to any IRS Form being so forwarded. The Securities Administrator shall
not be liable for the completeness, accuracy, content or truthfulness of any
such tax certification provided to it.
(g) Each Certificate presented or surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Securities Administrator in accordance with its customary practice. No service
charge shall be made for any registration of transfer or exchange of Private
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicers, the Master Servicer and the Securities Administrator
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Securities Administrator that
such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the Master
Servicer, the Securities Administrator, the Trustee, the Depositor, and any
agent of a Servicer, the Master Servicer, the Securities Administrator, the
Depositor or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Servicers, the Master Servicer, the Securities
Administrator, the Trustee, the Depositor, or any agent of a Servicer, the
Master Servicer, the Depositor, the Securities Administrator or the Trustee
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor, the Trustee or a Servicer shall request such
information in writing from the Securities Administrator, then the Securities
Administrator shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Trustee, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Securities Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator initially designates its Corporate Trust Office for registration
of transfer or exchange purposes located at ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Services - MSAC 2007-HE7. The Securities Administrator shall give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each of the Servicers will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer, shall be a party, or any person succeeding to the
business of the Depositor or a Servicer (including through the acquisition of
substantially all of the assets of a Servicer), shall be the successor of the
Depositor or such Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except that any person
succeeding to the business of a Servicer shall be required to assume all of such
Servicer's future obligations under this Agreement and satisfy all of the
requirements of this Agreement to be a successor servicer); provided, however,
that the successor or surviving Person to such Servicer shall be qualified to
service mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and provided,
further, however, such successor servicer upon such merger, consolidation or
succession shall not have a servicer rating from any Rating Agency that is lower
than the Servicer's servicer rating from such Rating Agency immediately prior to
the merger. As a condition to the succession to any Servicer under this
Agreement by any Person (i) into which a Servicer may be merged or consolidated
or whom succeeds to the business of a Servicer, or (ii) which may be appointed
as a successor to a Servicer, such Servicer shall provide to the Depositor, at
least 15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Depositor of such succession or
appointment and (y) in writing to the Depositor and in form and substance
reasonably satisfactory to the Depositor and the Master Servicer, all
information reasonably necessary to enable the Securities Administrator,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are then required to be filed under the Exchange Act). The
Depositor shall forward to the Master Servicer promptly upon receipt thereof
copies of any notices received by it pursuant to this Section 6.02.
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others. Neither the Depositor, the Servicers nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor and each Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor and its
Affiliates, the Sponsor, each Servicer and any director, officer, employee or
agent of the Depositor, the Sponsor or each Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor any Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and each Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to
Sections 7.01 and 12.07, no Servicer shall assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
applicable Servicer, the Master Servicer, the Securities Administrator, the
Depositor and the Trustee or upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by such Servicer without the incurrence of unreasonable expense. Any such
determination permitting the resignation of a Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor, the Master Servicer,
the Securities Administrator and the Trustee. No such resignation shall become
effective until a successor shall have assumed such Servicer's responsibilities
and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided, further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Master Servicer, the Securities Administrator, the Trustee, the
Custodians, the Depositor, the other Servicers hereunder, any sub-servicer, the
successor Servicer and each Certificateholder harmless against any and all
claims, losses, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments, and any other costs, fees and expenses that such party may
sustain in any way related to such assignment except with respect to a successor
Servicer's failure to comply with the terms of this Agreement. No assignment by
such Servicer shall become effective until a successor Servicer acceptable to
the Depositor and the Master Servicer shall have assumed in writing such
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement. Any such assignment shall not relieve the applicable Servicer of
responsibility for any of the obligations specified herein except to the extent
that such responsibilities have been expressly assumed by the successor
Servicer.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims. (a) Each Servicer, severally and not jointly, shall indemnify the
Depositor, the Master Servicer, the Securities Administrator, the Sponsor, the
Trustee and any director, officer, employee or agent of the Depositor, the
Master Servicer, the Securities Administrator, the Sponsor or the Trustee and
hold them harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
in any way related to (i) any breach by such Servicer of any of its
representations and warranties referred to in Section 2.03(a), (ii) any error in
any tax or information return prepared by such Servicer or (iii) the failure of
such Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement (including, without limitation, the failure to
deliver accurate and complete information on a timely basis pursuant to Section
4.03(e)). The applicable Servicer immediately shall notify the Master Servicer,
the Securities Administrator, the Depositor and the Trustee if such claim is
made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the prior written consent of the Depositor, the Master Servicer and
the Securities Administrator and the Trustee) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Master Servicer, the Securities Administrator,
the Sponsor or the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Servicer shall indemnify the Depositor, the Master Servicer, the
Securities Administrator, the Sponsor, the Trustee and any director, officer,
employee or agent of the Depositor, the Master Servicer, the Securities
Administrator, the Sponsor or the Trustee and hold them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain in any way related to any failure by such
Servicer or any Subservicer engaged by such Servicer or any Subcontractor
utilized by such Servicer to deliver any information, report, certification or
accountants' letter when and as required under Sections 3.22, 3.23, 6.02 or
8.12, including without limitation any failure by such Servicer to identify
pursuant to Section 3.02(e) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then such Servicer shall contribute to the amount
paid or payable to the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and
such Servicer, on the other, in connection with such Servicer's obligations
pursuant to this Section 6.05. This Section 6.05 shall survive the termination
of this Agreement or the earlier resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default" wherever used
herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day, or in the case of ▇▇▇▇▇ Fargo
Servicer, two Business Days, after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor, the Securities Administrator, the Master Servicer or
to such Servicer, the Depositor, the Securities Administrator, the Master
Servicer and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement which continues unremedied for a
period of sixty (60) days (except that (x) such number of days shall be fifteen
(15) in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten (10) in the case of a failure of Countrywide Servicing to observe or
perform any of its obligations under the provisions of the Countrywide Amendment
Regulation AB incorporated by reference into this Agreement pursuant to Section
3.01(f) which are equivalent to a Servicer's obligations under Sections 3.02,
3.22 and 3.23 of this Agreement, zero (0), with respect to Saxon or nine (9)
with respect to ▇▇▇▇▇ Fargo Servicer, in the case of a failure to observe or
perform any of the obligations set forth in Sections 3.02, 3.22, 3.23, 6.02 or
8.12) and such number of days shall be after the earlier of (i) the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to such Servicer by the Depositor, the Securities Administrator
or the Master Servicer, or to such Servicer, the Securities Administrator, the
Master Servicer, the Depositor and the Trustee by Certificateholders entitled to
at least 25% of the Voting Rights in the Certificates and (ii) actual knowledge
of such failure by a Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Securities Administrator, the Master Servicer or by the
Depositor, or to such Servicer, the Securities Administrator, the Master
Servicer, the Trustee and the Depositor by Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates; or
(g) with respect to Saxon or ▇▇▇▇▇ Fargo Servicer, any withdrawal or
downgrade of two or more levels (i.e., from "Above Average" to "Below Average"
or the equivalent) of the applicable servicer's rating, as of the Closing Date
which results in a downgrade, qualification or withdrawal of the rating assigned
to any Class of Certificates by any Rating Agency.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Master Servicer may, and at
the direction of a majority of the Voting Rights represented by the
Certificates, the Master Servicer shall, by notice in writing to the applicable
Servicer (with a copy to the Securities Administrator and each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the Mortgage Loans serviced by such Servicer and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Master Servicer shall not be required to give
written notice to such Servicer of the occurrence of an Event of Default
described in clauses (b) through (g) of this Section 7.01 unless and until a
Responsible Officer of the Master Servicer has actual knowledge of the
occurrence of such an event. In the event that a Responsible Officer of the
Master Servicer has actual knowledge of the occurrence of an Event of Default
described in clause (a) of this Section 7.01, the Master Servicer shall give
written notice to the applicable Servicer of the occurrence of such an event
within one Business Day of the first day on which such Responsible Officer
obtains actual knowledge of such occurrence; provided, that if such failure is
the failure to make a P&I Advance, the Master Servicer shall send such notice
prior to 12:00 noon New York time on the Distribution Date and, if the Event of
Default of such Servicer was the failure to make a P&I Advance, the Master
Servicer, as successor Servicer, shall make such P&I Advance on the Distribution
Date that such notice was delivered. On and after the receipt by such Servicer
of such written notice, all authority and power of such Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Master Servicer. Subject to Section 7.02, the Master Servicer is
hereby authorized and empowered to execute and deliver, on behalf of such
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of such Servicer to pay
amounts owed pursuant to Article VIII. Such Servicer agrees to cooperate with
the Master Servicer in effecting the termination of such Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Master Servicer of all cash amounts which shall at the time be
credited to the related Collection Account of such predecessor Servicer, or
thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Master Servicer to Act; Appointment of Successor. On
and after the time a Servicer receives a notice of termination pursuant to
Section 3.24 or Section 7.01, the Master Servicer shall, subject to a transition
period not to exceed 90 days for the transfer of actual servicing to the
successor servicer, and, subject to and to the extent provided in Section 3.05,
be the successor to such Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on such Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances, whether or not this 90 day
transition period has elapsed, and after such transition period, if any, the
obligation to make Servicing Advances pursuant to Section 3.24 or Section 7.01.
As compensation therefor, the Master Servicer shall be entitled to all funds
relating to the Mortgage Loans that such Servicer would have been entitled to
charge to its Collection Account if such Servicer had continued to act hereunder
including, if such Servicer was receiving the Servicing Fee, the Servicing Fee
and the income on investments or gain related to its Collection Account and the
Distribution Account which such Servicer would be entitled to receive.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to such Servicer in accordance with Section 7.01, (a) the Master Servicer shall
have a period not to exceed 90 days to complete the transfer of servicing and
all data and to correct or manipulate such servicing data as may be required by
the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise enable the Master Servicer or other successor Servicer to
service the Mortgage Loans in accordance with Accepted Servicing Practices and
(b) the Master Servicer may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making P&I Advances and Servicing Advances
pursuant to Section 4.01, if it is otherwise unable to so act or at the written
request of Certificateholders entitled to at least a majority of the Voting
Rights represented by the Certificates, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Certificates by each Rating Agency, as the successor to such
servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of such servicer hereunder. Any successor to such servicer
shall be an institution which is a ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac approved servicer
in good standing, which has a net worth of at least $30,000,000, which is
willing to service the Mortgage Loans and which executes and delivers to the
Depositor and the Master Servicer an agreement accepting such delegation and
assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of such terminated
servicer (other than liabilities of such terminated servicer under Section 6.03
incurred prior to termination of such Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; provided, that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced, as a result of such assignment and delegation. Pending appointment of a
successor to a servicer hereunder, the Master Servicer, unless the Master
Servicer is prohibited by law from so acting, shall, subject to Section 3.05,
act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Master Servicer may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
servicer from investments. The Master Servicer and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. Neither the Master Servicer nor any other successor
Servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the
predecessor servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
In the event that a Servicer is terminated pursuant to Section 7.01,
such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Master Servicer is the predecessor Servicer (except in the
case where the Master Servicer in its role as successor Servicer is being
terminated pursuant to Section 7.01 by reason of an Event of Default caused
solely by the Master Servicer as the successor Servicer and not by the
predecessor Servicer's actions or omissions), such costs shall be paid by the
prior terminated Servicer promptly upon presentation of reasonable documentation
of such costs.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Master Servicer Event of Default and after the curing of all
Master Servicer Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless a Master Servicer Event of Default known to the Trustee has
occurred and is continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights represented by the Certificates relating to the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
The Trustee shall not be permitted to utilize Subcontractors for the
performance of certain of its obligations under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties and neither the
Trustee nor the Custodians shall have responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodians may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) neither the Trustee nor the Custodians shall be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided, further, the Trustee shall
not be responsible for any act or omission of any Custodian;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default, the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default, until a
Responsible Officer of the Trustee shall have received written notice thereof;
and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Securities Administrator
or a Servicer of any funds paid to the Depositor, the Master Servicer, the
Securities Administrator or a Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any Collection Account or the Distribution
Account by the Depositor, the Master Servicer, the Securities Administrator or a
Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid its fee by the Master
Servicer from the Master Servicer's own funds pursuant to a separate agreement.
The Trustee and any director, officer, employee, or agent of the Trustee shall
be indemnified by the Trust Fund against any loss, liability, or expense
(including reasonable attorney's fees) resulting from any error in any tax or
information return prepared by the Master Servicer or incurred in connection
with any claim or legal action relating to (a) this Agreement, (b) the
Certificates or the Interest Rate Swap Agreement, or (c) the performance of any
of the Trustee's duties under this Agreement (including any unreimbursed
out-of-pocket costs resulting from a servicing transfer), the Certificates or
the Interest Rate Swap Agreement, other than any loss, liability, or expense (i)
resulting from any breach of any Servicer's obligations in connection with this
Agreement for which the related Servicer has performed its obligation to
indemnify the Trustee pursuant to Section 6.05 or (ii) incurred because of
willful misconduct, bad faith, or negligence in the performance of any of the
Trustee's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee under
this Agreement. Without limiting the foregoing, except as otherwise agreed upon
in writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor, and its Affiliates or the Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor, or
a Servicer other than the Trustee in its role as successor to the Master
Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Securities Administrator,
the Master Servicer, the Servicers and each Rating Agency not less than 60 days
before the date specified in such notice, when, subject to Section 8.08, such
resignation is to take effect, upon (i) acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in Section
8.06 and (ii) delivery of all custodial files to the successor trustee or
successor custodian, as directed. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights represented by the Certificates may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which shall be delivered by the successor Trustee to each Servicer, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any removal
of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicers an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, such Person shall notify the Depositor
and the Securities Administrator of such succession or appointment and shall
furnish to the Depositor and the Securities Administrator in writing and in form
and substance reasonably satisfactory to the Depositor and the Securities
Administrator, all information reasonably necessary for the Depositor to
accurately and timely report, pursuant to Section 8.12(g), the event under Item
6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee as successor Master
Servicer under this Agreement to advance funds if as successor Master Servicer,
it becomes successor Servicer, shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the 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 applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to each
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each Trust REMIC and that in such capacity it shall:
(a) prepare for the Trustee to sign, and the Trustee shall sign, and
the Securities Administrator shall file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare for the
Trustee to sign, and the Trustee shall sign, and the Securities Administrator
shall file with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each Trust REMIC containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;
(b) apply for an employer identification number from the Internal
Revenue Service via Form SS-4 or any other acceptable method for all tax
entities (i.e., the Trust REMICs and the Grantor Trust), furnish to the
Depositor, not later than the Closing Date in the case of the Grantor Trust (the
corpus of which includes the Interest Rate Swap Agreement and the Interest Rate
Cap Agreement) and within thirty days of the Closing Date in the case of the
Trust REMICs, copies of such Form SS-4 requesting the employer identification
numbers, use its best efforts to obtain, as promptly as practicable, employer
identification numbers for any other Trust REMICs or Grantor Trusts created
pursuant to this Agreement (and provide such employer identification numbers to
the Depositor promptly upon receipt thereof), furnish to the Internal Revenue
Service, on Form 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code;
(c) deliver or cause to be delivered the federal taxpayer
identification number of the Grantor Trust on a correct, complete and duly
executed IRS Form W-9 of the Grantor Trust to the Swap Provider and the Cap
Provider promptly upon receipt of such number after applying for it pursuant to
8.11(b) above and, in any event, no later than the first Payment Date under the
Interest Rate Swap Agreement and the Interest Rate Cap Agreement, as applicable,
and if requested by the Swap Provider and the Cap Provider, an applicable IRS
Form W-8IMY;
(d) make an election that each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC be
treated as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(e) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(f) provide information necessary for the computation of tax imposed
on the Transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(g) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(h) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(i) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings);
(j) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other Person as may be required to sign such
returns by the Code or state or local laws, regulations or rules; and
(k) maintain records relating to each Trust REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information.
The Holder of the largest Percentage Interest of the Class RX
Certificates shall act as Tax Matters Person for the Class X REMIC, and the
holder of the largest Percentage Interest of the Class R Certificates shall act
as Tax Matters Person for Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC, in each case, within the meaning of
Treasury Regulations Section 1.860F-4(d), and the Securities Administrator is
hereby designated as agent of such Certificateholder for such purpose (or if the
Securities Administrator is not so permitted, such Holder shall be the Tax
Matters Person in accordance with the REMIC Provisions). In such capacity, the
Securities Administrator shall, as and when necessary and appropriate, represent
each Trust REMIC created hereunder in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of each Trust REMIC
created hereunder, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of each Trust
REMIC created hereunder, and otherwise act on behalf of each Trust REMIC in
relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts) and the rights of the
Offered Certificateholders to receive Basis Risk CarryForward Amounts and,
without duplication, Upper-Tier CarryForward Amounts as the beneficial ownership
of interests in the Grantor Trust, and not as obligations of any Trust REMIC
created hereunder, for federal income tax purposes. The Securities Administrator
shall file or cause to be filed with the Internal Revenue Service Form 1041 or
such other form as may be applicable and, as described above, shall apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for the Grantor Trust and shall furnish or cause
to be furnished, to the Class P Certificateholders, Class X Certificateholders
and Offered Certificateholders, the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk CarryForward
Amounts from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor any additional information or data that the
Securities Administrator may, from time to time, reasonably request to enable
the Securities Administrator to perform its duties under this Agreement;
provided, however, that the Depositor shall not be required to provide any
information regarding the Mortgage Loans that the applicable Servicer is
required to provide to the Securities Administrator pursuant to this Agreement.
The Depositor hereby indemnifies the Securities Administrator for any losses,
liabilities, damages, claims, or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide pursuant to this paragraph
accurate information or data to the Securities Administrator on a timely basis.
None of the Servicers, the Trustee, the Master Servicer or the
Securities Administrator shall (i) permit the creation of any interests in any
Trust REMIC other than the regular and residual interests set forth in the
Preliminary Statement, (ii) receive any amount representing a fee or other
compensation for services (except as otherwise permitted by this Agreement or
the related Mortgage Loan documents) or (iii) otherwise knowingly or
intentionally take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of any Trust REMIC as a REMIC or (ii) result in the imposition of a
tax upon any Trust REMIC or the Trust Fund (including but not limited to the tax
on "prohibited transactions" as defined in Section 860F(a)(2) of the Code and
the tax on contributions to a REMIC set forth in Section 860G(d) of the Code, or
the tax on "net income from foreclosure property") unless the Trustee and the
Securities Administrator receive an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and the Securities Administrator determines that taking such action is in the
best interest of the Trust Fund and the Certificateholders, at the expense of
the Trust Fund, but in no event at the expense of the Trustee or the Securities
Administrator) to the effect that the contemplated action will not, with respect
to the Trust Fund, any Trust REMIC created hereunder, endanger such status or,
unless the Trustee determines in its sole discretion to indemnify the Trust Fund
against such tax, result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24878 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee, the
Master Servicer or the Securities Administrator, respectively, if such tax
arises out of or results from negligence of the Trustee, the Master Servicer or
the Securities Administrator, as applicable, in the performance of any of its
obligations under this Agreement, (ii) the applicable Servicer and the
Depositor, jointly, in the case of any such minimum tax, and the applicable
Servicer if such tax arises out of or results from a breach by such Servicer of
any of its obligations under this Agreement, (iii) the Depositor if such tax
arises out of or results from the Depositor's obligation to repurchase a
Mortgage Loan pursuant to Section 2.03, (iv) the Sponsor if such tax arises out
of or results from the Sponsor's obligation to repurchase a Mortgage Loan
pursuant to the Representations and Warranties Agreement, or (v) in all other
cases, or if the Trustee, the Securities Administrator, the Master Servicer, the
applicable Servicer, the Depositor or the Sponsor fails to honor its obligations
under the preceding clause (i), (ii), (iii) or (iv), any such tax will be paid
with amounts otherwise to be distributed to the Certificateholders, as provided
in Section 4.02(a).
The Grantor Trust shall be treated as a WHFIT that is a NMWHFIT. The
Securities Administrator shall report as required under the WHFIT Regulations to
the extent such information as is reasonably necessary to enable the Securities
Administrator to do so, and is not in its possession, is provided to the
Securities Administrator on a timely basis. The Securities Administrator is
hereby directed to assume that DTC is the only "middleman" (as such term is
defined in the WHFIT Regulations) unless the Depositor provides the Securities
Administrator with the identities of other "middlemen" that are
Certificateholders. The Securities Administrator shall be entitled to rely on
the first sentence of this subparagraph (a) and shall be entitled to
indemnification in accordance with the terms of this Agreement in the event that
the Internal Revenue Service makes a determination that the first sentence of
this subparagraph (a) is incorrect.
The Securities Administrator, in its discretion, shall report
required WHFIT information using either the cash or accrual method, except to
the extent the WHFIT Regulations specifically require a different method. The
Securities Administrator shall be under no obligation to determine whether any
Certificateholder or other beneficial owner of a Certificate, to the extent the
Securities Administrator knows of any other beneficial owner of a Certificate,
uses the cash or accrual method. The Securities Administrator shall make
available information as required by the WHFIT Regulations to Certificateholders
annually. In addition, the Securities Administrator shall not be responsible or
liable for providing subsequently amended, revised or updated information to any
Certificateholder, unless requested by the Certificateholder.
The Securities Administrator shall not be liable for failure to meet
the reporting requirements of the WHFIT Regulations nor for any penalties
thereunder if such failure is due to: (i) the lack of reasonably necessary
information being provided to the Securities Administrator, (ii) incomplete,
inaccurate or untimely information being provided to the Securities
Administrator or (iii) the inability of the Securities Administrator, after good
faith efforts, to alter its existing information reporting systems to capture
information necessary to fully comply with the WHFIT Regulations for the 2007
calendar year. Absent receipt of information regarding any sale of Certificates,
including the price, amount of proceeds and date of sale from the beneficial
owner thereof or the Depositor, the Securities Administrator may assume there is
no secondary market trading of WHFIT interests.
To the extent required by the WHFIT Regulations, the Securities
Administrator shall use reasonable efforts to publish on an appropriate website
the CUSIP Numbers for the Certificates that represent ownership of a WHFIT. The
CUSIP Numbers so published will represent the Rule 144A CUSIP Numbers. The
Securities Administrator shall make reasonable good faith efforts to keep the
website accurate and updated to the extent CUSIP Numbers have been received. The
Securities Administrator shall not be liable for investor reporting delays that
result from the receipt of inaccurate or untimely CUSIP Number information.
The Securities Administrator shall be entitled to additional
reasonable compensation for changes in reporting required in respect of the
WHFIT Regulations that arise as a result of a change in the WHFIT Regulations or
a change in interpretation of the WHFIT Regulations by the Internal Revenue
Service, if such change requires, in the Securities Administrator's sole
discretion, a material increase in the Securities Administrator's reporting
obligations in respect of the related Grantor Trust.
Section 8.12 Periodic Filings. (a) The Securities Administrator, the
Master Servicer and each Servicer shall reasonably cooperate with the Depositor
in connection with the reporting requirements of the Trust under the Exchange
Act. The Securities Administrator shall prepare for execution by the Master
Servicer any Forms 8-K (other than the initial Form 8-K relating to this
Agreement, which shall be the responsibility of the Depositor to prepare and
file), 10-D and 10-K required by the Exchange Act and the rules and regulations
of the Commission thereunder, in order to permit the timely filing thereof,
pursuant to the terms of this Section 8.12, and the Securities Administrator
shall file (via the Commission's Electronic Data Gathering and Retrieval System,
or ▇▇▇▇▇) such Forms executed by the Master Servicer. Each of Form 10-D and Form
10-K requires the Depositor 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." A "yes" shall be indicated on each
Form 10-D and 10-K unless the Depositor shall notify the Securities
Administration 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
and no later than March 15th with respect to the filing of a report on Form
10-K, that a "no" should be indicated. The Securities Administrator and the
Master Servicer shall be entitled to rely on such notice (or lack thereof) in
preparing, executing and/or filing any such report.
(b) The Securities Administrator shall prepare and file on behalf of
the Trust any Form 10-D required by the Exchange Act, in form and substance as
required by the Exchange Act. The Securities Administrator will utilize
reasonable best efforts to file such Form 10-D on or by the 14th calendar day
after each Distribution Date, but in no event later than the filing deadline for
such Form 10-D (subject to permitted extensions under the Exchange Act). The
Securities Administrator shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the Monthly
Statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth in Exhibit R hereto and the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. 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 paragraph.
As set forth on Exhibit R hereto, within 5 calendar days after the
related Distribution Date, certain parties to this Agreement shall be required
to provide to the Securities Administrator and the Depositor, in
▇▇▇▇▇-compatible format, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, to the extent known by such applicable
parties, any Additional Form 10-D Disclosure, if applicable, together with an
Additional Disclosure Notification in the form of Exhibit V hereto ("Additional
Disclosure Notification"). 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. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph, including converting any such disclosure to an ▇▇▇▇▇-compatible
format.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-D to the Depositor sufficiently far
in advance of, but in no event later than the 11th calendar day after the
related Distribution Date, for the Depositor to review and verify such Form
10-D. In the absence of receipt of any written changes or approval, the
Securities Administrator shall be entitled to assume that such Form 10-D is in
final form and the Securities Administrator may proceed with procuring the
execution of and filing the Form 10-D. No later than 2 Business Days prior to
the 15th calendar day after the related Distribution Date, a duly authorized
representative of the Master Servicer shall sign the 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 Section
8.12(e)(ii). Promptly (but in any case within one 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 prepared and filed by
the Securities Administrator. The Depositor can be contacted at the Depositor's
address for notices set forth in Section 12.05(b)(ii)(a) or such other address
as to which the Depositor has provided prior written notice to the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their duties under this Section 8.12(b)
related to the timely preparation, execution and filing of Form 10-D is
contingent, in part, upon each Servicer, the Depositor and any other Person
obligated to provide Additional Form 10-D Disclosure as set forth on Exhibit R
hereto, observing all applicable deadlines in the performance of their duties
under this Section 8.12(b). 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 such Form 10-D, where such failure results from the
Securities Administrator's or the Master Servicer's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator, the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 10-D, not resulting from their own
negligence, bad faith or willful misconduct.
(c) On any date within 90 days (including the 90th day) after the
end of each fiscal year of the Trust or such earlier date as may be required by
the Exchange Act (the "10-K Filing Deadline"), commencing in March 2008, 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, (i) an annual compliance statement for the Securities
Administrator, the Master Servicer, each Servicer and each Subservicer engaged
by any Servicer, as described under Section 3.22, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for the Securities
Administrator, the Master Servicer, the Trustee (in its custodial capacity),
each Custodian, each Servicer, each Subservicer engaged by any Servicer and each
Servicing Function Participant utilized by a Servicer, the Master Servicer, the
Securities Administrator, the Trustee or each Custodian, as described under
Section 3.23, and (B) if any such report on assessment of compliance with
servicing criteria described under Section 3.23 identifies any material instance
of noncompliance, disclosure identifying such instance of noncompliance, or such
report on assessment of compliance with servicing criteria described under
Section 3.23 is not included as an exhibit to such Form 10-K, disclosure that
such report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for the
Securities Administrator, the Master Servicer, each Servicer, the Trustee (in
its custodial capacity), each Custodian, each Subservicer engaged by a Servicer
and each Servicing Function Participant utilized by a Servicer, the Master
Servicer or the Securities Administrator, the Trustee (in its custodial
capacity) or each Custodian, as described under Section 3.23, and (B) if any
registered public accounting firm attestation report described under Section
3.23 identifies any material instance of noncompliance, disclosure identifying
such instance of noncompliance, or if any such registered public accounting firm
attestation report is not included as an exhibit to such Form 10-K, disclosure
that such report is not included and an explanation why such report is not
included, and (iv) a certification substantially in the form attached hereto as
Exhibit L, with such changes as may be necessary or appropriate as a result of
changes promulgated by the Commission (the "Sarbanes Certification"), which
shall be signed by the senior officer of the Master Servicer in charge of
securitization. Any disclosure or information in addition to (i) through (iv)
above that is required to be included on Form 10-K ("Additional Form 10-K
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth on Exhibit S hereto, and the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. 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 paragraph.
As set forth on Exhibit S hereto, no later than March 1st of each
year (or, in the case of each Servicer, March 5th of each year) that the Trust
is subject to the Exchange Act reporting requirements, commencing in 2008, the
parties to this Agreement shall be required to provide to the Securities
Administrator and the Depositor, in ▇▇▇▇▇-compatible format, or in such other
form as otherwise agreed upon by the Securities Administrator and such party, to
the extent known by such applicable parties, any Additional Form 10-K
Disclosure, if applicable, together with an Additional Disclosure Notification.
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. The Depositor will
be responsible for all reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Form 10-K
Disclosure on Form 10-K pursuant to this paragraph, including converting any
such disclosure to an ▇▇▇▇▇-compatible format. The Securities Administrator
shall compile all such information provided to it in a Form 10-K prepared by it.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-K to the Depositor sufficiently far
in advance of, but in no event less than three (3) Business Days prior to, when
the Master Servicer is required to execute such Form 10-K to permit the
Depositor to review and verify such Form 10-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 10-K is in final form and the Securities Administrator may
proceed with procuring the execution of and filing the Form 10-K. No later than
5:00 p.m. Eastern Standard Time on the 4th Business Day prior to the 10-K Filing
Deadline, the senior officer in charge of the servicing function of the Master
Servicer 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 Section 8.12(e)(ii). Promptly (but in
any case within one 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 prepared and filed by the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their duties under this Section 8.12(c)
related to the timely preparation and filing of Form 10-K is contingent, in
part, upon each Servicer (and any Subservicer or Servicing Function Participant
engaged by a Servicer) and the Depositor and any other Person obligated to
provide Additional Form 10-K Disclosure as set forth on Exhibit S hereto,
observing all applicable deadlines in the performance of their duties under this
Section 8.12(c), Section 8.12(d), Section 3.22 and Section 3.23. Neither the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage or claim arising out of or with 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 or the Master Servicer's
inability or failure to obtain or receive, on a timely basis, any information
from any party hereto (other than the Securities Administrator, the Master
Servicer or any Subcontractor utilized by the Securities Administrator or the
Master Servicer) needed to prepare, execute or file such Form 10-K, not
resulting from their own negligence, bad faith or willful misconduct.
(d) Each of the Securities Administrator, the Master Servicer and
each Servicer shall provide, and each such party shall cause any Servicing
Function Participant engaged by it to provide, to the Person who signs the
Sarbanes Certification (the "Certifying Person"), by March 10th (March 15th with
respect to Saxon) (or if such day is not a Business Day, the immediately
preceding Business Day) 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 (each, a "Back-Up Certification"),
substantially in the form attached hereto as Exhibit M (with such changes as may
be necessary or appropriate as a result of changes promulgated by the
Commission) 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
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile at ▇▇▇-▇▇▇-▇▇▇▇. 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 part shall provide
a Back-Up Certification to the Certifying Person pursuant to this Section
8.12(d) 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 Sarbanes Certification in the event
that it does not receive any Back-Up Certification required to be furnished to
it pursuant to this Section 8.12(d). In the event that prior to the filing date
of the Form 10-K in March of each year, a Servicer, the Master Servicer or the
Securities Administrator has actual knowledge of information material to the
Sarbanes Certification, that party shall promptly notify the Depositor and each
of the other parties signing the certifications. In addition, (i) the Securities
Administrator shall indemnify and hold harmless the Depositor and the Sponsor
and their officers, directors, employees, agents and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Securities Administrator's obligations under
this Section 8.12(d) or any material misstatement or material omission in (w)
any compliance certificate delivered by the Securities Administrator or any
Subcontractor of the Securities Administrator pursuant to Section 3.22 of this
Agreement, (x) any assessment or attestation delivered by or on behalf of the
Securities Administrator or any Subcontractor of the Securities Administrator
pursuant to Section 3.23 of this Agreement, (y) any Back-Up Certification in the
form of Exhibit M delivered by the Securities Administrator pursuant to Section
8.12(d) of this Agreement or (z) any information about the Securities
Administrator provided by it pursuant to Item 2 (Legal Proceedings) of Exhibit
R, Item 1117 and Item 1119 of Exhibit T or Item 6.02 (Change of Securities
Administrator) of Exhibit S (collectively, the "Securities Administrator
Information"), or the Securities Administrator's negligence, bad faith or
willful misconduct in connection therewith, (ii) each Servicer, severally and
not jointly, shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator, the Master Servicer and their respective officers,
directors, employees, agents and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any breach of such Servicer's obligations under this Section 8.12(d) or any
material misstatement or material omission, negligence, bad faith or willful
misconduct of such Servicer in connection therewith, and (iii) the Master
Servicer shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Master Servicer's obligations under this Section 8.12(d) or any material
misstatement or material omission, negligence, bad faith or willful misconduct
of the Master Servicer in connection therewith. If the indemnification provided
for herein is unavailable or insufficient to hold harmless any indemnified
party, then (i) the Securities Administrator agrees in connection with a breach
of the Securities Administrator's obligations under this Section 8.12(d) or any
material misstatement or material omission contained in any Securities
Administrator Information, or any negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor and the Sponsor as a result of the losses, claims, damages or
liabilities of the Depositor and the Sponsor in such proportion as is
appropriate to reflect the relative fault of the Depositor and the Sponsor on
the one hand and the Securities Administrator on the other and (ii) each
Servicer, several and not jointly, agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and such Servicer, on the other hand, in connection with a breach of such
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of such
Servicer in connection therewith.
The obligations of the Securities Administrator, the Master
Servicer, each Servicer and each Servicing Function Participant and Servicing
under this Section 8.12(d) shall apply to the Securities Administrator, the
Master Servicer, each Servicer and each Servicing Function Participant that
serviced a Mortgage Loan during the applicable period, whether or not such
Securities Administrator, the Master Servicer, such Servicer or such Servicing
Function Participant is acting as Securities Administrator, Master Servicer, a
Servicer or a Servicing Function Participant, as applicable, at the time such
certification is required to be delivered. The indemnification and contribution
obligations set forth in this Section 8.12(d) shall survive the termination of
this Agreement or the earlier resignation or removal of the Securities
Administrator, the Master Servicer or the applicable Servicer, as applicable.
(e) (i) The obligations set forth in paragraphs (a) through (d) of
this Section 8.12 shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. Prior to
January 30 of the first year in which the Securities Administrator is able to do
so under applicable law, the Securities Administrator shall prepare and file a
Form 15 Suspension Notification with respect to the Trust, with a copy to the
Depositor. At the beginning of the immediately succeeding calendar year after
the filing of a Form 15 Suspension Notification, if the number of Holders of the
Offered Certificates of record exceeds the number set forth in Section 15(d) of
the Exchange Act or the regulations promulgated pursuant thereto which would
cause the Trust to again become subject to the reporting requirements of the
Exchange Act, the Securities Administrator shall recommence preparing and
filing, and the Master Servicer shall recommence executing, reports on Form
10-K, 10-D and 8-K as required pursuant to this Section 8.12 and the parties
hereto shall again have the obligations set forth in this Section.
(ii) In the event that the Securities Administrator is unable to
timely file with the Commission all or any required portion of any Form
8-K (other than the initial Form 8-K filed by the Depositor with respect
to this Agreement), 10-D or 10-K required to be filed pursuant to this
Agreement because required disclosure information was either not delivered
to it or delivered to it after the delivery deadlines (and the expiration
of the applicable grace period with respect to such deadline prior to such
failure to deliver resulting in an Event of Default) set forth in this
Agreement, the Securities Administrator will promptly electronically
notify the Depositor and if necessary, or applicable, the Servicers. In
the case of Form 10-D and 10-K, the Depositor, the Servicers and the
Securities Administrator will thereupon cooperate to prepare and timely
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 Securities
Administrator will, upon receipt of all disclosure information required to
be included on Form 8-K and as directed by 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, the party to
this Agreement deciding that an amendment to such Form 8-K, 10-D or 10-K
is required will notify the Depositor if the amendment pertains to an
additional disclosure item and the Depositor, the Securities Administrator
and the Servicers, and such parties will cooperate to prepare any
necessary Form 8-K/A, 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 duties under this Section 8.12(e) related to the
timely preparation and filing of Form 15, a Form 12b-25 or any amendment
to Form 8-K, 10-D or 10-K is contingent upon the Servicers and the
Depositor observing all applicable deadlines (and the related grace
periods thereto) in the performance of their duties under this Section
8.12 and Sections 3.22 and 3.23. 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 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 party hereto (other than the Securities
Administrator, the Master Servicer or any Subcontractor utilized by the
Securities Administrator or the Master Servicer) 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.
(f) On any date within four (4) Business Days after the occurrence
of an event requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and also if requested by the Depositor, the Securities Administrator
shall prepare and file on behalf of the Trust any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall file the initial Form 8-K in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be reported and prepared by
the party responsible for preparing such disclosure as set forth on Exhibit T
hereto and compiled by the Securities Administrator pursuant to the following
paragraph. 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 paragraph.
As set forth on Exhibit T hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon (Eastern
Standard Time) on the 2nd Business Day after the occurrence of a Reportable
Event, certain parties to this Agreement shall be required to provide to the
Depositor and the Securities Administrator, in ▇▇▇▇▇-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and
such party, to the extent known by such applicable parties, any Form 8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph, including the conversion of any such disclosure into an
▇▇▇▇▇-compatible format. 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.
(g) The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 8-K to the Depositor sufficiently far in
advance of, but in no event later than noon (Eastern Standard Time) on the 3rd
Business Day after a Reportable Event, to permit the Depositor to review and
verify such Form 8-K. 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, 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 and return an
electronic or fax copy of such signed Form 8-K (with an original executed hard
copy to follow by overnight mail) to the Securities Administrator. 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 Section
8.12(e)(ii). Promptly (but in any case within one 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 prepared and filed by
the Securities Administrator. The Depositor acknowledges that the performance by
the Securities Administrator and the Master Servicer of their duties under this
Section 8.12(g) related to the timely preparation and filing of Form 8-K is
contingent, in part, upon each Servicer, the Depositor and any other Person
obligated to provide Form 8-K Disclosure Information as set forth on Exhibit R
hereto, observing all applicable deadlines in the performance of their duties
under this Section 8.12(f). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or 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 or the Master Servicer's inability or failure to obtain or
receive, on a timely basis, any information or signature from any party hereto
(other than the Securities Administrator or the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(h) Neither the Master Servicer nor the Securities Administrator
shall have any liability for any loss, expense, damage or claim arising out of
or resulting from (i) the accuracy or inaccuracy of any Additional Form 10-D
Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure Information
(excluding any information therein provided by the Securities Administrator or
any Subcontractor utilized by the Securities Administrator) provided to the
Securities Administrator in connection with the preparation of Forms 10-D, 10-K
and 8-K pursuant to this Section 8.12, or (ii) the failure of the Depositor to
timely execute and return for filing any Forms 10-D, 10-K and 8-K required to be
filed by the Securities Administrator pursuant to this Section 8.12, in either
case, not resulting from the Securities Administrator's own negligence, bad
faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of the
Excess Reserve Fund Account, Swap Account and the Interest Rate Swap Agreement.
For federal income tax purposes, the Securities Administrator shall treat the
Excess Reserve Fund Account and the Swap Account as beneficially owned by the
holders of the Class X Certificates and shall treat such portion of the Trust
Fund as a grantor trust, within the meaning of subpart E, Part I of subchapter J
of the Code. The Securities Administrator shall treat the rights that each Class
of Offered Certificates has to receive payments of Basis Risk CarryForward
Amounts, and to the extent not paid from the Excess Reserve Fund Account, Basis
Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward
Amounts from the Swap Account (together with Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account), subject to the obligation to pay Class IO
Shortfalls, as rights and obligations under a notional principal contract
between the Class X Certificateholder and each such Class and beneficially owned
by each such Class through the Grantor Trust. Accordingly, each Class of
Certificates (excluding the Class X, Class P, the Class R and the Class RX
Certificates) will be comprised of two components - an Upper-Tier Regular
Interest and an interest in a notional principal contract, and the Class X
Certificates will be comprised of the following components: two Class X REMIC
Regular Interests (the Class X Interest and the Class IO Interest), an interest
in the Excess Reserve Fund Account (including the Interest Rate Cap Agreement),
subject to obligation to pay Basis Risk CarryForward Amounts, ownership of the
Swap Account and the Interest Rate Swap Agreement, subject to the obligation to
pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts, and the right to receive Class IO Shortfalls. The
Securities Administrator shall allocate the issue price for a Class of
Certificates among the respective components for purposes of determining the
issue price of the Upper-Tier Regular Interest component based on information
received from the Depositor. Unless otherwise advised by the Depositor in
writing, for federal income tax purposes, the Securities Administrator is hereby
directed to assign a value of zero to the right of each Holder of an Offered
Certificate to receive the related Basis Risk CarryForward Amounts and, without
duplication, the related Upper-Tier CarryForward Amounts for purposes of
allocating the purchase price of an Offered Certificate acquired by an initial
Holder thereof between such right and the related Upper-Tier Regular Interest.
Holders of Offered Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest available
for such payments and amounts payable on the Class IO Interest (such excess, a
"Class IO Shortfall"), first from interest and then from principal distributable
on the Offered Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such Offered Certificates based on
the amount of interest otherwise payable to such Class of Offered Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of Offered
Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Offered
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of Offered Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment or otherwise, such excess shall be deemed first paid to the
related Upper-Tier Regular Interest and then paid to the Class X Certificates in
a manner analogous to Class IO Shortfalls.
Section 8.14 Custodial Responsibilities. (a) Each Custodian shall
provide access to the Mortgage Loan Documents in possession of such Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon two (2) Business
Days' prior written request and during normal business hours at the office of
the applicable Custodian. Each Custodian shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at the expense of the person requesting such
access.
Upon receipt of a written request made by a Servicer in the form of
the Request for Release, the applicable Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) Each Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodians' duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of a
Servicer's obligations in connection with this Agreement for which such Servicer
has performed its obligations to indemnify the Custodians pursuant to Section
6.05 or (ii) because of willful misfeasance, bad faith, or negligence in the
performance of any of the Custodians' duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of such Custodian. Except as otherwise provided in this
Agreement or a separate letter agreement between the Depositor and the
applicable Custodian, such Custodian shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by such Custodian in the
ordinary course of its duties as Custodian under this Agreement or for any other
expenses incurred by such Custodian; provided, however, that no expense shall be
reimbursed by the Trust Fund under this Agreement if it would not constitute an
"unanticipated expense incurred by the REMIC" within the meaning of the REMIC
Provisions.
(c) Each Custodian may resign from its obligations hereunder upon 60
days' prior written notice to the Trustee, the Depositor and the Servicers. Such
resignation shall take effect upon (i) the appointment of a successor Custodian
reasonably acceptable to the Trustee within such 60 day period; and (ii)
delivery of all Custodial Files to the successor Custodian. The Trustee shall
have the right, but not the obligation, to become the successor Custodian. If no
successor Custodian is appointed within 60 days after written notice of the
applicable Custodian's resignation is received by the Trustee, such Custodian
may petition a court of competent jurisdiction to appoint a successor Custodian.
Upon such resignation and appointment of successor Custodian, the
applicable Custodian shall, at such Custodian's expense (unless for nonpayment,
then at the expense of the Trust), promptly transfer to the successor Custodian,
as directed in writing by the Trustee, all Mortgage Files being administered
under this Agreement.
(d) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodians
shall not utilize any Subcontractor for the performance of its duties hereunder
if such Subcontractor would be "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB. Each Custodian shall indemnify the
Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the breach by the applicable
Custodian of its obligation set forth in the preceding sentence or the failure
of any Custodian to perform any of its obligations under Section 3.23. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Custodian.
(e) Notwithstanding anything in this Agreement to the contrary, no
Custodian shall be required to deliver, or to cause to be delivered, information
relating to Item 1117 of Regulation AB pursuant to Sections 8.12(b) and (c) and
Exhibits T and U to this Agreement for any reporting period of the Trust in
which the Custodian's Weighted Average Percentage is less than 20%. The
"Custodian's Weighted Average Percentage" means, for the applicable reporting
period of the Trust and each Custodian, the quotient, expressed as a percentage,
of (A) the aggregate of the Stated Principal Balance for each Distribution Date
in such reporting period of the Mortgage Loans for which such Custodian acted as
Custodian divided by (B) the aggregate of the Pool Stated Principal Balance for
each Distribution Date in such reporting period.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of each Servicer's obligations under this Agreement, and
(except as set forth below) shall use its reasonable good faith efforts to cause
such Servicer to duly and punctually perform its duties and obligations
hereunder. Upon the occurrence of an Event of Default of which a Responsible
Officer of the Master Servicer has actual knowledge, the Master Servicer shall
promptly notify the Securities Administrator and the Trustee and shall specify
in such notice the action, if any, the Master Servicer plans to take in respect
of such default. So long as an Event of Default shall occur and be continuing,
the Master Servicer shall take the actions specified in Article VII.
If (i) a Servicer reports a delinquency on a monthly report and (ii)
such Servicer, by 4 p.m. (Eastern Standard Time) on the related Remittance Date,
neither makes an Advance nor provides the Securities Administrator and the
Master Servicer with an Officer's Certificate certifying that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, then
the Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date an Advance in
an amount equal to the difference between (x) with respect to each Monthly
Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the related Servicer was required to make an
Advance pursuant to this Agreement and (y) amounts deposited in the Collection
Account to be used for Advances with respect to such Mortgage Loan, except to
the extent the Master Servicer determines any such Advance to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. Subject to the
foregoing and Section 7.02, the Master Servicer shall continue to make such
Advances for so long as the related Servicer is required to do so under this
Agreement. If applicable, on the Business Day immediately preceding the
Distribution Date, the Master Servicer shall deliver an Officer's Certificate to
the Trustee and the Securities Administrator stating that the Master Servicer
elects not to make an Advance in a stated amount and detailing the reason(s) it
deems the Advance to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance. Any amounts deposited by the Master Servicer pursuant to this Section
9.01 shall be net of the Servicing Fee for the related Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i) termination
of any Servicer, (ii) the appointment of a successor Servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted hereunder, seek reimbursement therefor initially from
the terminated Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Master Servicer are not paid for
by the predecessor or successor Servicer (provided such successor Servicer is
not the Master Servicer), the Master Servicer may be reimbursed therefor by the
Trust for out of pocket costs incurred by the Master Servicer associated with
any such transfer of servicing duties from the Servicer to the Master Servicer
or any other successor Servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for any errors or omissions of such
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer, rights and obligations under this
Agreement without the prior written consent of the Master Servicer, which
consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. 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, directors, 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 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Servicers, the
Depositor, the Securities Administrator, the Custodians and the Trustee, for the
benefit of the Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) [Reserved]
(c) It is understood and agreed that the representations and
warranties set forth in this Section 9.03 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Servicers,
the Depositor, the Securities Administrator, the Custodians, the Trustee and the
Trust and hold them harmless against any loss, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and other
reasonable costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a material breach of the
Master Servicer's representations and warranties contained in Section 9.03(a)
above. It is understood and agreed that the enforcement of the obligation of the
Master Servicer set forth in this Section 9.03 to indemnify the Servicers, the
Depositor, the Securities Administrator, the Custodians, the Trustee and the
Trust constitutes the sole remedy of the Servicers, the Depositor, the
Securities Administrator, the Custodians, the Trustee and the Trust, respecting
a breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Servicers,
Depositor, the Master Servicer, Securities Administrator, the applicable
Custodian or the Trustee or notice thereof by any one of such parties to the
other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to cause to be deposited in
the Distribution Account any payment received by it from a Servicer or required
to be made by the Master Servicer under the terms of this Agreement which
continues unremedied for a period of two (2) 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 by any other party hereto;
(b) failure by the Master Servicer to duly 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 thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
provided that the thirty (30) day cure period shall not apply so long as the
Depositor is required to file any Forms 8-K, 10-D and 10-K required by the
Exchange Act with respect to the Trust Fund, the failure to comply with the
requirements set forth in Section 8.12, for which the grace period shall not
exceed the lesser of ten (10) calendar days or such period in which any
applicable Form 8-K, 10-D and 10-K required by the Exchange Act can be timely
filed (without taking into account any extensions);
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts 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 for
three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator, the Trustee and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, in each case, where such indictment materially
and adversely affects the ability of the Master Servicer to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least a majority
of the Voting Rights represented by the Certificates shall, terminate with cause
all the rights and obligations of the Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
All reasonable out-of-pocket costs and expenses incurred by the
Trustee in connection with the transfer of servicing from a terminated Master
Servicer, including, without limitation, any such costs or expenses associated
with the complete transfer of all servicing data and the completion, correction
or manipulation of such servicing data as may be required by the Trustee to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee (or any other successor Master Servicer appointed pursuant to
Section 9.06) to master service shall be paid by the terminated Master Servicer;
provided, however, that to the extent not previously reimbursed by the
terminated Master Servicer, such fees and expenses shall be payable to the
Trustee pursuant to Section 8.05.
Upon the occurrence of a Master Servicer Event of Default, the
Trustee shall provide the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a successor master servicer in the event the
Trustee should succeed to the duties of the Master Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least a majority of
the Voting Rights represented by the Certificates waive any default by the
Master Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Master Servicer 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 default or impair any right consequent
thereon except to the extent expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good standing and
acceptable to the Depositor and the Rating Agencies. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that in no event shall the Master
Servicing Fee paid to such successor master servicer exceed that paid to the
Master Servicer hereunder. In the event that the Master Servicer's duties,
responsibilities and liabilities under this Agreement are terminated, the Master
Servicer shall continue to discharge its duties and responsibilities hereunder
until the effective date of such termination with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement and shall
take no action whatsoever that might impair or prejudice the rights of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.03(a) hereof and the remedies available to
the Trustee under Section 9.03(b) hereof, it being understood and agreed that
the provisions of Section 9.03 hereof shall be applicable to the Master Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Master Servicer or the termination of this Agreement; or (ii) affect the right
of the Master Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer continues to perform its duties
hereunder prior to the date the successor master servicer fully assumes its
duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances as successor Servicer; provided, however, that any
failure to perform any duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee's capacity as
such successor, the Trustee shall have the same limitations on liability herein
granted to the Master Servicer. As compensation therefor, the Trustee shall be
entitled to receive the compensation, reimbursement and indemnities otherwise
payable to the Master Servicer, including the fees and other amounts payable
pursuant to Section 9.07 hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption as
successor master servicer of such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form 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 to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or
another successor master servicer satisfactory to the Trustee and the Depositor
shall have assumed, the Master Servicer's responsibilities and obligations under
this Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, ▇▇▇▇▇ Fargo Bank, National Association, as Master
Servicer, resigns under this Section 9.09, or is removed as Master Servicer
pursuant to Section 9.04, then at such time ▇▇▇▇▇ Fargo Bank, National
Association shall also resign (and shall be entitled to resign) as Securities
Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the Trustee
and the Depositor of a letter from each Rating Agency to the effect that such
action shall not result in a downgrade of the ratings assigned to any of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof,
the duties of the Master Servicer are transferred to a successor master
servicer, the entire compensation payable to the Master Servicer pursuant hereto
shall thereafter be payable to such successor master servicer but in no event
shall the fee payable to the successor master servicer exceed that payable to
the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, the Securities
Administrator, the Servicers or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such person against any liability
that would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Master Servicer with respect to the Mortgage Loans
under this Agreement and that in its opinion may involve it in any expenses or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom, shall
be liabilities of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Distribution Account in accordance with the
provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the performance of the obligations of the Servicers as required under this
Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Servicers, Depositor, the Sponsor, the
Securities Administrator, the Custodians, the Trustee and the Trust, and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liability, fees
and expenses that the Servicers, Depositor, the Sponsor, the Securities
Administrator, the Custodians, the Trustee or the Trust may sustain as a result
of the Master Servicer's willful malfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, including any failure by the
Master Servicer or any Subcontractor utilized by the Master Servicer to deliver
any information, report, certification or accountants' letter when and as
required under Sections 3.22, 3.23 or 8.12, including without limitation any
failure by the Master Servicer to identify any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB. The
Depositor, the Securities Administrator, the applicable Custodian, Sponsor, each
Servicer and the Trustee shall immediately notify the Master Servicer if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans
which would entitle the Depositor, the Securities Administrator, the applicable
Custodian, each Servicer, the Trustee or the Trust to indemnification under this
Section 9.12, whereupon the Master Servicer shall assume the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or them in respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under this
Agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this
Agreement, (ii) resulting from any breach of the applicable Servicer's
obligations in connection with this Agreement for which such Servicer has
performed its obligation to indemnify the Trustee and the Custodians pursuant to
Section 6.05 or (iii) the Master Servicer's willful malfeasance, bad faith or
negligence or by reason of its reckless disregard of its duties and obligations
under this Agreement; provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be
entitled to reimbursement for any such indemnified amount from funds on deposit
in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non-conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve 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) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights represented by the
Certificates relating to the time, method and place of conducting any
proceeding for any remedy available to the Securities Administrator, or
exercising or omitting to exercise any trust or power conferred upon the
Securities Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Servicers or the Trustee.
The Securities Administrator shall be permitted to utilize one or
more Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Securities Administrator complies with Section
3.02(e) as if the Securities Administrator were a "Servicer" pursuant to that
Section. The Securities Administrator shall indemnify the Depositor, such
Sponsor and any director, officer, employee or agent of the Depositor or such
Sponsor and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to the failure of the Securities Administrator to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Securities Administrator to identify
pursuant to Section 3.02(e) any Subcontractor that is a Servicing Function
Participant. This indemnity shall survive the termination of this Agreement or
the earlier resignation or removal of the Securities Administrator.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Securities Administrator to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of any Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Sponsor, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement, the Interest Rate Swap Agreement, the
Interest Rate Cap Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Securities Administrator's
execution and authentication of the Certificates. The Securities Administrator
shall not be accountable for the use or application by the Depositor or any
Servicer of any funds paid to the Depositor or any Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or any Servicer.
The Securities Administrator executes the Interest Rate Swap
Agreement, the Interest Rate Cap Agreement and the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement. Each of the undertakings and agreements made
on the part of the Securities Administrator on behalf of the Trust Fund in the
Interest Rate Swap Agreement, the Interest Rate Cap Agreement and the
Certificates is made and intended not as a personal undertaking or agreement by
the Trustee but is made and intended for the purpose of binding only the Trust
Fund.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Master Servicer Float Period. The
Securities Administrator and any director, officer, employee, agent or "control
person" within the meaning of the Securities Act of 1933, as amended, and the
Securities Exchange of 1934, as amended ("Control Person"), of the Securities
Administrator shall be indemnified by the Trust and held harmless against any
loss, liability or expense (including reasonable attorney's fees) (i) incurred
in connection with any claim or legal action relating to (a) this Agreement, the
Interest Rate Swap Agreement or the Interest Rate Cap Agreement, (b) the
Mortgage Loans or (c) the Certificates, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder, (ii)
incurred in connection with the performance of any of the Securities
Administrator's duties hereunder or under such other agreements, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of any of the Securities Administrator's duties
hereunder or (iii) incurred by reason of any action of the Securities
Administrator taken at the direction of the Certificateholders, provided that
any such loss, liability or expense constitutes an "unanticipated expense
incurred by the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Securities Administrator
hereunder. Without limiting the foregoing, and except for any such expense,
disbursement or advance as may arise from the Securities Administrator's
negligence, bad faith or willful misconduct, or which would not be an
"unanticipated expense" within the meaning of the second preceding sentence, the
Securities Administrator shall be reimbursed by the Trust for all reasonable
expenses, disbursements and advances incurred or made by the Securities
Administrator in accordance with any of the provisions of this Agreement with
respect to: (A) the reasonable compensation and the expenses and disbursements
of its counsel not associated with the closing of the issuance of the
Certificates, (B) the reasonable compensation, expenses and disbursements of any
accountant, engineer, appraiser or other agent that is not regularly employed by
the Securities Administrator, to the extent that the Securities Administrator
must engage such Persons to perform acts or services hereunder and (C) printing
and engraving expenses in connection with preparing any Definitive Certificates.
The Trust shall fulfill its obligations under this paragraph from amounts on
deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator functions are operated through an institutional trust
department of the Securities Administrator, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization, and
(iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency and
rates such successor, or the equivalent rating by S&P or ▇▇▇▇▇'▇. If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 10.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the Swap Provider and the Trustee and each Rating
Agency not less than 60 days before the date specified in such notice when,
subject to Section 10.08, such resignation is to take effect, and acceptance by
a successor Securities Administrator in accordance with Section 10.08 meeting
the qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least a majority of the
Voting Rights represented by the Certificates may at any time remove the
Securities Administrator and appoint a successor Securities Administrator by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which instruments
shall be delivered by the successor Securities Administrator to the Trustee, one
complete set to the Securities Administrator so removed and one complete set to
the successor so appointed. Notice of any removal of the Securities
Administrator shall be given to each Rating Agency by the successor Securities
Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Swap Provider
and the Depositor and to its predecessor Securities Administrator and the
Trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor Securities Administrator shall become
effective and such 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, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the Trustee,
the Master Servicer and the predecessor Securities Administrator shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Securities Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor, the Swap
Provider and the Trustee. If, pursuant to any provision hereof, the duties of
the Securities Administrator are transferred to a successor securities
administrator, the entire compensation payable to the Securities Administrator
pursuant hereto shall thereafter be payable to such successor securities
administrator but in no event shall the fee payable to the successor Securities
Administrator exceed that payable to the predecessor Securities Administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Sections 11.02 and 11.03, the obligations and
responsibilities of the Depositor, the Servicers, the Master Servicer, the
Securities Administrator and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by Saxon or Countrywide Servicing, individually or
together, of all Mortgage Loans (and REO Properties) at the price equal to the
sum of (i) 100% of the unpaid principal balance of each Mortgage Loan (other
than in respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (ii) the lesser of (x) the appraised value of any REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by Saxon or Countrywide Servicing, individually
or together, at the expense of Saxon or Countrywide Servicing, individually or
together, plus accrued and unpaid interest on each Mortgage Loan at the
applicable Mortgage Rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Rate, and (iii) any Swap Termination Payment
owed to the Swap Provider pursuant to the Interest Rate Swap Agreement, and (b)
the later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 11.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 11.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, the Servicers, individually or together, shall direct the
Securities Administrator promptly to send a Notice of Final Distribution to each
Certificateholder and the Swap Provider. If Saxon or Countrywide Servicing
individually elects to terminate the Trust Fund pursuant to clause (a) of
Section 11.01, such Servicer shall notify the other Servicers of such election
by the 15th day of the month preceding the month of the final distribution and
the other Servicers shall have 5 days to elect, by notice to the other Servicer,
to purchase the Mortgage Loans it services. If Saxon or Countrywide Servicing,
individually or together, so elect to terminate the Trust Fund pursuant to
clause (a) of Section 11.01, by the 25th day of the month preceding the month of
the final distribution, such Servicer or Servicers shall notify the Depositor,
the Master Servicer and the Securities Administrator of the date such Servicer
or Servicers intend to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in the Collection Account to be remitted to the
Securities Administrator for deposit in the Distribution Account on the Business
Day prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee and the applicable
Custodian, as applicable, of a Request for Release therefor, the Trustee (in its
custodial capacity) or the applicable Custodian, as applicable, shall promptly
release to the applicable Servicer the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers, the Master
Servicer, the Securities Administrator, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event that
Saxon or Countrywide Servicing, individually or together, exercise their
purchase option with respect to the Mortgage Loans as provided in Section 11.01,
the Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the applicable Servicer or all of the Servicers, as the case
may be, to the effect that the failure to comply with the requirements of this
Section 11.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on any Trust REMIC as defined in Section 860F of the Code, or (ii)
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are Outstanding:
(a) The Securities Administrator shall sell all of the assets of the
Trust Fund to the applicable Servicer and, no later than the next Distribution
Date after such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each Trust REMIC; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each Trust REMIC stating that pursuant to
Treasury Regulations Section 1.860F-1, the first day of the 90-day liquidation
period for each such Trust REMIC was the date on which the Securities
Administrator sold the assets of the Trust Fund to the applicable Servicer or
Servicers, as the case may be.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicers, the Master Servicer, the Securities
Administrator, the Custodians and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, the
Custodians or the Servicers, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided
that any amendment pursuant to clauses (iv) or (v) above shall not, as evidenced
by an Opinion of Counsel (which Opinion of Counsel shall not be an expense of
the Trustee, the Securities Administrator or the Trust Fund), adversely affect
in any material respect the interests of any Certificateholder; and provided,
further, that any such amendment pursuant to clauses (iv) or (v) above shall be
deemed not to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination by such Rating Agency as to the
materiality of any such amendment and will represent a determination only as to
the credit issues affecting any such rating. The Trustee, the Custodians, the
Depositor, the Master Servicer, the Securities Administrator and the Servicers
also may at any time and from time to time amend this Agreement, but without the
consent of the Certificateholders to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to (i) maintain the
qualification of each Trust REMIC and Grantor Trust under the Code, (ii) avoid
or minimize the risk of the imposition of any tax on any Trust REMIC or Grantor
Trust pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code or to facilitate the administration and reporting of each Trust REMIC
or Grantor Trust; provided that the Trustee has been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee or the Trust Fund, to the
effect that such action is necessary or helpful to, as applicable, (i) maintain
such qualification, (ii) avoid or minimize the risk of the imposition of such a
tax or (iii) comply with any such requirements of the Code; provided, however,
that any amendment that would otherwise require the consent of Holders pursuant
to the next paragraph shall be made only pursuant to the terms of the next
paragraph.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Master Servicer, the Securities Administrator, the
Custodians and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66?% of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (i), without the consent of the
Holders of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 66?%, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all such Certificates then
Outstanding; provided, further, that, without the consent of the Holders of a
majority of the Certificates then Outstanding, no such amendment shall result in
a Significant Change to a Permitted Activity.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies and the Swap Provider (with a copy of such
notice to the Trustee) of such amendment, stating the provisions of the
Agreement to be amended.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Master
Servicer or the Securities Administrator to enter into an amendment without
receiving an Opinion of Counsel (which Opinion shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
satisfactory to the Trustee, the Master Servicer or the Securities Administrator
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with
(including the obtaining of any required consents); and (ii) either (A) the
amendment does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 12.01.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
applicable Servicer at the direction and expense of the Depositor, but only upon
receipt of an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer, the Master
Servicer, the Securities Administrator or the Trustee and the appointment
of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly furnish
to each Rating Agency copies (which may be provided electronically via the
Securities Administrator's website) of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - SPG Finance,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (2) ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Servicing Oversight, ▇▇▇▇ ▇-▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇; (3) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Whole Loan Operations, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (4) ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and (5) in the case of a
direction or demand, notification to the following email addresses:
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇.Monaghan@ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Countrywide Servicing in its capacity
as Servicer, to Countrywide Home Loans Servicing LP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇, Email:
▇▇▇▇_▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇_▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or such other
address as may be hereafter furnished to the other parties hereto and the Swap
Provider by Countrywide Servicing, as Servicer, in writing; (c) in the case of
▇▇▇▇▇ Fargo in its capacity as Securities Administrator and Master Servicer,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other address as
may be hereafter furnished to the other parties hereto and the Swap Provider by
▇▇▇▇▇ Fargo in writing; (d) in the case of Saxon, to Saxon Mortgage Services,
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇,
President, with a copy to Saxon Capital, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department, or such other address as may
be hereafter furnished to the other parties hereto and the Swap Provider by
Saxon in writing, (e) in the case of ▇▇▇▇▇ Fargo, in its capacity as Servicer, ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇ MAC #X2302-033,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇ Fargo Bank, National
Association, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel
MAC X2401-06T or such other address as may be hereafter furnished to the other
parties hereto and the Swap Provider by ▇▇▇▇▇ Fargo, as Servicer; (f) in the
case of the Trustee, to Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Trust Administration
MS07H7 or such other address as the Trustee may hereafter furnish to the other
parties hereto and the Swap Provider and the Cap Provider by the Trustee in
writing; provided, however, all reports, statements, certifications and
information required to be provided to the Securities Administrator pursuant to
Section 8.12 for filing shall be electronically forwarded to
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇; (g) in the case of LaSalle, LaSalle Bank
National Association, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other address as may be hereafter furnished to the other parties
hereto and the Swap Provider and the Cap Provider by LaSalle in writing, (i) in
the case of the Swap Provider, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., Transaction
Management Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief
Legal Officer, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may be
hereafter furnished to the other parties hereto by the Swap Provider and the Cap
Provider in writing; and (i) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.04,
this Agreement may not be assigned by any Servicer without the prior written
consent of the Trustee and the Depositor; provided, however, each Servicer is
hereby authorized to enter into an Advance Facility under which (l) such
Servicer sells, assigns or pledges to an Advancing Person the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
and/or (2) an Advancing Person agrees to fund some or all P&I Advances or
Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
P&I Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which a Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming such Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first-out"
(FIFO) basis. Such documentation shall also require the applicable Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each applicable Mortgage Loan. The
applicable Servicer shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility trustee for all P&I Advances and Servicing Advances
funded by such Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 12.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 12.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Securities Administrator, the Master
Servicer, the Custodians and the Servicers without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
upon receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to such
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and none of the Trustee, the Securities Administrator, and the
Trust are otherwise obligated or liable to repay any Advances financed by the
lender; (b) such Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
and (c) none of the Securities Administrator, the Master Servicer or the Trustee
shall have any responsibility to track or monitor the administration of the
financing arrangement between the applicable Servicer and the lender.
Section 12.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third-party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor, the Master Servicer or the Trustee during such Person's normal
business hours, to examine all the books of account, records, reports and other
papers of such Person relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor, the Master Servicer or the Trustee
and to discuss its affairs, finances and accounts relating to the Mortgage Loans
with its officers, employees and independent public accountants (and by this
provision each Servicer hereby authorizes said accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense of
a Servicer incident to the exercise by the Depositor, the Master Servicer or the
Trustee of any right under this Section 12.09 shall be borne by such Servicer.
Section 12.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 12.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 12.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.13 Rights of the Third Parties. Each of the Swap
Provider, the Cap Provider and each Person entitled to indemnification hereunder
who is not a party hereto, shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto and shall have the
right to enforce its rights under this Agreement.
Section 12.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with all reasonable requests made by the Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, each Servicer,
the Securities Administrator, the Master Servicer, the Trustee and each
Custodian shall cooperate fully with the Depositor to deliver to the Depositor
(including its assignees or designees), any and all statements, reports,
certifications, records and any other information available to such party and
reasonably necessary in the good faith determination of the Depositor to permit
the Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to each Servicer, the Securities Administrator, the Master
Servicer and the Trustee and each Custodian, as applicable, reasonably believed
by the Depositor to be necessary in order to effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., as
Depositor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and Securities
Administrator
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
and President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: 1st Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Hang ▇▇▇
--------------------------------------
Name: Hang ▇▇▇
Title: Authorized Signer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Custodian
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION, as
Custodian
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodians, Securities Administrator and the Trustee and
not attached to the Pooling and Servicing Agreement)
SCHEDULE II
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
Series 2007-HE7
Representations and Warranties of Saxon
Saxon hereby makes with respect to the Mortgage Loans the following
representations and warranties to the Depositor, the Master Servicer, the
Securities Administrator and the Trustee as of the Closing Date. Capitalized
terms used but not otherwise defined shall have the meaning ascribed thereto in
the Agreement to which this Schedule II is attached.
(a) The Servicer is duly organized as a corporation and is validly
existing and in good standing under the laws of the State of Texas and is
licensed and qualified to transact any and all business contemplated by this
Pooling and Servicing Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property securing a Mortgage Loan is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement;
(b) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing Agreement
and has duly authorized by all necessary action on the part of the Servicer the
execution, delivery and performance of this Pooling and Servicing Agreement; and
this Pooling and Servicing Agreement, assuming the due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal, valid
and binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except to the extent that (a) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought;
(c) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Servicer and will not (A) result
in a breach of any term or provision of the organizational documents of the
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of the Servicer
taken as a whole;
(d) The Servicer is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac;
(e) No action, suit, proceeding or investigation is pending or, to
the best of the Servicer's knowledge, threatened against the Servicer, before
any court, administrative agency or other tribunal asserting the invalidity of
this Pooling and Servicing Agreement, seeking to prevent the consummation of any
of the transactions contemplated by this Pooling and Servicing Agreement or
which, either in any one instance or in the aggregate, may reasonably be
expected to result in a material adverse change in business, operations,
financial conditions, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the part of the
Servicer, or which would draw into question the validity of this Pooling and
Servicing Agreement or the Mortgage Loans or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Pooling and Servicing Agreement;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date;
(g) The Servicer represents that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that the Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement; and
a. With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer
provided monthly reports to the three credit repositories, the
Servicer has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulation, accurate
and complete information i.e., favorable and unfavorable) on
its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
SCHEDULE II-A
Further Representations and Warranties of Saxon
(h) Mortgage Loan Schedule. With respect to each Mortgage Loan, as
of the applicable Cut-off Date, each of (1) the last Due Date on which a payment
was actually applied to the outstanding principal balance of each Mortgage Loan;
(2) the Stated Principal Balance of each Mortgage Loan, after deduction of
payments of principal due and collected on or before the applicable Cut-off
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in each case,
as listed on the Mortgage Loan Schedule, is true and correct;
(i) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled Payment
is 30 days or more delinquent as of the Cut-off Date nor has any Payment been 30
days or more delinquent at any time from and after the Servicing Transfer Date
through the Cut-off Date;
(j) Original Terms Unmodified. With respect to each Mortgage Loan,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified by or on behalf of the Servicer from and after the Servicing
Transfer Date;
(k) No Satisfaction of Mortgage. With respect to each Mortgage Loan,
since the related Servicing Transfer Date and except for prepayments in full,
the Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. From
and after the Servicing Transfer Date, the Servicer has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Servicer waived any default resulting from any action or inaction by the
Mortgagor;
(l) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
delinquent, there is no material default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note;
(m) Escrow Payments/Interest Rate Adjustments. With respect to each
Mortgage Loan, since the Servicing Transfer Date, the servicing and collection
practices used by the Servicer with respect to such Mortgage Loan have been in
all material respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all material respects legal
and proper. With respect to escrow deposits and Escrow Payments, if any, all
such deposits and payments received by the Servicer are in the possession of, or
under the control of, the Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage (to the
extent not otherwise prohibited by law). From and after the Servicing Transfer
Date, all Mortgage Rate adjustments (if any) have been made in strict compliance
with state and federal law and the terms of the related Mortgage Note;
(n) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage and
coverage for such other hazards as are customary in the area where the Mortgaged
Property is located; and
(o) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has notified the
Servicer, and the Servicer has no knowledge, of any relief requested and allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
or local law.
SCHEDULE III
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
Series 2007-HE7
Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect to the Mortgage Loans the
following representations and warranties to the Master Servicer, the Securities
Administrator and the Trustee, as of the Closing Date. Capitalized terms used
but not otherwise defined shall have the meaning ascribed thereto in the
Agreement to which this Schedule III is attached.
(a) Immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or encumbrances
whatsoever.
SCHEDULE IV
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates,
Series 2007-HE7
Representations and Warranties of ▇▇▇▇▇ Fargo, as Servicer
▇▇▇▇▇ Fargo hereby makes the representations and warranties set
forth in this Schedule IV to the Depositor, the Master Servicer, the Securities
Administrator and the Trustee as of the Closing Date. Capitalized terms used but
not otherwise defined in this Schedule IV shall have the meaning ascribed
thereto in the Agreement to which this Schedule IV is attached.
▇. ▇▇▇▇▇ Fargo is duly organized as a corporation and is validly
existing and in good standing under the federal laws of the United States
of America and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by ▇▇▇▇▇ Fargo in
any state in which a Mortgaged Property securing a Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Agreement;
▇. ▇▇▇▇▇ Fargo has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of ▇▇▇▇▇ Fargo the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the
other parties to the Agreement, constitutes a legal, valid and binding
obligation of ▇▇▇▇▇ Fargo, enforceable against ▇▇▇▇▇ Fargo in accordance
with its terms; except to the extent that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws administered by the FDIC affecting the enforcement of
contract obligations of insured banks relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefor
may be brought;
c. The execution and delivery of this Agreement by ▇▇▇▇▇ Fargo, the
servicing of the Mortgage Loans required to be serviced by ▇▇▇▇▇ Fargo
hereunder, the consummation by ▇▇▇▇▇ Fargo of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of ▇▇▇▇▇
Fargo and will not (A) result in a breach of any term or provision of the
organizational documents of ▇▇▇▇▇ Fargo or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which ▇▇▇▇▇ Fargo
is a party or by which it may be bound, or any law, statute, rule, order,
regulation, judgment or decree applicable to ▇▇▇▇▇ Fargo or its property
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over ▇▇▇▇▇ Fargo; and ▇▇▇▇▇ Fargo is not a party to,
bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any law, statute, rule,
order, regulation, judgment or decree of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which (w) materially and adversely affects or, to ▇▇▇▇▇ Fargo's knowledge,
would in the future materially and adversely affect, the ability of ▇▇▇▇▇
Fargo to perform its obligations under this Agreement, (x) materially and
adversely affects or, to ▇▇▇▇▇ Fargo's knowledge, would in the future
materially and adversely affect, the business, operations, financial
condition, properties or assets of ▇▇▇▇▇ Fargo taken as a whole, (y)
impair the ability of the Trust to realize on the Mortgage Loans, or (z)
impair the value of the Mortgage Loans;
▇. ▇▇▇▇▇ Fargo has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans;
▇. ▇▇▇▇▇ Fargo does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
f. No action, suit, proceeding or investigation is pending or
threatened against ▇▇▇▇▇ Fargo, before any court, administrative agency or
other tribunal asserting the invalidity of this Agreement, seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of ▇▇▇▇▇ Fargo, or in any
material impairment of the right or ability of ▇▇▇▇▇ Fargo to carry on its
business substantially as now conducted, or in any material liability on
the part of ▇▇▇▇▇ Fargo, or which would draw into question the validity of
this Agreement or the Mortgage Loans or of any action taken or to be taken
in connection with the obligations of ▇▇▇▇▇ Fargo contemplated herein, or
which would be likely to impair materially the ability of ▇▇▇▇▇ Fargo to
perform under the terms of this Agreement;
g. No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by ▇▇▇▇▇ Fargo of, or compliance by ▇▇▇▇▇ Fargo with, this
Agreement or the servicing of the Mortgage Loans as evidenced by the
consummation by ▇▇▇▇▇ Fargo of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained prior to the Closing Date; and
h. With respect to each Mortgage Loan serviced by ▇▇▇▇▇ Fargo
hereunder, to the extent ▇▇▇▇▇ Fargo serviced such Mortgage Loan and to
the extent ▇▇▇▇▇ Fargo provided monthly reports to the three credit
repositories, ▇▇▇▇▇ Fargo has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE V
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates,
Series 2007-HE7
Representations and Warranties of Countrywide Servicing, as Servicer
Countrywide Servicing hereby makes the representations and
warranties set forth in this Schedule V to the Depositor, the Master Servicer,
the Securities Administrator and the Trustee as of the Closing Date.
(i) Due Organization and Authority. The Servicer is validly
existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in the states where the Mortgaged Property is located if the laws
of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer. The Seller has the power
and authority to execute and deliver this Pooling and Servicing Agreement
and to perform its obligations hereunder; the execution, delivery and
performance of this Pooling and Servicing Agreement (including all
instruments of transfer to be delivered pursuant to this Pooling and
Servicing Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
this Pooling and Servicing Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of
the Servicer, except as enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of creditors and (ii)
general principles of equity, whether enforcement is sought in a
proceeding in equity or at law. All requisite action has been taken by the
Servicer to make this Pooling and Servicing Agreement valid and binding
upon the Servicer in accordance with its terms;
(ii) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Pooling and
Servicing Agreement from any court, governmental agency or body, or
federal or state regulatory authority having jurisdiction over the
Servicer is required or, if required, such consent, approval,
authorization or order has been or will, prior to the related Closing
Date, be obtained;
(iii) Ordinary Course of Business. The consummation of the
transactions contemplated by this Pooling and Servicing Agreement are in
the ordinary course of business of the Servicer;
(iv) No Conflicts. Neither the execution and delivery of this
Pooling and Servicing Agreement by the Servicer, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Pooling and Servicing Agreement,
will conflict with or result in a breach of any of the terms, conditions
or provisions of the Servicer's partnership agreement or any legal
restriction or any agreement or instrument to which the Servicer is now a
party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject, or result in the creation or imposition of any
lien, charge or encumbrance that would have an adverse effect upon any of
its properties pursuant to the terms of any mortgage, contract, deed of
trust or other instrument, or impair the ability of the Trustee to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair
the ability of the Trustee to realize the full amount of any insurance
benefits accruing pursuant to this Pooling and Servicing Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to best of knowledge of the Servicer, threatened
against the Servicer, before any court, administrative agency or other
tribunal asserting the invalidity of this Pooling and Servicing Agreement,
seeking to prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which, either in
any one instance or in the aggregate, may reasonably result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right or ability of the Servicer to carry on its business substantially as
now conducted, or in any material liability on the part of the Servicer,
or which would draw into question the validity of this Pooling and
Servicing Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Pooling and Servicing
Agreement;
(vi) Ability to Perform; Solvency. The Servicer does not believe,
nor does it have any reason or cause to believe, that it cannot perform
each and every covenant contained in this Pooling and Servicing Agreement.
The Servicer is solvent;
(vii) Servicer's Ability to Service. The Servicer is an approved
seller/servicer for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac in good standing and is a
mortgagee approved by the Secretary of HUD. No event has occurred,
including a change in insurance coverage, which would make the Servicer
unable to comply with ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD eligibility
requirements;
(viii) Reasonable Servicing Fee. The Servicer acknowledges and
agrees that the Servicing Fee represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be
treated by the Servicer, for accounting and tax purposes, as compensation
for the servicing and administration of the Mortgage Loans pursuant to
this Pooling and Servicing Agreement;
(ix) No Untrue Information. Neither this Pooling and Servicing
Agreement nor any information, statement, tape, diskette, report, form, or
other document furnished or to be furnished pursuant to this Pooling and
Servicing Agreement or any Reconstitution Agreement or in connection with
the transactions contemplated hereby (including any Pass-Through Transfer
or Whole Loan Transfer) contains or will contain any untrue statement of
fact or omits or will omit to state a fact necessary to make the
statements contained herein or therein not misleading;
SCHEDULE VI
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates,
Series 2007-HE7
Representations and Warranties of ▇▇▇▇▇ Fargo, as Custodian
▇▇▇▇▇ Fargo hereby makes the representations and warranties set
forth in this Schedule VI to the Depositor, the Master Servicer, the Securities
Administrator and the Trustee as of the Closing Date. Capitalized terms used but
not otherwise defined shall have the meaning ascribed thereto in the Agreement
to which this Schedule VI is attached.
(a) ▇▇▇▇▇ Fargo is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by ▇▇▇▇▇ Fargo in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) ▇▇▇▇▇ Fargo has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of ▇▇▇▇▇ Fargo the execution, delivery and performance
of this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes a
legal, valid and binding obligation of ▇▇▇▇▇ Fargo, enforceable against
▇▇▇▇▇ Fargo in accordance with its terms, except that (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors"
rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(c) The execution and delivery of this Agreement by ▇▇▇▇▇ Fargo, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of ▇▇▇▇▇ Fargo and will not (i) result
in a material breach of any term or provision of the articles of
incorporation or by laws of ▇▇▇▇▇ Fargo, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which ▇▇▇▇▇ Fargo is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to ▇▇▇▇▇ Fargo of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ▇▇▇▇▇ Fargo; and
▇▇▇▇▇ Fargo is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it which breach or violation
may materially impair ▇▇▇▇▇ Fargo's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against ▇▇▇▇▇ Fargo that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of ▇▇▇▇▇ Fargo to perform
any of its obligations under this Agreement in accordance with the terms
thereof. For purposes of the foregoing, ▇▇▇▇▇ Fargo does not regard any
actions, proceedings or investigations "threatened" unless the potential
litigants or governmental authority has manifested to a member of the
▇▇▇▇▇ Fargo & Company Law Department having responsibility for litigation
matters involving the corporate trust activities of ▇▇▇▇▇ Fargo its
present intention to initiate such proceedings.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by ▇▇▇▇▇ Fargo of, or compliance by ▇▇▇▇▇ Fargo with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, ▇▇▇▇▇
Fargo has obtained the same.
SCHEDULE VII
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates,
Series 2007-HE7
Representations and Warranties of LaSalle, as Custodian
LaSalle hereby makes the representations and warranties set forth in
this Schedule VII to the Depositor, the Master Servicer, the Securities
Administrator and the Trustee as of the Closing Date. Capitalized terms used but
not otherwise defined shall have the meaning ascribed thereto in the Agreement
to which this Schedule VII is attached.
(a) LaSalle is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by LaSalle in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) LaSalle has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on the part
of LaSalle the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of LaSalle, enforceable against LaSalle in accordance
with its terms, except that (i) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by LaSalle, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of LaSalle and will not (i) result in a
material breach of any term or provision of the articles of incorporation
or by laws of LaSalle, (ii) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
LaSalle is a party or by which it may be bound, or (iii) constitute a
material violation of any statute, order or regulation applicable to
LaSalle of any court, regulatory body, administrative agency or
governmental body having jurisdiction over LaSalle; and LaSalle is not in
breach or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
LaSalle's ability to perform or meet any of its obligations under this
Agreement.
(d) No litigation is pending or, to the best of its knowledge,
threatened against LaSalle that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of
LaSalle to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by LaSalle of, or compliance by LaSalle with, this Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, LaSalle has
obtained the same.
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. A-1 [__]
A-2a [__]
A-2b [__]
A-2c [__]
M-1 [__]
M-2 [__]
M-3 [__]
M-4 [__]
M-5 [__]
B-1 [__]
B-2 [__]
B-3 [__]
Cut-off Date : September 1, 2007
First Distribution Date : October 25, 2007
Initial Certificate : $[___________]
Balance of this
Certificate
("Denomination")
Initial Certificate
Balances of all
Certificates of this Class : [A-1] $670,205,000
[A-2a] $181,345,000
[A-2b] $52,485,000
[A-2c] $45,710,000
[M-1] $24,192,000$
[M-2] $135,790,000
[M-3] $24,192,000
[M-4] $99,111,000
[M-5] $36,679,000
[B-1] $31,996,000
[B-2] $36,679,000
[B-3] $38,240,000
CUSIP : [Class A-1] 61756Y AA1
[Class ▇-▇▇] ▇▇▇▇▇▇ ▇▇▇
[Class A-2b] 61756Y AC7
[Class A-2c] 61756Y AD5
[Class M-1] 61756Y AE3
[Class M-2] 61756Y AF0
[Class M-3] 61756Y AG8
[Class M-4] 61756Y AH6
[Class M-5] ▇▇▇▇▇▇ ▇▇▇
[Class B-1] 61756Y AK9
[Class B-2] 61756Y AL7
[Class ▇-▇] ▇▇▇▇▇▇ ▇▇▇
ISIN : [Class A-1] US61756YAA10
[Class A-2a] US61756YAB92
[Class A-2b] US61756YAC75
[Class A-2c] US61756YAD58
[Class M-1] US61756YAE32
[Class M-2] US61756YAF07
[Class M-3] US61756YAG89
[Class M-4] US61756YAH62
[Class M-5] US61756YAJ29
[Class B-1] US61756YAK91
[Class B-2] US61756YAL74
[Class B-3] US61756YAM57
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates, Series 2007-HE7
[Class A ][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator, the Trustee or any
other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the
"Master Servicer"), securities administrator (the "Securities Administrator"), a
servicer and a custodian, Countrywide Home Loans Servicing LP, as a servicer,
Deutsche Bank National Trust Company, as trustee, and LaSalle Bank National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
--------------------------------------
Authenticated:
By
---------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
--------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
NO TRANSFER OF ANY CLASS P CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS P CERTIFICATE PROVIDES TO THE SECURITIES ADMINISTRATOR
THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN,
W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND
AGREES TO UPDATE SUCH FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS
REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON
LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH
TRANSFER. UNDER THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM
FROM A TRANSFEREE OF ANY CLASS P CERTIFICATE, THE SECURITIES ADMINISTRATOR SHALL
FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE SWAP PROVIDER AND THE
CAP PROVIDER. EACH HOLDER OF A CLASS P CERTIFICATE AND EACH TRANSFEREE THEREOF
SHALL BE DEEMED TO HAVE CONSENTED TO THE SECURITIES ADMINISTRATOR FORWARDING TO
THE SWAP PROVIDER AND THE CAP PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS
PROVIDED AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY
PURPORTED SALES OR TRANSFERS OF ANY CLASS P CERTIFICATE TO A TRANSFEREE WHICH
DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THIS
AGREEMENT.
Certificate No. : P-1
Cut-off Date : September 1, 2007
First Distribution Date : October 25, 2007
Percentage Interest of this :
Certificate ("Denomination") [___]%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates, Series 2007-HE7
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator, the Trustee or any other party to the
Agreement referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the
"Master Servicer"), securities administrator (the "Securities Administrator"), a
servicer and a custodian, Countrywide Home Loans Servicing LP, as a servicer,
Deutsche Bank National Trust Company, as trustee, and LaSalle Bank National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purposes, or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the 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 be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
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.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
--------------------------------------
Authenticated:
By
---------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator, 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 Securities Administrator, nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP individually, or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
-------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE 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 (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : September 1, 2007
First Distribution Date : October 25, 2007
Percentage Interest of : 100%
this Certificate
("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates, Series 2007-HE7
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Securities Administrator
Trustee or any other party to the Agreement referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the
"Master Servicer"), securities administrator (the "Securities Administrator"), a
servicer and a custodian, Countrywide Home Loans Servicing LP, as a servicer,
Deutsche Bank National Trust Company, as trustee, and LaSalle Bank National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Servicers, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
--------------------------------------
Authenticated:
By
---------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc., or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
-------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-2
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 (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : RX-1
Cut-off Date : September 1, 2007
First Distribution Date : October 25, 2007
Percentage Interest of : 100%
this Certificate
("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates, Series 2007-HE7
Class RX
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class RX Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any other party to the Agreement referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class RX Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the
"Master Servicer"), securities administrator (the "Securities Administrator"), a
servicer and a custodian, Countrywide Home Loans Servicing LP, as a servicer,
Deutsche Bank National Trust Company, as trustee, and LaSalle Bank National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class RX
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class RX Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Servicers, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class RX Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class RX Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class RX Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class RX Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class RX Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class RX Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class RX Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class RX Certificate, (C) not to cause income with respect to the Class RX
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class RX Certificate or to cause the Transfer of the Ownership Interest in this
Class RX Certificate to any other Person if it has actual knowledge that such
Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class RX Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
--------------------------------------
Authenticated:
By
---------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
-------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN
INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE DEPOSITOR OR THE
SERVICERS TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE
AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR
SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY
TO THE SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
NO TRANSFER OF ANY CLASS X CERTIFICATES SHALL BE MADE UNLESS THE
PROPOSED TRANSFEREE OF SUCH CLASS X CERTIFICATE PROVIDES TO THE SECURITIES
ADMINISTRATOR THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS
FORM W-8BEN, W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM
THERETO)) AND AGREES TO UPDATE SUCH FORMS (I) UPON EXPIRATION OF ANY SUCH FORM,
(II) AS REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III)
PROMPTLY UPON LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A
CONDITION TO SUCH TRANSFER. UNDER THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX
CERTIFICATION FORM FROM A TRANSFEREE OF ANY CLASS X CERTIFICATE, THE SECURITIES
ADMINISTRATOR SHALL FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE
SWAP PROVIDER AND THE CAP PROVIDER. EACH HOLDER OF A CLASS X CERTIFICATE AND
EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE SECURITIES
ADMINISTRATOR FORWARDING TO THE SWAP PROVIDER AND THE CAP PROVIDER ANY SUCH TAX
CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH THESE TRANSFER
RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS X CERTIFICATE TO A
TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED NULL
AND VOID UNDER THIS AGREEMENT.
Certificate No. : X-1
Cut-off Date : September 1, 2007
First Distribution Date : October 25, 2007
Percentage Interest of this : [___]%
Certificate ("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates, Series 2007-HE7
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator, the Trustee or any other party to the
Agreement referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the
"Master Servicer"), securities administrator (the "Securities Administrator"), a
servicer and a custodian, Countrywide Home Loans Servicing LP, as a servicer,
Deutsche Bank National Trust Company, as trustee, and LaSalle Bank National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the 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 be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or Section 4975
of the Code or any materially similar provisions of applicable Federal, state or
local law ("Similar Law") or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator, or (ii) if the transferee is an insurance company,
a representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60, or (iii) in the case of a
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a Securities Administrator of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Securities
Administrator, which Opinion of Counsel shall not be an expense of the Trustee,
the Securities Administrator, the Servicers or the Trust Fund, addressed to the
trustee, to the effect that the purchase or holding of such Certificate will not
constitute or result in a non-exempt prohibited transaction within the meaning
of ERISA, Section 4975 of the Code or any Similar Law and will not subject the
Depositor, the Securities Administrator, the Trustee or the Servicers to any
obligation in addition to those expressly undertaken in the Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
--------------------------------------
Authenticated:
By
---------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
-------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF [CUSTODIAN] [TRUSTEE]
July 31, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Services Manager, MSAC ▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇ Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration - MS07H7
LaSalle Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer, Securities Administrator, a
Servicer and a Custodian, Countrywide Home Loans Servicing LP, as a
Servicer, Deutsche Bank National Trust Company, as Trustee, and
LaSalle Bank National Association, as a Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust, Series 2007-HE7
Ladies and Gentlemen:
In accordance with Section 2.02 of the above captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule for which the undersigned is acting as
[Custodian] [Trustee] (other than any Mortgage Loan listed in the attached
schedule), it has received:
(ii) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(iii) except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The [Custodian] [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 [Custodian] [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, perfection
or priority of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the [Custodian] [Trustee] has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as Noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee]
By:
--------------------------------------
Name:
Title:
[▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Custodian]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF [CUSTODIAN] [TRUSTEE]
[date]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Services Manager, MSAC ▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇ Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration - MS07H7
LaSalle Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer, Securities Administrator, a
Servicer and a Custodian, Countrywide Home Loans Servicing LP, as a
Servicer, Deutsche Bank National Trust Company, as Trustee, and
LaSalle Bank National Association, as a Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust, Series 2007-HE7
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
[Custodian] [Trustee], hereby certifies that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original or county certified recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage endorsed in blank, which may be
included in a blanket assignment or assignments in the form provided in
Section 2.01 of the Pooling and Servicing Agreement.
(iv) Except with respect to MERS Designated Mortgage Loans, the
original or county certified recorded assignment or assignments of the
Mortgage showing a complete chain of assignment from the originator to the
last endorsee.
(v) The original or copy of lender's title policy, and all riders
thereto or any one of an original title binder, an original preliminary
title report or an original title commitment.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7) and (9)
of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The [Custodian] [Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The
[Custodian] [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,
suitability, perfection or priority of any such Mortgage Loan. Notwithstanding
anything herein to the contrary, the [Custodian] [Trustee] has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee]
By:
--------------------------------------
Name:
Title:
[▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Custodian]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7,
Mortgage Pass-Through Certificates,
Series 2007-HE7
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
(1) The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R][RX]
Certificate (the "Residual Certificate") issued pursuant to the Pooling
and Servicing Agreement (the "Agreement"), relating to the
above-referenced Series, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as Depositor, Saxon Mortgage Services, Inc., as a Servicer, ▇▇▇▇▇ Fargo
Bank, National Association, as Master Servicer, Securities Administrator,
a Servicer and a Custodian, Countrywide Home Loans Servicing LP, as a
Servicer, LaSalle Bank National Association, as a Custodian, and Deutsche
Bank National Trust Company, as Trustee (the "Trustee"). Capitalized terms
used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee for the benefit of the
Depositor and the Trustee.
(2) The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Residual Certificate for its own account.
The Transferee has no knowledge that any such affidavit is false.
(3) The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Residual Certificate to Persons
that are Non-Permitted Transferees; (ii) such tax will be imposed on the
transferor, or, if such Transfer is through an agent (which includes a
broker, nominee or middleman) for a Person that is a Non-Permitted
Transferee, on the agent; and (iii) the Person otherwise liable for the
tax shall be relieved of liability for the tax if the subsequent
Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such
Person does not have actual knowledge that the affidavit is false.
(4) The Transferee has been advised of, and understands that a tax
will be imposed on a "pass through entity" holding the Residual
Certificate if at any time during the taxable year of the pass through
entity a Person that is a Non-Permitted Transferee is the record holder of
an interest in such entity. The Transferee understands that such tax will
not be imposed for any period with respect to which the record holder
furnishes to the pass through entity an affidavit that such record holder
is a Permitted Transferee and the pass through entity does not have actual
knowledge that such affidavit is false. (For this purpose, a "pass through
entity" includes a regulated investment company, a real estate investment
trust or common trust fund, a partnership, trust or estate, and certain
cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass through entities as a nominee for
another Person.)
(5) The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of
an Ownership Interest in the Residual Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee
expressly agrees to be bound by and to abide by the provisions of Section
5.02(c) of the Agreement and the restrictions noted on the face of the
Residual 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 Residual Certificate, and in connection with any Transfer by a
Person for whom the Transferee is acting as nominee, trustee or agent, and
the Transferee will not Transfer its Ownership Interest or cause any
Ownership Interest to be Transferred to any Person that the Transferee
knows is a Non-Permitted Transferee. In connection with any such Transfer
by the Transferee, the Transferee agrees to deliver to the Trustee a
certificate substantially in the form set forth as Exhibit H to the
Agreement (a "Transferor Certificate") to the effect that, among other
things, such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is a Non-Permitted Transferee.
(7) The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with
respect to the Residual Certificate. The Transferee has historically paid
its debts as they have come due and intends to pay its debts as they come
due in the future. The Transferee intends to pay all taxes due with
respect to the Residual Certificate as they become due.
(8) The Transferee's taxpayer identification number is __________.
(9) The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
(10) The Transferee is aware that the Residual Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
(11) The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of the
Transferee or any other U.S. Person.
(12) Check the applicable paragraph:
|_| The present value of the anticipated tax liabilities
associated with holding the Residual Certificate, as
applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Residual Certificate;
(ii) the present value of the expected future distributions on such
Residual Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Residual Certificate as the related REMIC
generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
|_| The transfer of the Residual Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Residual Certificate will only be taxed
in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Residual Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Residual Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
|_| None of the above.
(13) The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code
or a plan subject to any Federal, state or local law that is substantially
similar to Title I of ERISA or Section 4975 of the Code, and the
Transferee is not acting on behalf of or investing plan assets of such a
plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of ______, 20__.
-----------------------------------------
Print Name of Transferee
By:
--------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ______, 20__.
-----------------------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [__]
▇▇▇▇▇ Fargo Bank, National Association,
as Securities Administrator
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE7
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE7,
Mortgage Pass-Through Certificates, Series 2007-HE7, Class
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
-----------------------------------------
Print Name of Transferor
By:
--------------------------------------
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [__]
▇▇▇▇▇ Fargo Bank, National Association,
as Securities Administrator
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE7
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.,
as Swap Provider and Cap Provider
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: NY ISD SPV Team
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., Series 2007-HE7, Mortgage
Pass-Through Certificates, Series 2007-HE7, Class
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class ▇-▇, ▇▇▇▇▇ ▇-▇▇,
▇▇▇▇▇ ▇-▇▇, Class A-2c, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class B-1, Class B-2, or Class B-3 Certificate or we are not an employee benefit
plan that is subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or a plan or arrangement that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, or a plan subject
to materially similar provisions of applicable federal, state or local law, nor
are we acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such acquisition or, with respect to a
Class X Certificate, the purchaser is an insurance company that is purchasing
this certificate with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
In connection with our purchase of the Certificates, we acknowledge
and agree that (i) none of you nor any of your affiliates is acting as a
fiduciary or financial or investment adviser for us; (ii) we are not relying
(for purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of any of you or your
affiliates with respect to the Certificates; (iii) none of you nor any of your
affiliates has given to us (directly or indirectly through any other person) any
assurance, guarantee or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2007-HE7 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2007-HE7 and the other material transaction documents related
thereto.
The Transferee's taxpayer identification number is __________. The
Transferee attaches hereto Forms W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9. The Transferee hereby consents to the attached Forms being
provided to the Swap Provider and the Cap Provider.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $______(1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
3. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
______________________________________________________________________________
Print Name of Transferee
By: ___________________________________
Name:
Title:
Date:__________________________________
-------------
(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.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
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,
(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 Transferee
By:
--------------------------------------
Name:
Title:
IF AN ADVISER:
-----------------------------------------
Print Name of Buyer
Date:
------------------------------------
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: Trustee
Re: In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, pursuant to
the Pooling and Servicing Agreement, dated as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer, Securities Administrator, a
Servicer and a Custodian, Countrywide Home Loans Servicing LP, as a
Servicer, Deutsche Bank National Trust Company, as Trustee, and
LaSalle Bank National Association, as a Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust, Series 2007-HE7, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Delivery Method (check one)
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to its
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to Collection Account as provided
in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to its
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the [Custodian]/[Trustee], please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SAXON MORTGAGE SERVICES, INC.,
as Servicer]
By:
--------------------------------------
Name:
Title:
Date:
[▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
as Servicer]
By:
--------------------------------------
Name:
Title:
Date:
[COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer]
By:
--------------------------------------
Name:
Title:
Date:
Acknowledged and Agreed:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
--------------------------------------
Name:
Title:
Date:
[▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Custodian]
By:
--------------------------------------
Name:
Title:
Date:
[LASALLE BANK NATIONAL ASSOCIATION, as
Custodian]
By:
--------------------------------------
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Sponsor and which shall be retained by the applicable Servicer or delivered to
and retained by the Trustee (in its custodial capacity) or the applicable
Custodian:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and
signed (which may be by facsimile signature) in the name of the last
endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, unless the Trustee (in
its custodial capacity) or the applicable Custodian, as applicable,
is advised in writing by the applicable Originator (if required by
the applicable Purchase Agreement) or the Depositor, as applicable,
that state law does not so allow;
(b) the original of any guaranty executed in connection with the
Mortgage Note if any;
(c) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the applicable
Originator, the Depositor, title company, escrow company or
attorney, as applicable, shall deliver or cause to be delivered to
the Trustee (in its custodial capacity) or the applicable Custodian,
as applicable, a photocopy of such Mortgage certified by the
applicable Originator or the Depositor, title company, escrow
company or attorney, as applicable, to be a true and complete copy
of such Mortgage and shall forward to the Trustee (in its custodial
capacity) or the applicable Custodian, as applicable, such original
recorded Mortgage within 14 days following the applicable
Originator's or the Depositor's receipt of such Mortgage from the
applicable public recording office; or in the case of a Mortgage
where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation
in a public recording office, a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording;
(e) the original Assignment of Mortgage for each Mortgage Loan endorsed
in blank, which may be included in a blanket assignment or
assignments (except with respect to MERS Designated Mortgage Loans);
(f) the originals of all intervening assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage
Loan) to the last endorsee with evidence of recording thereon or a
certified true copy of such intervening assignments of Mortgage
submitted for recording, or if any such intervening assignment has
not been returned from the applicable recording office or has been
lost or if such public recording office retains the original
recorded assignments of Mortgage, the Depositor shall deliver or
cause to be delivered a photocopy of such intervening assignment,
certified by the originator, Depositor, title company, escrow
company or attorney, as applicable, to be a true and complete copy
of such intervening assignment and shall forward to the Trustee (in
its custodial capacity) or the applicable Custodian, as applicable,
such original recorded intervening assignment within 14 days
following the Depositor's receipt of such from the applicable public
recording office; or in the case of an intervening assignment where
a public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost
after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening
assignment;
(g) the original or copy of mortgagee title insurance policy, a
photocopy of the mortgage title insurance policy, or attorney's
opinion of title and abstract of title, or, in the event such title
policy is unavailable, a copy of the related policy binder or
commitment for title from the title insurance company;
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided);
(i) residential loan application;
(j) Mortgage Loan closing statement;
(k) verification of employment and income, if applicable;
(l) verification of acceptable evidence of source and amount of down
payment;
(m) credit report on Mortgagor;
(n) residential appraisal report;
(o) photograph of the Mortgaged Property;
(p) survey of the Mortgaged Property;
(q) copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.;
(r) all required disclosure statements;
(s) if required in an appraisal, termite report, structural engineer's
report, water potability and septic certification; and
(t) sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION
TO BE PROVIDED WITH FORM 10-K
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE7, issued pursuant
to the Pooling and Servicing Agreement, dated as of September 1,
2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇
Fargo Bank, National Association, as Master Servicer, Securities
Administrator, a Servicer and a Custodian, Saxon Mortgage Services,
Inc., as a Servicer, Countrywide Home Loan Servicing LP, as a
Servicer, Deutsche Bank National Trust Company, as Trustee, and
LaSalle Bank National Association, as a Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust, Series 2007-HE7
I, [identify the certifying individual], certify that:
(1) I have reviewed this annual report on Form 10-K ("Annual
Report"), and all reports on Form 10-D (collectively with this Annual
Report, the "Reports") required to be filed in respect of period covered
by this Annual Report, of the Trust;
(2) Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this Annual Report;
(3) Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for the period
covered by this Annual Report is included in the Reports;
(4) Based on my knowledge and the compliance statements required in
this Annual Report under Item 1123 of Regulation AB, and except as
disclosed in the Reports, the Servicers have fulfilled their obligations
under the Pooling and Servicing Agreement in all material respects; and
(5) All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation reports
on assessment of compliance with servicing criteria required to be
included in this Annual Report in accordance with Item 1122 of Regulation
AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an
exhibit to this Annual Report, except as otherwise disclosed in this
Annual Report. Any material instances of non-compliance described in such
reports have been disclosed in this Annual Report.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: the Trustee,
the Master Servicer, the Securities Administrator, the Servicers and the
Custodians.
Date:
-----------------------------
----------------------------------
[Signature]
[Title]
EXHIBIT M
FORM OF ANNUAL CERTIFICATION TO BE
PROVIDED TO THE MASTER SERVICER
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE7, issued pursuant
to the Pooling and Servicing Agreement, dated as of September 1,
2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇
Fargo Bank, National Association, as Master Servicer, Securities
Administrator, a Servicer and a Custodian, Saxon Mortgage Services,
Inc., as a Servicer, Countrywide Home Loan Servicing LP, as a
Servicer, Deutsche Bank National Trust Company, as Trustee, and
LaSalle Bank National Association, as a Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust, Series 2007-HE7
I, ________________________________, the _______________________ of [NAME
OF COMPANY], certify to [the Purchaser], [the Depositor], and the Master
Servicer, and their officers, with the knowledge and intent that they will
rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[_] that were delivered by the
Company to ▇▇▇▇▇ Fargo pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Company Servicing
Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to ▇▇▇▇▇ Fargo;
(4) I am responsible for reviewing the activities performed by the Company
as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer and
Subcontractor pursuant to the Agreement, have been provided to ▇▇▇▇▇
Fargo. Any material instances of noncompliance described in such reports
have been disclosed to [▇▇▇▇▇ Fargo]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
---------------------------
By:
Name:
---------------------------------
EXHIBIT N
RESERVED
EXHIBIT O
ACCREDITED AGREEMENTS
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated September 28, 2007
(the "Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Holdings LLC,
successor-in-interest by merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the
"Assignor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. (the "Assignee") and Accredited
Home Lenders, Inc. (the "Company"):
For and in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Eighth Amended
and Restated Mortgage Loan Purchase and Warranties Agreement, dated as of August
1, 2006 as amended by the First Amendment and Joinder to the Purchase Agreement,
dated as of December 21, 2006 (the "Purchase Agreement") between the Assignor,
as purchaser, and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.05 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to a trust, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 (the "Trust") created pursuant to a
Pooling and Servicing Agreement, dated as of September 1, 2007 (the "Pooling and
Servicing Agreement"), among the Assignee, Deutsche Bank National Trust Company,
as trustee (including its successors in interest and any successor trustee under
the Pooling and Servicing Agreement, the "Trustee"), ▇▇▇▇▇ Fargo Bank, National
Association, as master servicer, securities administrator, a servicer and a
custodian ("▇▇▇▇▇ Fargo"), Saxon Mortgage Services Inc., as a servicer
("Saxon"), Countrywide Home Loans Servicing LP, as a servicer (together with
▇▇▇▇▇ Fargo and Saxon, each in its capacity as a servicer, including their
respective successors-in-interest and any successor servicer under the Pooling
and Servicing Agreement, the "Servicers") and LaSalle Bank National Association,
as a custodian (together with ▇▇▇▇▇ Fargo in its capacity as a custodian, the
"Custodians"). The Company hereby acknowledges and agrees that from and after
the date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicers acting on the Trust's behalf) shall
have all the rights and remedies available to the Assignor, insofar as they
relate to the Mortgage Loans, under the Purchase Agreement, including, without
limitation, the enforcement of the document delivery requirements set forth in
Section 6 of the Purchase Agreement, and shall be entitled to enforce all of the
obligations of the Company thereunder insofar as they relate to the Mortgage
Loans, and (iv) all references to the Assignor or the Custodian under the
Purchase Agreement insofar as they relate to the Mortgage Loans shall be deemed
to refer to the Trust (including the Trustee, and the Servicers acting on the
Trust's behalf). Neither the Company nor the Assignor shall amend or agree to
amend, modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any may affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) It is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) It has full power and authority to execute, deliver and perform
its obligations under this Agreement and has full power and authority to
perform its obligations under the Purchase Agreement. The execution by it
of this Agreement is in the ordinary course of its business and will not
conflict with, or result in a breach of, any of the terms, conditions or
provisions of its charter or bylaws or any legal restriction, or any
material agreement or instrument to which it is now a party or by which it
is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which it or its property is subject. The execution,
delivery and performance by it of this Agreement have been duly authorized
by all necessary corporate action. This Agreement has been duly executed
and delivered by it, and, upon the due authorization, execution and
delivery by the Assignor and the Assignee, will constitute its the valid
and legally binding obligation, enforceable against it in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by it in connection with the execution, delivery or
performance by it of this Agreement, or if required, such approval has
been obtained prior to the date hereof; and
(d) Except as previously identified by it to the Assignor in
writing, there is no action, suit, proceeding or investigation pending or
threatened against it, before any court, administrative agency or other
tribunal, which would draw into question the validity of this Agreement or
the Purchase Agreement, or which, either in any one instance or in the
aggregate, would result in any material adverse change in its ability to
perform its obligations under this Agreement or the Purchase Agreement,
and it is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
represents and warrants, for the benefit of the Assignor, the Assignee and the
Trust, that with respect to the Mortgage Loans, the representations and
warranties set forth on Exhibit B hereto are, in each case, true and correct as
of the date hereof as if such representations and warranties were made on the
date hereof unless otherwise specifically stated in such representations and
warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicers acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee, and
the Servicers acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. This Agreement and the Purchase Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Purchase Agreement
(to the extent assigned hereunder) by Assignor to Assignee and by Assignee to
the Trust and nothing contained herein shall supersede or amend the terms of the
Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument. This should be added
to all docs, right after it talks about execution in counterparts. Make sure the
doc defines itself as "Agreement", or revise as needed.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
ACCREDITED HOME LENDERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Associate General
Counsel-Finance AVP & Ass't Sec'y
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Vice President
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
(Delivered to the Trustee on the Closing Date)
Exhibit B
Representations and Warranties Regarding Individual Mortgage Loans
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule delivered to the Purchaser by the Seller on the Servicing
Transfer Date (the "Mortgage Loan Schedule") is complete, true and correct;
(b) Payments Current. Except as set forth on the Mortgage Loan
Schedule, all payments required to be made up to the Servicing Transfer Date for
the Mortgage Loan under the terms of the Mortgage Note, other than payments not
yet 30 days delinquent, have been made and credited. Except as set forth on the
Mortgage Loan Schedule, no payment required under the Mortgage Loan is 30 days
or more delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan;
(c) No Outstanding Charges. Except as set forth on the Mortgage Loan
Schedule, to the Seller's knowledge as of the Servicing Transfer Date there are
no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. As of the closing date for the
securitization (the "Securitization Closing Date"), the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in
Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. As of the Securitization Closing Date, the Seller has not engaged in,
and has no knowledge of the Mortgagor's having engaged in, any act or omission
which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. As of the Securitization
Closing Date, (i) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure and
all predatory, abusive and fair lending laws applicable to the Mortgage Loan,
including, without limitation, any provisions relating to the Illinois Interest
Act and Prepayment Penalties, have been complied with, (ii) the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and (iii) the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements. Clause (i) of
this representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the related Mortgage
Loan Schedule, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgaged Property may be a leasehold estate,
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home;
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part XII, Section 102 of the
▇▇▇▇▇▇ Mae Selling Guide and shall conform with the Underwriting Guidelines. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, (v) as of
the origination date of the related Manufactured Home Mortgage Loan, the related
manufactured dwelling will be the principal residence of the related Mortgagor,
and (vi) such Manufactured Home Mortgage Loan is (x) a qualified mortgage under
Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended, and (y)
secured by manufactured housing treated as a single family residence under
Section 25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. Clause (v) of this representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) on the Mortgaged Property, including
all buildings and improvements on the Mortgaged Property and all installations
and mechanical, electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser. As used in
Subsection 9.02 of the Purchase Agreement, "enforceable" shall be deemed to be
subject to bankruptcy laws and general principles of equity;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation or similar occurrence with respect to the
origination of a Mortgage Loan has taken place on the part of any Person,
including, without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;
(l) Full Disbursement of Proceeds. Except to the extent the Mortgage
Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed ▇▇▇▇▇▇ ▇▇▇ form 442 has
been delivered to the Purchaser within sixty (60) days after the Closing Date,
as of the Securitization Closing Date the Mortgage Loan has been closed and the
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. As of the Securitization Closing
Date, all costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Ownership. As of the Closing Date, the Seller was the sole owner
of record and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser, the
Seller will retain the Mortgage Files or any part thereof with respect thereto
not delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan. As of the Closing Date, upon payment of the Purchase Price, the
Mortgage Loan was not assigned or pledged, and the Seller had good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
had full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to the Purchase Agreement and following the sale of each Mortgage Loan, the
Purchaser will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. As of
the Closing Date, the Seller intended to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Seller will
have no right to modify or alter the terms of the sale of the Mortgage Loan and
the Seller will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. As of the Securitization Closing Date, no Mortgage Loan had
an LTV at origination greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is
issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (i), (ii) and (iii) of paragraph (j) of
Subsection 9.02 of the Purchase Agreement, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Except as set forth on the Mortgage Loan Schedule
and other than payments due but not yet 30 days or more delinquent, to the
Seller's knowledge as of the Servicing Transfer Date, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. Unless otherwise disclosed by the Seller to
the Purchaser in writing on or prior to the Servicing Transfer Date, except as
insured against by the related title insurance, to the Seller's knowledge as of
the Servicing Transfer Date there are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and unless otherwise disclosed by the Seller to the
Purchaser in writing on or prior to the Servicing Transfer Date, to the Seller's
knowledge as of the Servicing Transfer Date no improvements on adjoining
properties encroach upon the Mortgaged Property. As of the Closing Date, and to
the Seller's knowledge as of the Servicing Transfer Date, no improvement located
on or being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation;
(t) Origination; Payment Terms. As of the Securitization Closing
Date, either (a) the Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or other similar institution
which is supervised and examined by a federal or state authority, or (b) the
following requirements have been met with respect to the Mortgage Loan: the
Seller meets the requirements set forth in clause (a), and (i) such Mortgage
Loan was underwritten in accordance with standards established by the Seller,
using application forms and related credit documents approved by the Seller,
(ii) the Seller approved each application and the related credit documents
before a commitment by the correspondent was issued, and no such commitment was
issued until the Seller agreed to fund such Mortgage Loan, (iii) the closing
documents for such Mortgage Loan were prepared on forms approved by the Seller,
and (iv) such Mortgage Loan was actually funded by the Seller and was purchased
by the Seller at closing or soon thereafter. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the information and statements therein
not misleading. Principal payments on the Mortgage Loan are required to commence
no more than sixty days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as the Lifetime Rate Cap and
the Periodic Cap, are as set forth on the Mortgage Loan Schedule. Except with
respect to a "balloon" Mortgage Loan, the Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the Mortgage Loan Schedule, the Mortgage Loan is payable on the
first day of each month. There are no Convertible Mortgage Loans which contain a
provision allowing the Mortgagor to convert the Mortgage Note from an adjustable
interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to the Purchase Agreement as Exhibit G). The Mortgage
Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and the
Seller has not made any representations to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date, and
to the Seller's knowledge as of the Servicing Transfer Date, the Mortgaged
Property is capable of being lawfully occupied under applicable law. As of the
Closing Date, and to the Seller's knowledge as of the Servicing Transfer Date,
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. The Seller has no knowledge as of the
Servicing Transfer Date of any circumstances or conditions with respect to the
Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage File or the
Mortgagor's credit standing, other than the subprime nature of such credit
standing, that can reasonably be expected to cause private institutional
investors who invest in mortgage loans similar to the Mortgage Loan, to regard
the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A to the Purchase Agreement,
except for such documents the originals of which have been delivered to the
Custodian;
(bb) Condominiums/Planned Unit Developments. As of the
Securitization Closing Date, if the Mortgaged Property is a condominium unit or
a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project Mortgage Loan was
originated in accordance with, and, at the time of origination, the Mortgaged
Property met the guidelines set forth in the Seller's Underwriting Guidelines in
effect at such time;
(cc) Transfer of Mortgage Loans. As of the Securitization Closing
Date, the Assignment of Mortgage with respect to each Mortgage Loan is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located. The transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or similar statutory provisions in effect
in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and such provision is
enforceable;
(ee) [Reserved];
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. As of the Securitization
Closing Date, any future advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) lien
priority by a title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to the Seller's knowledge as of the Servicing Transfer
Date, there is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. As of the Closing
Date, there have not been any condemnation proceedings with respect to the
Mortgaged Property and as of the Servicing Transfer Date the Seller has no
knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller through the Servicing Transfer Date, and, as of such
date, there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments
collected by the Seller have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage. An
escrow of funds is not prohibited by applicable law and all escrows that have
been established have been established in an amount sufficient to pay for every
item that remains unpaid and has been assessed but is not yet due and payable.
No escrow deposits or Escrow Payments or other charges or payments due the
Seller have been capitalized by the Seller under the Mortgage or the Mortgage
Note. All Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage and Mortgage
Note on the related Interest Rate Adjustment Date. If, pursuant to the terms of
the Mortgage Note, another index was selected for determining the Mortgage
Interest Rate, the same index was used with respect to each Mortgage Note which
required a new index to be selected, and such selection did not conflict with
the terms of the related Mortgage Note. The Seller executed and delivered any
and all notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the Monthly
Payment adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. Unless otherwise disclosed by the
Seller to the Purchaser in writing, to the Seller's knowledge as of the
Servicing Transfer Date no action, inaction or event has occurred and no state
of facts exists or has existed that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable, special hazard
insurance policy, or bankruptcy bond, irrespective of the cause of such failure
of coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Seller or by any officer, director, or employee of the Seller or any designee of
the Seller or any corporation in which the Seller or any officer, director, or
employee had a financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. Unless otherwise disclosed
by the Seller to the Purchaser in writing, as of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, there is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue. Unless otherwise
disclosed by the Seller to the Purchaser in writing, to the Seller's knowledge,
as of the Servicing Transfer Date, based upon customary and prudent residential
mortgage industry underwriting standards, there is no violation of any
environmental law, rule or regulation with respect to the Mortgage Property, and
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to use and enjoyment of
said property;
(mm) Servicemembers Civil Relief Act. The Mortgagor has not notified
the Seller, and the Seller has no knowledge as of the Servicing Transfer Date of
any relief requested or allowed to the Mortgagor under the Servicemembers' Civil
Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. As of the Securitization Closing Date,
the Mortgagor has executed one or more statements to the effect that the
Mortgagor has received all disclosure materials required by, and the Seller has
complied with, all applicable law with respect to the making of the Mortgage
Loans. The Seller shall maintain such statement(s) in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. As of the
Securitization Closing Date, no Mortgage Loan was made in connection with the
construction (other than a "construct-to-perm" loan) or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. Unless otherwise disclosed by the
Seller to the Purchaser in writing, the Seller has no knowledge as of the
Servicing Transfer Date of any circumstances existing that could reasonably be
expected to adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay during any
period materially faster or slower than similar mortgage loans held by the
Seller generally secured by properties in the same geographic area as the
related Mortgaged Property;
(rr) No Defense to Insurance Coverage. Unless otherwise disclosed by
the Seller to the Purchaser in writing, to the Seller's knowledge as of the
Servicing Transfer Date no action has been taken or failed to be taken, no event
has occurred and no state of facts exists or has existed on or prior to the
Closing Date (whether or not known to the Seller on or prior to such date) which
has resulted or will result in an exclusion from, denial of, or defense to
coverage under any primary mortgage insurance (including, without limitation,
any exclusions, denials or defenses which would limit or reduce the availability
of the timely payment of the full amount of the loss otherwise due thereunder to
the insured) whether arising out of actions, representations, errors, omissions,
negligence, or fraud of the Seller, the related Mortgagor or any party involved
in the application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of such
insurer's breach of such insurance policy or such insurer's financial inability
to pay;
(ss) Escrow Analysis. With respect to each Mortgage, prior to the
Closing Date the Seller had within the previous twelve months (unless such
Mortgage was originated within such twelve month period) analyzed the required
Escrow Payments for each Mortgage and adjusted the amount of such payments so
that, assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced by the
Seller in all material respects in strict compliance with Accepted Servicing
Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(vv) Leaseholds. As of the Closing Date and to Seller's knowledge as
of the Servicing Transfer Date, if the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the collateral assignment of the lease without the lessor's
consent (or such consent has been obtained) and the acquisition by the holder of
the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu
of foreclosure or provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the termination
thereof upon the lessee's default without the holder of the Mortgage being
entitled to receive written notice of, and opportunity to cure, such default,
(b) allow the termination of the lease in the event of damage or destruction as
long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or (d) permit
any increase in rent other than pre-established increases set forth in the
lease; (4) the original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(ww) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note, except as set forth
on the related Mortgage Loan Schedule, and (ii) no such Prepayment Penalty may
be imposed for a term in excess of five (5) years from the date of origination.
Clause (ii) of this representation and warranty is a Deemed Material and Adverse
Representation;
(xx) Predatory Lending Regulations. None of the Mortgage Loans (a)
is covered by the Home Ownership and Equity Protection Act of 1994 or (b) is
classified as a "high cost home," "threshold," "covered" (excluding a "covered
home loan" as defined in clause (1) of the definition of such term under the New
Jersey Home Ownership Security Act of 2002), "high risk home", "predatory" or
similar loan under any other applicable federal, state or local law (including
without limitation any regulation or ordinance) (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) is a Mortgage Loan categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard & Poor's
Glossary, and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act. This representation
and warranty is a Deemed Material and Adverse Representation;
(yy) [Reserved];
(zz) Compliance with Anti-Money Laundering Laws. As of the Closing
Date and to Seller's knowledge as of the Servicing Transfer Date, the Seller has
complied with all applicable anti-money laundering laws, regulations and
executive orders, including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"). Additionally, no Mortgage Loan
is subject to nullification pursuant to Executive Order 13224 (the "Executive
Order") or the regulations promulgated by the Office of Foreign Assets Control
of the United States Department of Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations; and no Mortgagor is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a "blocked person" for purposes of the OFAC Regulations;;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(ccc) Fair Credit Reporting Act. Accredited has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis. This representation and warranty is a
Deemed Material and Adverse Representation;
(ddd) Mortgagor Selection. As of the Securitization Closing Date,
the Mortgagor was not encouraged or required to select a Mortgage Loan product
offered by the Seller which is a higher cost product designed for less
creditworthy mortgagors, unless at the time of the Mortgage Loan's origination,
such Mortgagor did not qualify taking into account credit history and debt to
income ratios for a lower cost credit product then offered by the Seller or any
Affiliate of the Seller. If, at the time of loan application, the Mortgagor may
have qualified for a lower cost credit product then offered by any mortgage
lending Affiliate of the Seller, the Seller referred the related Mortgagor's
application to such Affiliate for underwriting consideration. This
representation and warranty is a Deemed Material and Adverse Representation;
(eee) Underwriting Methodology. As of the Securitization Closing
Date, the methodology used in underwriting the extension of credit for each
Mortgage Loan does not rely solely on the extent of the related Mortgagor's
equity in the collateral as the principal determining factor in approving such
extension of credit. The methodology employed objective criteria such as the
Mortgagor's income, assets and liabilities, to the proposed mortgage payment
and, based on such methodology, the Mortgage Loan's originator made a reasonable
determination that at the time of origination the Mortgagor had the ability to
make timely payments on the Mortgage Loan. Such underwriting methodology
confirmed that at the time of origination (application/approval) the related
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan,
relying on the Mortgagor's representation of the Mortgagor's income in the case
of loan payments which did not require verification of the Mortgagor's income.
This representation and warranty is a Deemed Material and Adverse
Representation;
(fff) Mortgage Loans with Prepayment Premiums. As of the
Securitization Closing Date, with respect to any Mortgage Loan that contains a
provision permitting imposition of a Prepayment Penalty upon a prepayment prior
to maturity: (i) the Mortgage Loan provides some benefit to the Mortgagor (e.g.,
a rate or fee reduction) in exchange for accepting such Prepayment Penalty, (ii)
prior to the Mortgage Loan's funding, the Mortgagor had the option of obtaining
the Mortgage Loan without a requirement for payment of such a premium, (iii) the
Prepayment Penalty was adequately disclosed to the Mortgagor pursuant to
applicable state, local and federal law, and (iv) such Prepayment Penalty shall
not be imposed in any instance where the Mortgage Loan is accelerated or paid
off in connection with the workout of a delinquent Mortgage Loan or due to the
Mortgagor's default notwithstanding that the terms of the Mortgage Loan or state
or federal law might permit the imposition of such penalty. This representation
and warranty is a Deemed Material and Adverse Representation;
(ggg) Purchase of Insurance. As of the Securitization Closing Date,
no Mortgagor was required to purchase any credit life, disability, accident,
health insurance product or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan. This representation and warranty is a Deemed
Material and Adverse Representation;
(hhh) Disclosure of Fees and Charges. As of the Securitization
Closing Date, all fees and charges (including finance charges), whether or not
financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan, have been disclosed in writing
to the Mortgagor in accordance with applicable state and federal law and
regulation. This representation and warranty is a Deemed Material and Adverse
Representation;
(iii) No Arbitration. No Mortgage Loan originated on or after August
1, 2004, requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation; and
(jjj) Second Lien Mortgage Loans. With respect to each Second Lien
Loan: (1) the related First Lien Loan does not permit negative amortization; (2)
where required or customary in the jurisdiction in which the Mortgaged Property
is located, the original lender has filed for record a request for notice of any
action by the related senior lienholder, and the Seller has notified such second
lienholder in writing of the existence of the Second Lien Loan and requested
notification of any action to be taken against the Mortgagor by such senior
lienholder; either (a) no consent for the Second Lien Loan is required by the
holder of the related First Lien Loan or (b) such consent has been obtained and
is contained in the related Mortgage File; (3) to Seller's knowledge, the
related First Lien Loan is in full force and effect, and there is no default,
lien, breach, violation or event which would permit acceleration existing under
such First Lien Loan or Mortgage Note, and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit acceleration
under such First Lien Loan; and (4) the related first lien Mortgage contains a
provision which provides for, or applicable law requires the, giving notice of
default or breach to the mortgagee under the Mortgage Loan and allows such
mortgagee to cure any default under the related First Lien Mortgage.
==============================================================================
EIGHTH AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
ACCREDITED HOME LENDERS, INC.,
Seller
----------
Dated as of August 1, 2006
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files........................................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller.................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans..............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties.............................................
Subsection 9.04 [RESERVED].............................................
Subsection 9.05 Mortgage Loans with First Payment Defaults;
Repurchase.............................................
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay
in Full................................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims...........................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY...........................................
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. CONFIDENTIALITY..............................................
SECTION 33 COMPLIANCE WITH REGULATION AB................................
Subsection 33.01 Intent of the Parties; Reasonableness..................
Subsection 33.02 Additional Representations and Warranties of the
Seller.................................................
Subsection 33.03 Information To Be Provided by the Seller...............
Subsection 33.04 Indemnification........................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT J FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EIGHTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
This EIGHTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of August 1, 2006, by and
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation, having an
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"),
and Accredited Home Lenders, Inc., a California corporation, having an office at
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Seventh Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of June 1, 2006 (the "Original Purchase Agreement"), pursuant to which
the Seller may sell, from time to time, to the Purchaser, and the Purchaser may
purchase, from time to time, from the Seller, certain conventional adjustable
and fixed rate B/C, first and second lien residential mortgage loans (the
"Mortgage Loans") on a servicing released basis as described therein, and which
shall be delivered in pools of whole loans (each, a "Mortgage Loan Package") on
various dates as provided therein (each, a "Closing Date"); and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications as set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Eighth Amended and Restated Mortgage Loan
Purchase and Warranties Agreement and all amendments hereof and supplements
hereto.
ALTA: The American Land Title Association or any successor
thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to (1) any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value and (2) any First Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the First Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are junior or equal in
priority to the First Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of the date
hereof, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Subsection 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇
Mae Servicers' Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor's Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law regardless of whether such law is presently,
or in the future becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicing Agreement: The Interim Servicing Agreement,
between Purchaser and Seller, as servicer, dated as of August 1, 2002, as
amended by Amendment No. 1, dated as of January 15, 2004, which agreement
provides for the Seller to service the Mortgage Loans for an interim period.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, or was made within 12 months following such acquisition, the
purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule attached to the Purchase Price
and Terms Agreement as the "Points Schedule" together with the schedule of
Mortgage Loans setting forth the following information with respect to each
Mortgage Loan in the related Mortgage Loan Package: (1) the Seller's Mortgage
Loan identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code indicating
whether the Mortgagor is self-employed; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the number and type of residential
units constituting the Mortgaged Property; (7) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (8)
with respect to each First Lien Loan, the Loan-to-Value Ratio at origination,
and with respect to each Second Lien Loan, the CLTV at origination; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10) the date on which
the Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, such Due Date; (11) the stated
maturity date; (12) the first payment date; (13) the amount of the Monthly
Payment as of the related Cut-off Date; (14) the last payment date on which a
payment was actually applied to the outstanding principal balance; (15) the
original principal amount of the Mortgage Loan; (16) the principal balance of
the Mortgage Loan as of the close of business on the related Cut-off Date, after
deduction of payments of principal due and collected on or before the related
Cut-off Date; (17) delinquency status as of the related Cut-off Date; (18) with
respect to each Adjustable Rate Mortgage Loan, the Interest Rate Adjustment
Date; (19) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap
under the terms of the Mortgage Note; (21) with respect to each Adjustable Rate
Mortgage Loan, a code indicating the type of Index; (22) the type of Mortgage
Loan (i.e., Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan);
(23) a code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (24) a code indicating the documentation
style (i.e., full, alternative or reduced); (25) asset verification (Y/N); (26)
the loan credit classification (as described in the Underwriting Guidelines);
(27) whether such Mortgage Loan provides for a Prepayment Penalty and, if
applicable, the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a Home Loan; (39) a code indicating whether the
Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; (47) with respect to the related Mortgagor, the debt-to-income
ratio; (48) the MERS Identification Number, if applicable; (49) with respect to
each Second Lien Loan, the product type of the First Lien Loan. With respect to
the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth
the following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Seller, will not or, in the case of a proposed advance, would not, be ultimately
recoverable from related Insurance Proceeds, Liquidation Proceeds or otherwise.
The determination by the Seller that it has made a Nonrecoverable Advance or
that any proposed advance of principal and interest, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate delivered
to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President
(including Assistant Vice Presidents) and by the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Seller, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., or its successor
in interest or assigns or any successor to the Purchaser under this Agreement
as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre~purchase or post~purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transaction in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Index and lien
priority); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a trust and servicing agreement, pooling and servicing agreement
and/or seller/servicer agreements and related custodial/trust agreement and
documents with respect to a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ▇▇.▇▇. 229.1100 229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release (Asset Backed
Securities, Securities Act Release No. 33 8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, and any other comparable state statute.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and
Terms Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from
time to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: Accredited Home Lenders, Inc., its successors in interest
and assigns.
Seller Information: As defined in Subsection 33.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: 50 basis points (0.50%) per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)~(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller
(which take into account the exception policies set forth therein), a copy of
which is attached hereto as Exhibit G and a then-current copy of which shall be
attached as an exhibit to the related Assignment and Conveyance.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of
a Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans funded by
the Seller pursuant to the original terms of the Seller's commitment to the
mortgagor. The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least two (2) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which are not being purchased by the Purchaser deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans, after application of
scheduled payments of principal due on or before the related Cut-off Date, to
the extent such payments were actually received. The initial principal amount of
the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the related Cut-off Date. If so provided in the related
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage pertaining to each
Mortgage Loan (except with respect to each MERS Designated Mortgage Loan), or
(b) make the related Mortgage File available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein;
provided, however, that the Purchaser may not demand repurchase, substitution or
other relief on the basis that a Mortgage Loan examined by the Purchaser or its
designee prior to purchase does not comply with the Underwriting Guidelines
provided by the Seller to the Purchaser prior to such examination and attached
as an exhibit hereto.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Seller shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement or the Interim Servicing Agreement, except when such release
is required in connection with a repurchase of any such Mortgage Loan pursuant
to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller. Notwithstanding the foregoing, each Mortgage and
related Mortgage Note shall be possessed solely by the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received by
the Seller after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all funds received on or in connection with a Mortgage
Loan shall be received and held by the Seller in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and applicable requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the ▇▇▇▇▇▇ Mae Guides, if
applicable. To the extent that original documents are not required for purposes
of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller may be in the form of microfilm or microfiche so long
as the Seller complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Guides, if
applicable.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller. The program is to ensure
that the Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7 Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
Closing Date. Pursuant to the Interim Servicing Agreement, the Seller shall
begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to a Servicing Fee with respect to each Mortgage Loan from the related
Closing Date until the termination of the Interim Servicing Agreement with
respect to such Mortgage Loan as set forth therein.
SECTION 8 Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the related Mortgage Loans. The
Transfer Date shall be the date determined in accordance with Section 6.03 of
the Interim Servicing Agreement (with respect to each Mortgage Loan, for an
interim period, as specified therein).
On or prior to the applicable Transfer Date, or as otherwise
specified below, the Seller shall, at its sole cost and expense, take such steps
as may be necessary or appropriate to effectuate and evidence the transfer of
the servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the Transfer
Date;
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with copies of all such notices
within five (5) Business Days following the Transfer Date;
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein);
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller;
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date;
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor;
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail within one (1) Business
Day following the date of receipt. The Seller shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Seller forwards with its payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Seller shall assume
full responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Seller shall comply with the foregoing requirements with respect to all
Monthly Payments received by the it after the Transfer Date;
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
the Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(v) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments;
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements as set forth in this
Agreement;
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate;
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph; and
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the Servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
SECTION 9 Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Interim Servicing Agreement; the Seller has the full corporate power, authority
and legal right to hold, transfer and convey the Mortgage Loans and to execute
and deliver this Agreement and to perform its obligations hereunder and
thereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law, but
subject to bankruptcy laws and general principles of equity; and all requisite
corporate or other action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter, by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject, or
result in the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to the terms of
any mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
(d) Ability to Service. Seller has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Seller acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Seller, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the Interim
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. Except as previously identified by the
Seller to the Purchaser in writing, there is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been or will be obtained prior to the date
required by federal, state or local law;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not intentionally
made in a manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, and upon the sale
of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan; and
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in
Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. (i) Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to the Illinois Interest Act and Prepayment Penalties, have
been complied with, (ii) the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and (iii)
the Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. Clause (i) of this representation and
warranty is a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the related Mortgage
Loan Schedule, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgaged Property may be a leasehold estate,
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home;
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part XII, Section 102 of the
▇▇▇▇▇▇ Mae Selling Guide and shall conform with the Underwriting Guidelines. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, (v) as of
the origination date of the related Manufactured Home Mortgage Loan, the related
manufactured dwelling will be the principal residence of the related Mortgagor,
and (vi) such Manufactured Home Mortgage Loan is (x) a qualified mortgage under
Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended, and (y)
secured by manufactured housing treated as a single family residence under
Section 25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. Clause (v) of this representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(i) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments
not yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser. As used in this
Subsection 9.02, "enforceable" shall be deemed to be subject to bankruptcy laws
and general principles of equity;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, or similar occurrence with respect to the
origination of a Mortgage Loan has taken place on the part of any Person,
including, without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;
(l) Full Disbursement of Proceeds. Except to the extent the Mortgage
Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed ▇▇▇▇▇▇ ▇▇▇ form 442 has
been delivered to the Purchaser within sixty (60) days after the related Closing
Date, the Mortgage Loan has been closed and the proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. Upon
payment of the Purchase Price, the Mortgage Loan is not assigned or pledged, and
the Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan had an LTV at origination greater than
100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is
issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (i), (ii) and (iii) of paragraph (j) of
this Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The Seller, its successor
and assigns, are the sole insureds of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the purchase of
the Mortgage Loan as contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. Except as insured against by the related
title insurance, there are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
are required to commence no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on the related Mortgage
Loan Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage
Note is payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
Mae and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is capable of being lawfully occupied under
applicable law. All inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit standing,
other than the subprime nature of such credit standing, that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan, to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or similar statutory provisions
in effect in any applicable jurisdiction;
(dd) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and such provision is
enforceable;
(ee) [Reserved];
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and, if requested by the Mortgagor,
has been established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue. To the best of Seller's
knowledge, based upon customary and prudent residential mortgage industry
underwriting standards, there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property, and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain such
statement(s) in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the collateral assignment of the lease without the lessor's
consent (or such consent has been obtained) and the acquisition by the holder of
the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu
of foreclosure or provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the termination
thereof upon the lessee's default without the holder of the Mortgage being
entitled to receive written notice of, and opportunity to cure, such default,
(b) allow the termination of the lease in the event of damage or destruction as
long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or (d) permit
any increase in rent other than pre-established increases set forth in the
lease; (4) the original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(ww) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note, except as set forth
on the related Mortgage Loan Schedule, and (ii) no such Prepayment Penalty may
be imposed for a term in excess of five (5) years from the date of origination.
Clause (ii) of this representation and warranty is a Deemed Material and Adverse
Representation;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(yy) [Reserved];
(zz) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws, regulations and
executive orders including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"). Additionally, no Mortgage Loan
is subject to nullification pursuant to Executive Order 13224 (the "Executive
Order") or the regulations promulgated by the Office of Foreign Assets Control
of the United States Department of Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations; and no Mortgagor is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a "blocked person" for purposes of the OFAC Regulations;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service or another issuer reasonably acceptable to the Purchaser, and such
contract is transferable;
(ccc) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(ddd) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System;
(eee) [Reserved];
(fff) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis. This representation and warranty is a
Deemed Material and Adverse Representation;
(ggg) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Seller which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost credit
product then offered by the Seller or any Affiliate of the Seller. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Seller, the
Seller referred the related Mortgagor's application to such Affiliate for
underwriting consideration. This representation and warranty is a Deemed
Material and Adverse Representation;
(hhh) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely solely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such extension of credit. The methodology
employed objective criteria such as the Mortgagor's income, assets and
liabilities, to the proposed mortgage payment and, based on such methodology,
the Mortgage Loan's originator made a reasonable determination that at the time
of origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the time of
origination (application/approval) the related Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan, relying on the Mortgagor's
representation of the Mortgagor's income in the case of loan payments which did
not require verification of the Mortgagor's income. This representation and
warranty is a Deemed Material and Adverse Representation;
(iii) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a Prepayment
Penalty upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor (e.g., a rate or fee reduction) in exchange for
accepting such Prepayment Penalty, (ii) prior to the Mortgage Loan's funding,
the Mortgagor had the option of obtaining the Mortgage Loan without a
requirement for payment of such a premium, (iii) the Prepayment Penalty was
adequately disclosed to the Mortgagor pursuant to applicable state, local and
federal law, and (iv) such Prepayment Penalty shall not be imposed in any
instance where the Mortgage Loan is accelerated or paid off in connection with
the workout of a delinquent Mortgage Loan or due to the Mortgagor's default
notwithstanding that the terms of the Mortgage Loan or state or federal law
might permit the imposition of such penalty. This representation and warranty is
a Deemed Material and Adverse Representation;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(kkk) [Reserved];
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(mmm) No Arbitration. No Mortgage Loan originated on or after August
1, 2004, requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation; and
(nnn) Second Lien Mortgage Loans. With respect to each Second Lien
Loan: (1) the related First Lien Loan does not permit negative amortization; (2)
where required or customary in the jurisdiction in which the Mortgaged Property
is located, the original lender has filed for record a request for notice of any
action by the related senior lienholder, and the Seller has notified such second
lienholder in writing of the existence of the Second Lien Loan and requested
notification of any action to be taken against the Mortgagor by such senior
lienholder; either (a) no consent for the Second Lien Loan is required by the
holder of the related First Lien Loan or (b) such consent has been obtained and
is contained in the related Mortgage File; (3) to Seller's knowledge, the
related First Lien Loan is in full force and effect, and there is no default,
lien, breach, violation or event which would permit acceleration existing under
such First Lien Loan or Mortgage Note, and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit acceleration
under such First Lien Loan; and (4) the related first lien Mortgage contains a
provision which provides for, or applicable law requires the, giving notice of
default or breach to the mortgagee under the Mortgage Loan and allows such
mortgagee to cure any default under the related First Lien Mortgage.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File in accordance with Section 5 hereof. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (aaa) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affect the value of the Mortgage Loans and
the interest of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans affected by such breach
shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase
Price. However, if the breach shall involve a representation or warranty set
forth in Subsection 9.02 (other than the representation and warranty set forth
in clause (aaa) of such Section or any Deemed Material Breach Representation)
and the Seller discovers or receives notice of any such breach within 120 days
of the related Closing Date, the Seller shall, at the Purchaser's option and
provided that the Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the related Closing Date. If the Seller has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan at the Repurchase Price. With regards to any repurchase under this
Subsection 9.03: (i) the repurchase request must be made by the Purchaser in a
prompt and timely manner and must contain reasonably sufficient information to
enable the Seller to evaluate the request, including in the case of a first
payment default, the payment history and collection comments, and (ii) with
respect to any Mortgage Loan which was never included in a Securitization
Transaction, the Purchaser shall use best efforts to notify the Seller of any
known breach of a representation and warranty and require the Seller to
repurchase such Mortgage Loan prior to foreclosure procedures commencing on such
Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Interim Servicing Agreement has been entered into and is in effect,
deposit in the Custodial Account of the amount of the Repurchase Price, for
distribution to the Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution or
(b) if the Interim Servicing Agreement has not been entered into or is no longer
in effect, by direct remittance of the Repurchase Price, to the Purchaser or its
designee in accordance with the Purchaser's instructions. In the event of a
repurchase or substitution, the Seller shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. The Purchaser shall advise its servicer/subservicer that such
repurchase had taken place promptly after the Repurchase Price has been
received. At the same time the Seller shall provide servicing transfer
instructions to each of the Purchaser and the Purchaser's servicer/subservicer
so it may adequately comply with the provisions set forth below.
Promptly upon the Purchaser's receipt of the Repurchase Price, the
Purchaser shall or shall cause its designee to release the Purchaser's interest
in the repurchased Mortgage Loan or Loans and shall promptly effect, or cause to
be effected, (i) the reconveyance of such repurchased Mortgage Loan or Loans to
the Seller free and clear of any lien, charge or encumbrance suffered or
incurred by the Purchaser and (ii) the delivery to the Seller of any documents
held by the Custodian relating to the Deleted Mortgage Loan (and in any event
within thirty days after the Seller repurchases the Mortgage Loan or Loans). In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing for
such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if any,
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by the
Seller. For the month of substitution, distributions to the Purchaser shall
include the Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller or any other party in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 and in Subsection 14.01 constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Mortgage Loans with First Payment Defaults;
Repurchase.
In the event that the first Monthly Payment with respect to any
Mortgage Loan due either (i) after origination of such Mortgage Loan, or (ii)
after the related Closing Date is not paid by the related Mortgagor to the
Purchaser within thirty (30) days of such Due Date, the Seller, at the
Purchaser's option, shall repurchase such Mortgage Loan from the Purchaser at
the Repurchase Price; provided, however, the Seller shall have until the date
which is sixty (60) days following such Due Date (the "Breach Date") to cause
the related Mortgagor to cure any such nonpayment. In addition, and
notwithstanding the foregoing, the Purchaser's right to request a repurchase
hereunder shall not commence until the Breach Date. The Purchaser shall have
sixty (60) days following the Breach Date (the "Notice Period") to notify the
Seller and request a repurchase and the Seller shall repurchase such delinquent
Mortgage Loan within thirty (30) days of receipt of such notice; provided that
the repurchase request includes the related payment history and collection
comments. Also, the Purchaser reserves the right to request a repurchase
following the expiration of the Notice Period in the event of a NSF return in
connection with such first Monthly Payment that is not cured, provided the
Purchaser notifies the Seller of such a repurchase request within thirty (30)
days of notice of such NSF return but in no event more than one hundred eighty
(180) days following the related Due Date.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan prepays in full during the first three months
following the related Closing Date, the Seller shall pay the Purchaser, within
ten (10) Business Days of such prepayment in full, an amount equal to the
product of the applicable Purchase Price Percentage less 100%, multiplied by the
outstanding principal balance of such Mortgage Loan as of the related Cut-off
Date; provided, however, that the Purchaser must request that Seller pay such
amount within sixty (60) days of the date the Mortgage Loan is prepaid in full.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date (to be executed and delivered only for the
initial Closing Date);
3. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
4. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. with respect to the initial Closing Date, a Custodial Account
Letter Agreement or a Custodial Account Certification, as
applicable, as required under the Interim Servicing Agreement;
7. with respect to the initial Closing Date, an Escrow Account
Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Interim Servicing Agreement;
8. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
9. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
10. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
11. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto, or in the form of the Seller's
warehouse lender's standard bailee letter, subject to the
Purchaser's reasonable approval, executed by any person, as
requested by the Purchaser, if any of the Mortgage Loans have
at any time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
12. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
13. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G;
14. Assignment and Conveyance Agreement in the form of Exhibit H
hereto;
15. Exhibit B to the related Assignment and Conveyance Agreement;
and
16. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen, the legal
fees and expenses of its attorneys and the costs and expenses of the Custodian.
All other costs and expenses incurred in connection with the transfer and
delivery of the Mortgage Loans and the Servicing Rights, including costs and
expenses related to the servicing transfer from the Seller to any successor
servicer, recording fees, fees for a one-time transfer on the MERS(R) System,
fees for title policy endorsements and continuations and the Seller's attorney's
fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively, the agreements referred to herein are designated the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement and the
Interim Servicing Agreement in connection with such Reconstitution that occurs
on or prior to the date which is six (6) months following the related Closing
Date, such restatement to be in the form of Exhibit B to Exhibit I hereto. The
Seller shall use its reasonable best efforts to provide to such master servicer
or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller as are
reasonably believed necessary by the Purchaser or any such other participant and
as are customarily provided in connection with Securitization Transactions
involving mortgage loans similar to the Mortgage Loans; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit J. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller regarding the Seller, the Seller's servicing practices or performance,
the Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any Reconstitution. For purposes of the
previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate with
all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
indemnification obligation under this Subsection 14.01) and related costs,
judgments, and any other costs, fees and expenses that such parties may sustain
in any way related to the failure of the Seller to perform its duties or to
service the Mortgage Loans in strict compliance with the terms of this Agreement
or any Reconstitution Agreement entered into pursuant to Section 13 or any
breach of any of Seller's representations, warranties and covenants set forth in
this Agreement. For purposes of this paragraph "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person designated as the Successor Servicer pursuant to this Agreement
and any and all Persons who previously were "Successor Servicers" pursuant to
this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios. The Purchaser shall
use reasonable best efforts to cause any prospective purchaser to enter into a
confidentiality agreement in connection with such financial information.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Accredited Home Lenders, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets
with copies to:
Accredited Home Lenders, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secondary Markets Counsel
(ii) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations
Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser. This
Agreement may be assigned, pledged or hypothecated by the Purchaser without the
consent of the Seller. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION.
SECTION 32. Confidentiality.
The Seller hereby acknowledges the Purchaser's need to share
non-public information ("Information") with the Purchaser's employees,
Affiliates, attorneys or accountants (the "Representatives"), as well as Persons
performing due diligence investigations in connection with securities or
merger/acquisition transactions, taxing authorities or other governmental
agencies or regulatory bodies or in order to comply with any applicable federal
or state laws (collectively with the Representatives, the "Agents"). The
Purchaser hereby agrees to use best efforts to avoid causing the Seller to
violate applicable securities laws governing publicly traded companies. The
Purchaser and the Seller shall use mutual best efforts to determine which
Information will remain confidential.
SECTION 33. Compliance with Regulation AB
Subsection 33.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 33 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings. Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB.
Furthermore, the Purchaser and the Company agree that if any such changes in the
interpretations of the requirements of Regulation AB materially affect this
Section 33, then the Purchaser and the Seller will amend such affected
provisions. In connection with the above, the Purchaser agrees to give the
Seller prompt written notice of changes in the requirements of Regulation AB
that might affect its obligations under this Section 33. In connection with any
Securitization Transaction, the Seller shall cooperate fully with the Purchaser
to deliver to the Purchaser (including any of its assignees or designees) and
any Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser or
any Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Seller, any Third Party Originator and the Mortgage Loans, reasonably believed
by the Purchaser or any Depositor to be necessary in order to effect such
compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller by providing timely notice of requests for information
under these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
Subsection 33.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 33.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against the Seller or any Third Party Originator; and (ii) there are no
affiliations, relationships or transactions relating to the Seller or any Third
Party Originator with respect to any Securitization Transaction and any party
thereto identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 33.03, the Seller shall, within five (5) Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 33.03 Information To Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five (5) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Subsection, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Subsection. Notwithstanding the foregoing, it
is understood and agreed that (1) the information required pursuant to Items
1103(a)(1), 1110(a) and 1119 of Regulation AB (including the information
required pursuant to subparts (a)(A), (a)(D) and (c)(i)(B) of this Subsection
33.03) shall only be required to the extent that mortgage loans originated by
the Seller or a Third Party Originator, as the case may be, in the related
Securitization Transaction comprise 10% or more (or such other percentage as may
be required from time to time under Regulation AB) of the aggregate pool of
mortgage loans in such Securitization Transaction, (2) the information required
pursuant to Items 1110(b) and 1117 of Regulation AB (including the information
required pursuant to subparts (a)(B), (a)(C) and (c)(i)(A) of this Subsection
33.03) shall only be required to the extent that mortgage loans originated by
the Seller or a Third Party Originator, as the case may be, in the related
Securitization Transaction comprise 20% or more (or such other percentage as may
be required from time to time under Regulation AB) of the aggregate pool of
mortgage loans in such Securitization Transaction and (3) the information
required pursuant to Item 1105 of Regulation AB (including the information
required pursuant to subpart (b) below) shall only be required in Securitization
Transactions in which such Static Pool Information is material, as determined by
the Purchaser or Depositor in its sole reasonable determination of the
requirements of Regulation AB. Notwithstanding the foregoing, neither the
Purchaser nor any Depositor shall exercise its right to request delivery of such
information or other performance under these provisions other than in good faith
or for purposes other than compliance with the Securities Act, the Exchange Act
and the rules and regulations of the Commission thereunder.
(a) Subject to the provisions of the preceding paragraph, if so
requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent), or
(ii) each Third Party Originator, as is requested for the purpose of compliance
with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum.
(i) the originator's form of organization;
(ii) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator's experience in
originating mortgage loans of a similar type as the Mortgage Loans; information
regarding the size and composition of the originator's origination portfolio;
and information that may be material, in the good faith judgment of the
Purchaser or any Depositor, to an analysis of the performance of the Mortgage
Loans, including the originator's credit granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
(iii) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Seller and each
Third Party Originator; and
(iv) a description of any affiliation or relationship between the
Seller, each Third Party Originator and any of the following parties to a
Securitization Transaction, as such parties are identified to the Seller by the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) Subject to the provisions of the initial paragraph, if so
requested by the Purchaser or any Depositor, the Seller shall provide (or, as
applicable, cause each Third Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third Party Originator. Such Static Pool Information shall be
prepared by the Seller (or Third Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1) (3)
of Regulation AB. To the extent that there is reasonably available to the Seller
(or Third Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Seller, and need not be customized for the Purchaser
or any Depositor. Such Static Pool Information for each vintage origination year
or prior securitized pool, as applicable, shall be presented in increments no
less frequently than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is to
be included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) [Reserved].
(d) Subject to the provisions of the initial paragraph, if so
requested by the Purchaser or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of asset
backed securities, the Seller shall (or shall cause each Third Party Originator
to) (i) notify the Purchaser and any Depositor in writing of (A) any material
litigation or governmental proceedings pending against the Seller or any Third
Party Originator and (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between the Seller or
any Third Party Originator and any of the parties specified in clause (vi) of
paragraph (a) of this Subsection (and any other parties identified in writing by
the requesting party) with respect to such Securitization Transaction, and (ii)
provide to the Purchaser and any Depositor a description of such proceedings,
affiliations or relationships.
(e) With respect to those Mortgage Loans that were sold to the
Purchaser pursuant to this Agreement, the Purchaser shall, to the extent
consistent with then-current industry practice, cause the servicer (or another
party) to be obligated to provide information, in the form customarily provided
by such servicer or other party (which need not be customized for the Seller)
with respect to the Mortgage Loans reasonably necessary for the Seller to comply
with its obligations under Regulation AB, including, without limitation,
providing to the Seller Static Pool Information, as set forth in Item 1105(a)(2)
and (3) of Regulation AB (such information provided by the servicer or such
other party, the "Loan Performance Information").
Subsection 33.04 Indemnification.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a 14(d) or Rule 15d 14(d) under the Exchange
Act with respect to such Securitization Transaction; each broker dealer acting
as underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants' letter
or other material provided in written or electronic form under this Section 33
by or on behalf of the Seller, or provided under this Section 33 by or on behalf
of any Third Party Originator (collectively, the "Seller Information"), or (B)
the omission or alleged omission to state in the Seller Information a material
fact required to be stated in the Seller Information or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, by way of clarification, that clause (B) of
this paragraph shall be construed solely by reference to the Seller Information
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Seller Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any failure by the Seller or any Third Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 33; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 33.02(a) or in a writing furnished pursuant to Subsection
33.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by such
closing date, or any breach by the Seller of a representation or warranty in a
writing furnished pursuant to Subsection 33.02(b) to the extent made as of a
date subsequent to such closing date.
(b) In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a 14(d) or Rule 15d 14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller or
any Third Party Originator.
(c) The Purchaser shall indemnify the Seller, each affiliate of the
Seller and the respective present and former directors, officers, employees and
agents of each of the foregoing, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in the Loan Performance Information or (B) the
omission or alleged omission to state in the Loan Performance
Information a material fact required to be stated in the Loan
Performance Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, by way of clarification, that clause
(B) of this paragraph shall be construed solely by reference to the
Loan Performance Information and not to any other information
communicated in connection with a sale or purchase of securities,
without regard to whether the Loan Performance Information or any
portion thereof is presented together with or separately from such
other information; or
(ii) any failure by the Purchaser or by the related servicer
to deliver any Loan Performance Information as required under
Subsection 34.03(e).
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:
Title:
ACCREDITED HOME LENDERS, INC.
(Seller)
By:____________________________________
Name:
Title:
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Eighth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]." If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to [name
of predecessor]." If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder, preliminary report or commitment for title issued by the
title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d) or (f), if the Seller cannot deliver or cause to be
delivered the original of any such item with evidence of recording thereon on or
prior to the related Closing Date because of a delay caused by the public
recording office where such item has been delivered for recordation or because
such item has been lost or because such public recording office retains the
original recorded item (each such item, a "Delayed Document"), the Seller shall
deliver or cause to be delivered to the Custodian, (i) in the case of a delay
caused by the public recording office, a photocopy of such Delayed Document,
together with an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) to the effect that such copy is a
true and correct copy of the Delayed Document that has been dispatched to the
appropriate public recording office for recordation (and the original recorded
Delayed Document or a copy of such Delayed Document certified by such public
recording office to be a true and complete copy of the original recorded Delayed
Document will be promptly delivered to the Custodian upon receipt thereof by the
Seller); or (ii) in the case of a Delayed Document where a public recording
office retains the original recorded Delayed Document or in the case where a
Delayed Document is lost after recordation in a public recording office, a copy
of such Delayed Document certified by such public recording office to be a true
and complete copy of the original recorded Delayed Document.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a corporation organized under the
laws of the state of ____________] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver agreements such as the
Eighth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of _______ __, 200_, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. (the "Purchaser") and the Company (the "Purchase
Agreement"), the Interim Servicing Agreement, dated as of _______ __,
200_, by and between the Company and the Purchaser (the "Servicing
Agreement"), and the Custodial Agreement dated as of _____ __, 200_ by and
among the Company, the Purchaser and Deutsche Bank Trust Company Americas
(the "Custodial Agreement") and to endorse the Mortgage Notes and execute
the Assignments of Mortgages by original [or facsimile] signature, and
such resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Except as previously identified by the Company to the Purchaser
in writing, to the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, the Servicing Agreement and the Custodial
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement, the Servicing Agreement and the
Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Executive/Assistant Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Executive/Assistant Vice] President of the Company and
that the signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Eighth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement"),
which sale is in the form of whole loans, delivered pursuant to a Custodial
Agreement dated as of _____ __, 200_ among the Purchaser, the Company and
Deutsche Bank Trust Company Americas (the "Custodial Agreement"), and serviced
pursuant to an Interim Servicing Agreement, dated as of ______ __, 200_ by and
between the Seller and the Purchaser (the "Servicing Agreement" and,
collectively with the Purchase Agreement and the Custodial Agreement, the
"Agreements"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as [we] [I] have
deemed necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement and in the Servicing Agreement, as applicable. [We] [I]
have assumed the authenticity of all documents submitted to [us] [me] as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is [type of entity] duly organized, validly
existing and in good standing under the laws of the [state of
incorporation] and is qualified to transact business in, and
is in good standing under, the laws of [the state of
incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements to which it is a party and all
requisite power, authority and legal right to execute and
deliver such Agreements and to perform and observe the terms
and conditions of such Agreements.
3. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Company, and is a
legal, valid and binding agreement enforceable in
accordance with its respective terms against the Company,
subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and
subject to the application of the rules of equity,
including those respecting the availability of specific
performance, none of which will materially interfere with
the realization of the benefits provided thereunder or with
the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow certain of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements to which it is a party
5. The Company has been duly authorized to allow certain of
its officers to execute by original [or facsimile]
signature the endorsements to the Mortgage Notes and the
Assignments of Mortgages, and the original [or facsimile]
signature of the officer at the Company executing the
endorsements to the Mortgage Notes and the Assignments of
Mortgages represents the legal and valid signature of said
officer of the Company.
6. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for
the execution, delivery and performance by the Company of
or compliance by the Company with the Agreements to which
it is a party and the sale of the Mortgage Loans by the
Company or the consummation of the transactions
contemplated by the Agreements to which each is a party or
(ii) any required consent, approval, authorization or order
has been obtained by the Company.
7. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements to
which it is a party conflicts or will conflict with or
results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which
it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is
bound.
8. Except as previously identified by the Company to the
Purchaser in writing, there is no action, suit, proceeding
or investigation pending or, to the best of [our] [my]
knowledge, threatened against the Company which, in [our]
[my] judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or
assets of the Company or in any material impairment of the
right or ability of the Company to carry on its business
substantially as now conducted or in any material liability
on the part of the Company or which would draw into
question the validity of the Agreements to which it is a
party or the Mortgage Loans or of any action taken or to be
taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements to which it is a party.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit
the Purchaser to avail itself of all protection available
under applicable law against the claims of any present or
future creditors of the Company, and are sufficient to
prevent any other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by
the Company from being enforceable.
I am admitted to the bar of the State of California, and I express
no opinion as to the laws of any other jurisdiction except as to matters that
are governed by federal law. I make no undertaking to supplement or update this
opinion if, after the date hereof, facts or circumstances come to my attention
or changes in the law occur which could affect such opinion. This opinion is
given to you for your sole benefit, and no other person or entity is entitled to
rely hereon except that the purchaser or purchasers to which you initially and
directly resell the Mortgage Loans may rely on this opinion as if it were
addressed to them as of its date.
Very truly yours,
________________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that
________________________[COMPANY] a [type of entity], organized pursuant to the
laws of [the state of incorporation] (the "Company") has committed to sell to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under the Eighth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __, 200_,
certain mortgage loans originated by the Association. The Company warrants that
the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc.
Very truly yours,
____________________________
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________________
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available
funds, the financial institution named below hereby relinquishes any and all
right, title and interest it may have in all Mortgage Loans to be purchased by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. from the Company named below pursuant to
that certain Eighth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company named below or its
designees, as of the date and time of the sale of such Mortgage Loans to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc.
Name and Address of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_______________________________
By:____________________________
Title:_________________________
Date:__________________________
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ ("Seller"),
as (i) the Seller under that certain Purchase Price and Terms Agreement, dated
as of ___________, _____ (the "PPTA"), (ii) the Seller under that certain Eighth
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of ________, ____ (the "Purchase Agreement"), and (iii) the Seller/Interim
Servicer under that certain Interim Servicing Agreement, dated as of
___________, ____ (the "Interim Servicing Agreement" and, together with the PPTA
and the Purchase Agreement, the "Agreements"), does hereby sell, transfer,
assign, set over and convey to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements, without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in and
to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and all
rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Section 6 of the Purchase Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Custodial Agreement. The contents of each Servicing File required to be
retained by __________________________ ("Interim Servicer") to service the
Mortgage Loans pursuant to the Interim Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Seller in its
capacity as Interim Servicer for the benefit of the Purchaser as the owner
thereof. The Interim Servicer's possession of any portion of the Servicing File
is at the will of the Purchaser for the sole purpose of facilitating servicing
of the related Mortgage Loan pursuant to the Interim Servicing Agreement, and
such retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, the Servicing
Rights and the contents of the Mortgage File and Servicing File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Seller at the will of the Purchaser
in such custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:
Name:_______________________________
Title:______________________________
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC.
By:__________________________________
Name:_____________________________
Title:____________________________
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less
than $_________; (2) an origination date earlier than _ months prior to the
related Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of
less than ___; or (5) a debt-to-income ratio of more than __%. Each First
Lien Loan has a Mortgage Interest Rate of at least ___% per annum and an
outstanding principal balance less than $_________. Each Second Lien Loan has
a Mortgage Interest Rate of at least ______% per annum and an outstanding
principal balance less than $________. Each Adjustable Rate Mortgage Loan has
an Index of [_______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Eighth Amended
and Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of [DATE], between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser or the Custodian under the Purchase Agreement
insofar as they relate to the Mortgage Loans shall be deemed to refer to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf).
Neither the Company nor the Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Purchase
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans or the Company's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the ordinary course of the
Company's business and will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of the Company's charter or
bylaws or any legal restriction, or any material agreement or instrument to
which the Company is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Company or its property is subject. The execution, delivery and
performance by the Company of this Agreement have been duly authorized by
all necessary corporate action on part of the Company. This Agreement has
been duly executed and delivered by the Company, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity regardless
of whether enforceability is considered in a proceeding in equity or at
law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement, or if required, such
approval has been obtained prior to the date hereof; and
(d) Except as previously identified by the Company to the Assignor in
writing, there is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency or
other tribunal, which would draw into question the validity of this
Agreement or the Purchase Agreement, or which, either in any one instance
or in the aggregate, would result in any material adverse change in the
ability of the Company to perform its obligations under this Agreement or
the Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
Name:_______________________________
Its:________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
Name:_______________________________
Its:________________________________
[__________________________]
By:
Name:_______________________________
Its:________________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Mortgage Loans
(reps from Exhibit B to applicable PPTA to be inserted here)
EXHIBIT J
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT, dated
[______________] ("Agreement"), among [_________________] (the "Depositor"),
[________________] (the "Underwriter"), [_____________} (the "Initial
Purchaser") and [_________________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party or its affiliate originated or
acquired the Mortgage Loans and subsequently sold the Mortgage Loans to
[_____________], an affiliate of the Depositor, in anticipation of the
securitization transaction;
WHEREAS, pursuant to Section [__] of the Eighth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2006, by
and between the Indemnifying Party and the Initial Purchaser, the Indemnifying
Party wishes to provide for indemnification and contribution on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the 1933 Act.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: [(A)] All information in the
[Prospectus Supplement,] [the Offering Circular] or [any Free Writing
Prospectus] or any amendment or supplement thereto (i) contained under the
headings "Transaction Overview--Parties--The Original Loan Sellers-Accredited
Home Lenders, Inc." and "The Mortgage Loan Pool--Underwriting
Guidelines--Accredited Home Lenders, Inc." and (ii) regarding the Mortgage
Loans, the related mortgagors and/or the related Mortgaged Properties (but in
the case of this clause (ii), only to the extent any untrue statement or
omission arose from or is based upon errors or omissions in the information
concerning the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties, as applicable, provided to the Depositor or any affiliate
by or on behalf of the Indemnifying Party) [and (B) static pool information
regarding mortgage loans originated or acquired by the Seller [and included in
the Prospectus Supplement, the Offering Circular or the Free Writing Prospectus
or any amendment or supplement thereto][incorporated by reference from the
website located at ___________]].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates,
including any structural term sheets, collateral terms sheets and computational
materials used in connection with such offering.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of [__________], among the Depositor, the Indemnifying Party
and [_____________].
[Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to
the Pooling and Servicing Agreement.]
Prospectus Supplement: The prospectus supplement, dated
[___________], relating to the offering of the Publicly Offered Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, between the Depositor and the Underwriter, relating to the
sale of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor, the Underwriter and the Initial Purchaser and their respective
affiliates, and their respective present and former directors, officers,
employees, agents and each Person, if any, that controls the Depositor, the
Underwriter or such affiliate, within the meaning of either the 1933 Act or the
1934 Act (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, penalties, fines, forfeitures or liabilities, joint or several,
to which each such Indemnified Party may become subject, under the 1933 Act, the
1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the [Prospectus Supplement,] [the Offering
Circular,] [any Free Writing Prospectus] or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission relates to information set forth in the
Indemnifying Party Information, and the Indemnifying Party shall in each case
reimburse each Indemnified Party for any legal or other costs, fees, or expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such loss, claim, damage, penalty, fine, forfeiture, liability
or action. The Indemnifying Party's liability under this Section 3.1 shall be in
addition to any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1,
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative benefit to the
Depositor and the Indemnifying Party from the issuance and sale of the Publicly
Offered Certificates or, if such allocation is not permitted by a court of
competent jurisdiction, then on a basis appropriate to also recognize the
relative fault of the Depositor or the Underwriter, on the one hand, and the
Indemnifying Party, on the other hand, in connection with the applicable
misstatements or omissions as well as any other relevant equitable
considerations. Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. For purposes of this Section 3.1, each director of a party to
this Agreement and each Person, if any, that controls a party to this Agreement
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or Parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, the Indemnified Party or Parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
Parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates [and Privately Offered Certificates].
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[______________]
[______________]
[______________]
Attention:
Telephone:
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
[______________]
[______________]
[______________]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
Name:
Title:
[UNDERWRITER]
By:
Name:
Title:
[INDEMNIFYING PARTY]
By:
Name:
Title:
FIRST AMENDMENT AND JOINDER TO THE PURCHASE AGREEMENT
Amendment and Joinder to the Eighth Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of December 21, 2006
("Amendment and Joinder"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New
York corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"), Accredited Home Lenders, Inc., a California
corporation, having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Accredited"), and Aames Capital Corporation, a California
corporation, having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Aames", and together with Accredited, "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Purchaser and Accredited are parties to the Eighth
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of August 1, 2006 (the "Existing Purchase Agreement," and as amended by this
Amendment and Joinder, as may be amended from time to time, the "Purchase
Agreement"); and
WHEREAS, at the present time, the Purchaser and Accredited desire to
amend the Existing Purchase Agreement to permit Aames to become an additional
Seller thereunder, as well as to modify certain other provisions therein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser,
Accredited and Aames agree as follows:
SECTION 1. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Purchase Agreement.
(a) Section 1 of the Purchase Agreement is hereby amended by
deleting the definition of Underwriting Guidelines and replacing it with the
following language:
Underwriting Guidelines: The underwriting guidelines of Accredited
or Aames, (which take into account the exception policies set forth therein), as
applicable, in effect at the time of origination.
(b) Section 1 of the Purchase Agreement is hereby amended by
deleting the definition of Qualified Insurer.
(c) Subsection 17 is hereby amended by deleting clause (i) and
replacing it with the following language:
"Accredited Home Lenders, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Capital Markets
with copies to:
"Accredited Home Lenders, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secondary Markets Counsel"
SECTION 2. Agreement and Joinder. Aames hereby agrees to all of the
provisions of the Purchase Agreement, and effective on the date hereof, becomes
a party to the Purchase Agreement, as a seller, with the same effect as if Aames
were an original signatory to the Purchase Agreement. All references to Seller
in the Purchase Agreement shall be deemed to include Aames. Notwithstanding the
foregoing, and with respect to Mortgage Loans sold by Aames only, certain
provisions contained in the Existing Purchase Agreement shall be modified as set
forth on Exhibit A hereto. In addition, references to Seller in the Purchase
Agreement shall mean either Accredited or Aames with respect to Mortgage Loans
sold by the related Seller thereunder. Finally, all references to the Seller in
connection with servicing of the Mortgage Loans shall mean Accredited.
SECTION 3. Obligations Joint and Several. Each of Accredited and
Aames hereby acknowledge and agree that it shall be jointly and severally liable
to the Purchaser for all remedies and recourse under the Purchase Agreement,
including all indemnities thereunder. Notwithstanding the foregoing, the
Purchaser shall have the right, in its sole discretion, to pursue all remedies
and recourse against either Accredited or Aames individually or jointly at any
time.
SECTION 4. Limited Effect. Except as expressly amended and modified
by this Amendment and Joinder, the Purchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 5. Counterparts. This Amendment and Joinder may be executed
by each of the parties hereto on any number of separate counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT AND JOINDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their
names to be duly signed hereto by their respective officers thereunto duly
authorized, all as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
AAMES CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXHIBIT A
MODIFICATIONS TO PURCHASE AGREEMENT FOR
MORTGAGE LOANS SOLD BY AAMES ONLY
(a) The second sentence of the third paragraph of Subsection 6.02 is
hereby amended by deleting the words "and applicable requirements of ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac" after the word "regulation" and replacing them with the
following language:
"in accordance with Accepted Servicing Practices"
(b) Subsection 9.02(v) is hereby amended by deleting the words
"acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇" and replacing them with the following
language:
"generally acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇, modified to
reflect subprime lending terms or are on forms generally acceptable to prudent
originators of mortgage loans similar to the Mortgage Loans"
(c) Subsections 9.02(f), (i), (p), (gg) and (nn) are hereby amended
by deleting references to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac requirements within such
representations and warranties and replacing such references with requirements
or policies acceptable to prudent originators of mortgage loans similar to the
Mortgage Loans.
(d) Subsection 9.02(oo) is hereby amended by deleting such
representation and warranty in its entirety and replacing it with the following
language:
"Disclosure Materials. The Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans;"
(e) The Purchase Agreement is hereby modified to reflect that all
references to MERS and MERS Designated Loans shall only apply to Mortgage Loans
sold by Accredited thereunder and that Aames is not a member of MERS.
EXHIBIT P
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
[▇▇▇▇▇ Fargo Bank, National Association
1 Home ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇]
[Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
[Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, and having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Trust Administration - MS07H7, as
Trustee (the "Trustee") pursuant to that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE7 Pooling and Servicing Agreement, dated as of September 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the "Depositor"), Saxon
Mortgage Services Inc., as a servicer ("Saxon"), ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer, Securities Administrator, a Servicer and a
Custodian ("▇▇▇▇▇ Fargo"), Countrywide Home Loans Servicing LP, as a servicer
("Countrywide Servicing"), LaSalle Bank National Association, as a custodian
("LaSalle") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"), hereby constitutes and appoints [Saxon] [▇▇▇▇▇ Fargo] [Countrywide
Servicing], by and through [Saxon's] [▇▇▇▇▇ Fargo's] [Countrywide Servicing's]
officers, the Trustee's true and lawful Attorney-in-fact, in the Trustee's name,
place and stead and for the Trustee's benefit, in connection with all mortgage
loans serviced by [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] pursuant to the
Agreement solely for the purpose of performing such acts and executing such
documents in the name of the Trustee necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the mortgages or deeds of
trust (the "Mortgages" and the "Deeds of Trust" respectively) and promissory
notes secured thereby (the "Mortgage Notes") for which the undersigned is acting
as Trustee for various certificateholders (whether the undersigned is named
therein as mortgagee or beneficiary or has become mortgagee by virtue of
endorsement of the Mortgage Note secured by any such Mortgage or Deed of Trust)
and for which [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] is acting as
servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
(1) The modification or re recording of a Mortgage or Deed of Trust, where
said modification or re recording is solely for the purpose of correcting
the Mortgage or Deed of Trust to conform same to the original intent of
the parties thereto or to correct title errors discovered after such title
insurance was issued; provided that (i) said modification or re recording,
in either instance, does not adversely affect the lien of the Mortgage or
Deed of Trust as insured and (ii) otherwise conforms to the provisions of
the Agreement.
(2) The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution or requests to trustees to accomplish same.
(3) The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
(4) The completion of loan assumption agreements.
(5) The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
(6) The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
(7) The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related
Mortgage Note.
(8) With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a deed-in-lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any
such foreclosure, including, without limitation, any and all of the
following acts:
(a) the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
(b) the preparation and issuance of statements of breach or non
performance;
(c) the preparation and filing of notices of default and/or notices of
sale;
(d) the cancellation/rescission of notices of default and/or notices of
sale;
(e) the taking of deed-in-lieu of foreclosure; and
(f) the preparation and execution of such other documents and
performance of such other actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to expeditiously
complete said transactions in paragraphs 8(a) through 8(e) above.
(9) With respect to the sale of property acquired through a foreclosure or
deed-in-lieu of foreclosure, including, without limitation, the execution
of the following documentation:
(a) listing agreements;
(b) purchase and sale agreements;
(c) grant/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to purchase
same;
(d) escrow instructions; and
(e) any and all documents necessary to effect the transfer of property.
(10) The modification or amendment of escrow agreements established for repairs
to the mortgaged property or reserves for replacement of personal
property.
The undersigned gives said Attorney in fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney in fact shall
be effective as of September 1, 2007.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] to the
Trustee under the Agreement, or (ii) be construed to grant [Saxon] [▇▇▇▇▇ Fargo]
the power to initiate or defend any suit, litigation or proceeding in the name
of the Trustee except as specifically provided for herein. If [Saxon] [▇▇▇▇▇
Fargo] [Countrywide Servicing] receives any notice of suit, litigation or
proceeding in the name of the Trustee, then [Saxon] [▇▇▇▇▇ Fargo] [Countrywide
Servicing] shall promptly forward a copy of same to the Trustee.
This limited power of attorney is not intended to extend the powers
granted to [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] under the Agreement or
to allow [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] to take any action with
respect to Mortgages, Deeds of Trust or Mortgage Notes not authorized by the
Agreement.
[Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] hereby agrees to
indemnify and hold the Trustee and its directors, officers, employees and agents
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever incurred by reason or result of or in connection with
the exercise by [Saxon] [▇▇▇▇▇ Fargo] [Countrywide Servicing] of the powers
granted to it hereunder. The foregoing indemnity shall survive the termination
of this Limited Power of Attorney and the Agreement or the earlier resignation
or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as
Trustee has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by a duly elected and
authorized signatory this ___________ day of ____________.
Deutsche Bank National Trust Company,
as Trustee
By:
--------------------------------------
Name:
Title:
Acknowledged and Agreed
[Saxon Mortgage Services, Inc.]
[▇▇▇▇▇ Fargo Bank, National Association]
[Countrywide Home Loans Servicing LP]
By:
--------------------------------
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared ____________________________
of Deutsche Bank National Trust Company, as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.
WITNESS my hand and official seal.
(SEAL)
-------------------------------------------
Notary Public, State of California
EXHIBIT Q
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Securities
Administrator], [Master Servicer], [the Servicer], [each Subservicer] and [each
Subcontractor] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
------------------------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
------------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or other Securities
1122(d)(1)(i) triggers and events of default in accordance with the transaction agreements. Administrator/Servicer
------------------------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third parties, policies Securities
and procedures are instituted to monitor the third party's performance and Administrator/Servicer
1122(d)(1)(ii) compliance with such servicing activities.
------------------------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a back-up servicer N/A
1122(d)(1)(iii) for the mortgage loans are maintained.
------------------------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the party Servicer/Master Servicer
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate custodial bank Servicer/Master Servicer
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
1122(d)(2)(i) agreements.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to an investor Servicer/Securities
1122(d)(2)(ii) are made only by authorized personnel. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows or Servicer/Master Servicer
distributions, and any interest or other fees charged for such advances, are
1122(d)(2)(iii) made, reviewed and approved as specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve accounts or Servicer/Securities
accounts established as a form of overcollateralization, are separately Administrator/Master Servicer
maintained (e.g., with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured depository Servicer/Securities
institution as set forth in the transaction agreements. For purposes of this Administrator/Master Servicer
criterion, "federally insured depository institution" with respect to a foreign
financial institution means a foreign financial institution that meets the
1122(d)(2)(v) requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
------------------------------------------------------------------------------------------------------------------------------------
Servicer/Securities
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all asset-backed Servicer/Securities
securities related bank accounts, including custodial accounts and related bank Administrator/Master Servicer
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
1122(d)(2)(vii) other number of days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
------------------------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the Commission, are Servicer/Securities
maintained in accordance with the transaction agreements and applicable Administrator/Master Servicer
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
1122(d)(3)(i) mortgage loans serviced by the Servicer.
------------------------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in accordance with Servicer/Securities
timeframes, distribution priority and other terms set forth in the transaction Administrator/Master Servicer
1122(d)(3)(ii) agreements.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business days to the Servicer/Securities
Servicer's investor records, or such other number of days specified in the Administrator/Master Servicer
1122(d)(3)(iii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with cancelled Servicer/Securities
1122(d)(3)(iv) checks, or other form of payment, or custodial bank statements. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
------------------------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required by the Trustee/Custodian/
1122(d)(4)(i) transaction agreements or related mortgage loan documents. Servicer/
------------------------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required by the Trustee/Custodian/
1122(d)(4)(ii) transaction agreements Servicer/
------------------------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are made, reviewed Securities
and approved in accordance with any conditions or requirements in the Administrator/Servicer
1122(d)(4)(iii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in accordance with the Servicer
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
1122(d)(4)(iv) loan documents.
------------------------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree with the Servicer's Servicer
1122(d)(4)(v) records with respect to an obligor's unpaid principal balance.
------------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(vi) pool asset documents. Servicer
------------------------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and Servicer
deeds in lieu of foreclosure, foreclosures and repossessions, as applicable)
are initiated, conducted and concluded in accordance with the timeframes or
1122(d)(4)(vii) other requirements established by the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the period a Servicer
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
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
------------------------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage loans with Servicer
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) Servicer
such funds are analyzed, in accordance with the obligor's mortgage loan
documents, on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number of days specified
1122(d)(4)(x) in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance payments) are Servicer
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,
1122(d)(4)(xi) or such other number of days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be made on behalf Servicer
of an obligor are paid from the servicer's funds and not charged to the
1122(d)(4)(xii) obligor, unless the late payment was due to the obligor's error or omission.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two business days Servicer
to the obligor's records maintained by the servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are recognized and Servicer/Securities
1122(d)(4)(xiv) recorded in accordance with the transaction agreements. Administrator
------------------------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the Securities Administrator
1122(d)(4)(xv) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
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 Monthly Servicers/
Statement Master Servicer/
Securities Administrator
--------------------------------------------------------------------------------
Any information required by Item 1121 Depositor
of Regulation AB which is NOT included
on the Monthly Statement
--------------------------------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any
proceedings known to be contemplated by
governmental authorities:
--------------------------------------------------------------------------------
o Issuing Entity Master Servicer/Securities
Administrator/Servicers
--------------------------------------------------------------------------------
o Sponsor Sponsor (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 Any Item 1110(b) of Regulation AB Depositor
Originator
--------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation Servicers
Servicer (other than the Master
Servicer or Securities Administrator)
--------------------------------------------------------------------------------
o Any other party contemplated by Depositor
Item 1100(d)(1) of Regulation AB
--------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Depositor
Proceeds
Information from Item 2(a) of Part II
of Form 10-Q:
With respect to any sale of securities
by the sponsor, depositor or issuing
entity, that are backed by the same
asset pool or are otherwise issued by
the issuing entity, whether or not
registered, provide the sales and use of
proceeds information in Item 701 of
Regulation S-K. Pricing information can
be omitted if securities were not
registered.
--------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
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 Depositor/Securities Administrator
Vote of Security Holders
Information from Item 4 of Part II of
Form 10-Q
--------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool N/A
Assets
Item 1112(b) of Regulation AB -
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) of Regulation AB -
Credit Enhancement Provider Financial
Information*
--------------------------------------------------------------------------------
o Determining applicable disclosure Depositor
threshold
--------------------------------------------------------------------------------
o Requesting required financial
Depositor information (including any
required accountants' consent to the use
thereof) or effecting incorporation by
reference
--------------------------------------------------------------------------------
Item 1115(b) of Regulation AB -
Derivative Counterparty Financial
Information*
--------------------------------------------------------------------------------
o Determining current maximum probable Depositor
exposure
--------------------------------------------------------------------------------
o Determining current significance Depositor
percentage
--------------------------------------------------------------------------------
o Requesting required financial
Depositor information (including any
required accountants' consent to the use
thereof) or effecting incorporation by
reference
--------------------------------------------------------------------------------
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Items.
--------------------------------------------------------------------------------
Item 8: Other Information Any party to this Agreement
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
--------------------------------------------------------------------------------
Item 9: Exhibits
--------------------------------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
--------------------------------------------------------------------------------
Exhibits required by Item 601 of Depositor
Regulation S-K, such as material
agreements
--------------------------------------------------------------------------------
EXHIBIT S
Additional Form 10-K Disclosure
--------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
--------------------------------------------------------------------------------
Item 9B: Other Information Any party to this Agreement
responsible for disclosure items on
Form 8-K
Disclose any information required to be
reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not
reported
--------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Securities Administrator
Schedules Depositor
--------------------------------------------------------------------------------
Item 1115(b) of Regulation AB:
Derivative Counterparty Financial
Information*
--------------------------------------------------------------------------------
o Determining current maximum probable Depositor
exposure
--------------------------------------------------------------------------------
o Determining current significance Depositor
percentage
--------------------------------------------------------------------------------
o Requesting required financial Depositor
information (including any
required accountants' consent to the use
thereof) or effecting incorporation by
reference
--------------------------------------------------------------------------------
*This information need only be reported
on the Form 10-D for the distribution
period in which updated information is
required pursuant to the Items.
--------------------------------------------------------------------------------
Item 1117 of Regulation AB: Legal
Proceedings
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any
proceedings known to be contemplated by
governmental authorities:
--------------------------------------------------------------------------------
o Issuing Entity Master Servicer/Securities
Administrator/Servicers and Depositor
--------------------------------------------------------------------------------
o Sponsor Sponsor (if a party to the Pooling
and Servicing Agreement) or Depositor
--------------------------------------------------------------------------------
o Depositor Depositor
--------------------------------------------------------------------------------
o Trustee Trustee
--------------------------------------------------------------------------------
Custodian Custodian
--------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
--------------------------------------------------------------------------------
o Master Servicer Master Servicer
--------------------------------------------------------------------------------
o Any Item 1110(b) of Regulation AB Depositor
Originator
--------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation AB
Servicers Servicer (other than the
Master Servicer or Securities
Administrator)
--------------------------------------------------------------------------------
o Any other party contemplated by Item Depositor
1100(d)(1) of Regulation AB
--------------------------------------------------------------------------------
Item 1119 of Regulation AB:
Affiliations and Relationships
--------------------------------------------------------------------------------
Whether (a) the Sponsor, Depositor or Depositor as to (a)
Issuing Entity is an affiliate of the Sponsor (if a party to this
following parties, and (b) to the Agreement) as to (a)
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 Item 1108(a)(3) of Servicers
Regulation AB servicer
--------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Depositor/Sponsor (if a party to
Derivate Counterparty Provider this Agreement)
--------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor (if a party to this
Agreement)
--------------------------------------------------------------------------------
Whether there are any "outside the Depositor as to (a)
ordinary course business arrangements" Sponsor as to (a)
other than would be obtained in an arm's (if a party to this the following
length transaction between (a) the parties (or their Agreement)
Sponsor, Depositor or Issuing Entity on
the one hand, and (b) any of affiliates)
on the other hand, that exist currently
or within the past two years and that
are material to a Certificateholder's
understanding of the Certificates:
--------------------------------------------------------------------------------
o Master Servicer Master Servicer
--------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
--------------------------------------------------------------------------------
o Trustee Depositor
--------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Servicers
Regulation AB servicer
--------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Depositor/Sponsor (if a party to
Originator this Agreement)
--------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Depositor/Sponsor (if a party to
Derivate Counterparty Provider this Agreement)
--------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Depositor/Sponsor (if a party to
Regulation AB material party this Agreement)
--------------------------------------------------------------------------------
Whether there are any "outside the Depositor as to (a)
ordinary course business arrangements" Sponsor as to (a) (if a party to
other than would be obtained in an arm's this Agreement)
length transaction between (a) the
Sponsor, Depositor or Issuing Entity on
the one hand, and (b) any of the
following parties (or their affiliates)
on the other hand, that exist currently
or within the past two years and that
are material to a Certificateholder's
understanding of the Certificates:
--------------------------------------------------------------------------------
o Master Servicer Master Servicer
--------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
--------------------------------------------------------------------------------
o Trustee Depositor
--------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Servicer
Regulation AB servicer
--------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Depositor/Sponsor (if a party to
Originator this Agreement)
--------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Depositor/Sponsor (if a party to
Derivate Counterparty Provider this Agreement)
--------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Depositor/Sponsor (if a party to
Regulation AB material party this Agreement)
--------------------------------------------------------------------------------
EXHIBIT T
Form 8-K Disclosure Information
--------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
--------------------------------------------------------------------------------
Item 1.01- Entry into a Material The party to this Agreement entering
Definitive Agreement into such material definitive
agreement
Disclosure is required regarding entry
into or amendment of any definitive
agreement that is material to the
securitization, even if depositor is not
a party.
Examples: servicing agreement,
custodial agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
--------------------------------------------------------------------------------
Item 1.02- Termination of a Material The party to this Agreement
Definitive Agreement requesting termination of a material
definitive agreement
Disclosure is required regarding
termination of any definitive agreement
that is material to the securitization
(other than expiration in accordance
with its terms), even if depositor is
not a party.
Examples: servicing agreement,
custodial agreement.
--------------------------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership Depositor
Disclosure is required regarding the
bankruptcy or receivership, with respect
to any of the following:
--------------------------------------------------------------------------------
o Issuing Entity Securities Administrator/Servicer
--------------------------------------------------------------------------------
o Sponsor Depositor/Sponsor (if a party to
this Agreement)
--------------------------------------------------------------------------------
o Depositor Depositor
--------------------------------------------------------------------------------
o Master Servicer Master Servicer
--------------------------------------------------------------------------------
o Any affiliated Servicer The applicable Servicer
--------------------------------------------------------------------------------
o Other Servicer servicing 20% or more The applicable Servicer
of the pool assets at the time of the
report
--------------------------------------------------------------------------------
o Other material servicers Servicers
--------------------------------------------------------------------------------
o Trustee Trustee
--------------------------------------------------------------------------------
o Custodian Custodian
--------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
--------------------------------------------------------------------------------
o Derivative Counterparty Depositor/Sponsor (if a party to
this Agreement)
--------------------------------------------------------------------------------
Item 2.04- Triggering Events that Master Servicer/Securities
Accelerate or Increase a Direct Administrator/Depositor
Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement
Includes an early amortization,
performance trigger or other event,
including event of default, that would
materially alter the payment
priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other
than waterfall triggers which are
disclosed in the monthly statements to
the certificateholders.
--------------------------------------------------------------------------------
Item 3.03- Material Modification to Securities Administrator/Depositor
Rights of Security Holders
Disclosure is required of any material
modification to documents defining the
rights of Certificateholders, including
the Pooling and Servicing Agreement.
--------------------------------------------------------------------------------
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
Disclosure is required of any amendment
"to the governing documents of the
issuing entity".
--------------------------------------------------------------------------------
Item 6.01- ABS Informational and Depositor
Computational Material
--------------------------------------------------------------------------------
Item 6.02- Change of Servicer or Master Servicer/Securities
Securities Administrator Administrator/Depositor/
applicable successor
Servicer/applicable successor Trustee
Requires disclosure of any removal,
replacement, substitution or addition of
any master servicer, affiliated
servicer, other servicer servicing 10%
or more of pool assets at time of
report, other material servicers or
trustee.
--------------------------------------------------------------------------------
Regulation AB disclosure about any new applicable successor
servicer or master servicer is also Servicer/applicable successor Master
required. Servicers/Depositor
--------------------------------------------------------------------------------
Regulation AB disclosure about any new applicable successor Trustee
Trustee is also required.
--------------------------------------------------------------------------------
Item 6.03- Change in Credit Depositor/Securities Administrator
Enhancement or External 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.
--------------------------------------------------------------------------------
Regulation AB disclosure about any new Depositor
enhancement provider is also
required.
--------------------------------------------------------------------------------
Item 6.04- Failure to Make a Required Securities Administrator
Distribution
--------------------------------------------------------------------------------
Item 6.05- Securities Act Updating Depositor
Disclosure
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Regulation AB disclosure
about the actual asset pool.
--------------------------------------------------------------------------------
If there are any new servicers or Depositor
originators required to be
disclosed under Regulation AB as a
result of the foregoing, provide the
information called for in Items 1108 and
1110 respectively.
--------------------------------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties to this Agreement
(excluding the Trustee)
--------------------------------------------------------------------------------
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 The party to this Agreement
Exhibits responsible for reporting/disclosing
the financial statement or exhibit.
--------------------------------------------------------------------------------
EXHIBIT U
INTEREST RATE SWAP AGREEMENT
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of September 28, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, not
SERVICES INC. individually, but solely as Securities
Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust 2007-HE7, Mortgage Pass-Through
Certificates, Series 2007-HE7
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to
be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
or to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of such
failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be
in full force and effect for the purpose of this Agreement (in
either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a
petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in
a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all
its assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced
or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case
within 30 days thereafter; (8) causes or is subject to any event
with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events
specified in clauses (1) to (7) (inclusive); or (9) takes any
action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it
or its predecessor was a party by operation of law or pursuant to
an agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its obligations
under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party
(or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of
this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party
will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's
Loss in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will
pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is not
the Affected Party, respectively, and, if Loss applies and fewer
than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties: --
(A) if Market Quotation applies, each party will determine
a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I)
the sum of (a) one-half of the difference between the
Settlement Amount of the party with the higher Settlement
Amount ("X") and the Settlement Amount of the party with
the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less
(II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as
otherwise provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable
and may he executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the
State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, not
SERVICES INC. individually, but solely as Securities
Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, Mortgage
Pass-Through Certificates, Series 2007-HE7
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: Date:
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of September 28, 2007
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
a national banking association, not individually,
but solely as Securities Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE7 (the "Trust"), Mortgage Pass-Through Certificates,
Series 2007-HE7
("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) Events of Default. Notwithstanding anything in this Agreement to the
contrary, the following Events of Default shall apply to the
specified party:
Party A Party B
-------------- --------------
(i) Section 5(a)(i), Failure to Pay or Deliver Applicable Applicable
(ii) Section 5(a)(ii), Breach of Agreement Applicable Not Applicable
(iii) Section 5(a)(iii), Credit Support Default Applicable Applicable
(iv) Section 5(a)(iv), Misrepresentation Applicable Not Applicable
(v) Section 5(a)(v), Default Under Specified Transaction Not Applicable Not Applicable
(vi) Section 5(a)(vi), Cross Default Applicable Not Applicable
(vii) Section 5(a)(vii), Bankruptcy Applicable Applicable
(viii) Section 5(a)(viii), Merger Without Assumption Applicable Applicable
provided, however, that with respect to:
(i) Section 5(a)(iii)(1) (Credit Support Default), as it applies
to Party B only, shall be deleted in its entirety and replaced
with the following: "Failure by Party B to comply with or
perform any agreement or obligation to be complied with or
performed by it in accordance with Paragraph 3(b) of the
Credit Support Annex if such failure is continuing after any
applicable grace period has elapsed."
(ii) Section 5(a)(vi) (Cross Default), "Threshold Amount" means,
with respect to Party A, 3% of its Credit Support Provider's
(or the applicable Relevant Entity's) shareholder's equity (as
detailed in its Credit Support Provider's or the Relevant
Entity's most recent financial statements).
(iii) Section 5(a)(vii) (Bankruptcy), (i) clause (2) and (9) shall
not be applicable to Party B; (ii) clause (4) shall not be
applicable to Party B if the proceeding or petition is
instituted or presented by Party A or any of its Affiliates
and is in breach of Party A's agreement set forth in Part 5(j)
of this Schedule; (iii) the appointment of a trustee or other
secured party by Party B or the Certificateholders for the
purpose of holding all or a substantial portion of the assets
of Party B for the benefit of the Certificateholders or Party
A does not qualify as the appointment of a trustee, custodian
or similar official under clause (6); (iv) a security interest
granted by Party B to a trustee, collateral agent, custodian
or other secured party, as applicable (the "Secured Party"),
pursuant to an indenture, trust agreement, pooling and
servicing agreement or other customary securitization
transaction document (the "Security Agreement"), in property
of Party B (the "Securitization Collateral") supporting a
rated securitization transaction (the "Securitization"), and
the rights of the Secured Party in and to the Securitization
Collateral for the benefit of the investors in the
Securitization and/or Party A, is not intended to constitute
and shall not be treated as a secured party taking possession
of the assets of Party B for purposes of clause (7); (v) the
words "seeks or" shall be deleted from clause (6); and (vi)
clause (8) shall not apply to Party B to the extent that
clause (8) relates to clauses of Section 5(a)(vii) that are
not applicable to Party B as a result of the modifications set
forth herein. Notwithstanding the foregoing, for the avoidance
of doubt, the deletion of clause (9) is not intended to render
clauses (1) through (8) inapplicable on the basis that Party B
did not actively contest or oppose any of the acts referred to
in such clauses or, in the case of clause (4), if a proceeding
or petition referred to therein is instituted or presented
against Party B, on the basis that Party B consented to or
acquiesced in a judgment of bankruptcy or insolvency or the
entry of an order for relief or the making of an order for its
winding up or liquidation as a result of such proceeding or
petition.
(c) Termination Events. Notwithstanding anything in this Agreement to
the contrary, the following Termination Events shall apply to the
specified party:
Party A Party B
----------------- -----------------
(i) Section 5(b)(i), Illegality Applicable Applicable
(ii) Section 5(b)(ii), Tax Event Applicable Applicable
(iii) Section 5(b)(iii), Tax Event Upon Merger Applicable Applicable
(iv) Section 5(b)(iv), Credit Event Upon Merger Not Applicable Not Applicable
(v) Section 5(b)(v), Additional Termination Event Applicable (as Applicable(as set
set forth in Part forth in Part 1(h)
1(h)below) below)
provided, however, that with respect to Section 5(b)(iii), Party A shall
not be entitled to designate an Early Termination Date by reason of a Tax
Event Upon Merger in respect of which it is the Affected Party.
(d) The "Automatic Early Termination" provisions of Section 6(a) will
not apply to Party A and will not apply to Party B.
(e) The "Transfer to Avoid Termination Event" provisions of 6(b)(ii)
will apply, provided that the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," shall be
deleted.
(f) Payments on Early Termination.
(i) For the purpose of Section 6(e), "Market Quotation" and
"Second Method" will apply.
(ii) Where an Early Termination Date is designated as a result of
an Event of Default with respect to which Party A is the
Defaulting Party or a Termination Event under Section
5(b)(iii), Section 5(b)(iv) or Section 5(b)(v) with respect to
which Party A is the sole Affected Party, paragraphs (1)
through (8) below shall apply:
(1) The definition of "Market Quotation" shall be deleted in
its entirety and replaced with the following:
"`Market Quotation' means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made
by an Eligible Replacement, (2) for an amount, if any,
that would be paid to Party B (expressed as a negative
number) or by Party B (expressed as a positive number)
in consideration of an agreement between Party B and an
Eligible Replacement to enter into a transaction (the
"Replacement Transaction") that would have the effect of
preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction
of each applicable condition precedent) by the parties
under Section 2(a)(i) in respect of such Terminated
Transactions or group of Terminated Transactions that
would, but for the occurrence of the relevant Early
Termination Date, have been required after that date,
(3) made on the basis that Unpaid Amounts in respect of
the Terminated Transaction or group of Transactions are
to be excluded but, without limitation, any payment or
delivery that would, but for the relevant Early
Termination Date, have been required (assuming
satisfaction of each applicable condition precedent)
after that Early Termination Date is to be included and
(4) made in respect of a Replacement Transaction with
terms substantially the same as those of this Agreement
(save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions).
Party A and Party B will request each Eligible
Replacement to provide a Firm Offer to the extent
reasonably practicable as of the same day and time
(without regard to different time zones). If no Firm
Offers are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or
group of Terminated Transactions cannot be determined.
(2) The definition of "Settlement Amount" shall be deleted
in its entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount (as determined by Party B in
accordance with clauses (a) and (b) below; provided,
however, if Party B fails to make such determination
promptly, Party A shall have the right to make such
determination) equal to:
(a) the Termination Currency Equivalent of the
amount (whether positive or negative) for each
Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined.
If more than one Market Quotation is capable of becoming
legally binding upon acceptance, Party B shall accept
the Market Quotation that constitutes (1) the highest
Market Quotation in the case of a payment by an Eligible
Replacement to Party B or (2) the lowest Market
Quotation in the case of a payment by Party B to an
Eligible Replacement; provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination. If only one
Market Quotation is provided, Party B shall accept the
single Market Quotation. Party B shall be obligated to
accept the Market Quotation immediately upon
determination so as to become legally binding; or
(b) Party B's Loss (whether positive or negative
and without reference to any Unpaid Amounts) for each
Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be
determined.
(3) For the purpose of paragraph (4) of the definition of
Market Quotation, Party B shall make reasonable efforts
to determine, acting in a commercially reasonable
manner, whether a Firm Offer is made in respect of a
Replacement Transaction with terms substantially the
same as those of this Agreement (save for the exclusion
of provisions relating to Transactions that are not
Terminated Transactions); provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination.
(4) Party B undertakes to use its reasonable efforts to
obtain at least one Market Quotation on or before the
later of (a) the Early Termination Date or (b) 10
Business Days following the designation of the Early
Termination Date (the "Latest Settlement Amount
Determination Day").
(5) Party B will be deemed to have discharged its
obligations under (4) above if it requests Party A to
obtain Market Quotations, where such request is made in
writing within two Business Days after the day on which
the Early Termination Date is designated.
(6) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to
do so before the Latest Settlement Amount Determination
Day.
(7) Party A shall have the right to obtain Market
Quotations, without prior request by Party B, before the
Latest Settlement Amount Determination Day.
(8) If the Settlement Amount is a negative number, Section
6(e)(i)(3) of this Agreement shall be deleted in its
entirety and replaced with the following:
"Second Method and Market Quotation. If Second Method
and Market Quotation apply, (1) Party B shall pay to
Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated
Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B, provided that, (i) the amounts
payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) of this Agreement and (ii)
notwithstanding any other provision of this Agreement,
any amount payable by Party A under (3) due to a failure
by Party A to make, when due, any payment under this
Agreement, shall not be netted against any amount
payable by Party B under (1)."
(g) "Termination Currency" means U.S. Dollars.
(h) Additional Termination Event.
(A) The following Additional Termination Event will apply to Party
A, with Party A as the sole Affected Party and all Transaction
as Affected Transactions.
(i) Party A fails to comply with the Rating Agency Downgrade
provisions as set forth in Part 5(f) below; or
(ii) A Firm Offer is accepted by Party B pursuant to Part
5(f)(ii)(2)(B) following a ▇▇▇▇▇'▇ Second Tier Downgrade
Event.
(B) The following Additional Termination Events will apply to
Party B, with Party B as the sole Affected Party and all
Transaction as Affected Transactions.
(i) Upon any amendment, supplement, modification or waiver
of any provision of the PSA (as defined below) without
the consent of Party A that materially and adversely
affects the rights or interests of Party A.
(ii) The Servicer exercises its option to purchase the
Mortgage Loans pursuant to Section 11.01 of the PSA.
(iii) Upon the irrevocable direction to dissolve or otherwise
terminate the Trust following which all assets of the
Trust will be liquidated and the proceeds of such
liquidation distributed to the Certificateholders.
Part 2. Tax Representations.
Party A and Party B Payer Tax Representations.
(i) For the purpose of Section 3(e), each of Party A and Party B
makes the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on
account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii), or 6(e) of this Agreement) to be made by it
to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement, (ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and
effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the
satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(ii) For the purposes of Section 3(f), Party A makes the following
representation:
Party A is a U.S. corporation organized under the laws of Delaware.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party required
to deliver
document Form/Document/Certificate Date by which to be delivered
-------------- ----------------------------- -----------------------------
Party A A correct, complete and (i) Upon entering into this
duly executed IRS Form W-9. Agreement, (ii) promptly upon
reasonable demand by Party B,
and (iii) promptly upon
learning that any such Form
previously provided by Party
A has become obsolete or
incorrect.
Party B (i) A correct, complete and (a) With respect to clause
duly executed IRS Form W-9 (i) of the adjacent column,
(or any successor thereto) the Securities Administrator
that eliminates U.S. shall apply for the employer
federal withholding and identification number of the
backup withholding tax on Trust promptly upon entering
payments under this into this Agreement and
Agreement, (ii) if deliver the related correct,
requested by Party A, a complete and duly executed
correct, complete and duly IRS Form W-9 promptly upon
executed Form W-8IMY, and receipt, and in any event, no
(iii) a complete and later than the first Payment
executed IRS Form W-9, Date of this Transaction; (b)
W-8BEN, W-8ECI, or W-8IMY in the case of a W-8ECI,
(with attachments) (as W-8IMY, and W-8BEN that does
appropriate) from each not include a U.S. taxpayer
Certificateholder that is identification number in line
not an "exempt recipient" 6, before December 31 of each
as that term is defined in third succeeding calendar
Treasury regulations year, (c) promptly upon
section 1.6049-4(c)(ii), reasonable demand by Party A,
that eliminates U.S. and (d) promptly upon actual
federal withholding and knowledge that any such Form
backup withholding tax on previously provided by Party
payments under this B has become obsolete or
Agreement. incorrect.
(b) Other documents to be delivered are:-
Party required Covered by
to deliver Section 3(d)
document Form/Document/Certificate Date by which to be delivered Representation
-------------- ------------------------------- ----------------------------- --------------
Party A Either (1) a signature booklet The earlier of the fifth Yes
and containing secretary's Business Day after the Trade
Party B certificate and resolutions Date of the first Transaction
("authorizing resolutions") or upon execution of this
authorizing the party to enter Agreement and as deemed
into derivatives transactions necessary for any further
of the type contemplated by documentation.
the parties or (2) a
secretary's certificate,
authorizing resolutions and
incumbency certificate, in
either case, for such party
and any Credit Support
Provider of such party
reasonably satisfactory in
form and substance to the
other party.
Party B An executed copy of the
Pooling and Servicing Upon execution of this Yes
Agreement ("PSA"), dated as of Agreement.
[September [1], 2007], among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, Deutsche
Bank National Trust Company,
as Trustee, Saxon Mortgage
Services, Inc., as Servicer,
Countrywide Home Loans
Servicing LP, as Servicer,
▇▇▇▇▇ Fargo Bank, National
Association, as Master
Servicer and Securities
Administrator and LaSalle Bank
National Association, as
Custodian.
Party A A duly executed copy of the As soon as practicable after No
and Credit Support Document the execution of this
Party B specified in Part 4 of this Agreement.
Schedule.
Party A An opinion of counsel As soon as practicable after No
and Party B reasonably satisfactory in the execution of this
form and substance to the Agreement.
other party.
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
(i) Address for notices or communications to Party A:-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
Transaction Management Group
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: CHIEF LEGAL OFFICER
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
(ii) Address for notices or communications to Party B:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager--MSAC 2007-HE7
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) Notices. Section 12(a) is amended by adding in the third line
thereof after the phrase "messaging system" and before the ")" the
words, "; provided, however, any such notice or other communication
may be given by facsimile transmission if telex is unavailable, no
telex number is supplied to the party providing notice, or if answer
back confirmation is not received from the party to whom the telex
is sent."
(c) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(d) Offices. The provisions of Section 10(a) will not apply to Party A
and to Party B.
(e) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) "Calculation Agent" means Party A.
(g) "Credit Support Document" means (a) with respect to Party A, (1) the
Credit Support Annex between Party A and Party B dated as of the
date hereof (the "Credit Support Annex") and (2) the guarantee of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and (b) with respect to Party B, the Credit Support
Annex.
(h) Credit Support Provider means in relation to Party A: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, a Delaware corporation.
Credit Support Provider means in relation to Party B: None
(i) Governing Law; Jurisdiction. This Agreement, each Credit Support
Document and each Confirmation will be governed by and construed in
accordance with the laws of the State of New York without regard to
conflict of law provisions thereof other than New York General
Obligations Law Sections 5-1401 and 5-1402. Section 13(b) is amended
by: (1) deleting "non-" from the second line of clause (i); and (2)
deleting the final paragraph.
(j) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any
Credit Support Document.
(k) Netting of Payments. Clause (ii) of Section 2(c) will apply to any
amounts payable with respect to Transactions from the date of this
Agreement.
(l) "Affiliate". Party A and Party B shall be deemed not to have any
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii). For the avoidance of doubt, with respect to Party
A, such definition shall be understood to exclude ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Derivative Products Inc.
(m) Additional Definitions. All capitalized terms used but not otherwise
defined in this Agreement shall have the meanings given thereto in
the PSA.
Part 5. Other Provisions
(a) Additional Representations.
(i) The introductory clause of Section 3 of this Agreement is
hereby amended to read in its entirety as follows:
"Each party represents to the other party (which
representations will be deemed to be repeated by each party on
each date on which a Transaction is entered into and, in the
case of the representations in Section 3(f) and Section
3(g)(4), at all times until the termination of this Agreement)
that:--"
(ii) Section 3 of this Agreement is hereby amended by adding at the
end thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding a Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) Evaluation and Understanding.
(i) Non-Reliance. In the case of Party A, it is
acting for its own account, and in the case of Party B,
the Securities Administrator is acting on behalf of the
Trust. Party A has made its own independent decisions to
enter into each Transaction under this Agreement and as
to whether such Transaction is appropriate or proper for
it based upon its own judgment and upon advice from such
advisers as it has deemed necessary and, with respect to
Party B, it has entered into each Transaction under this
Agreement as directed under the PSA. It is not relying
on any communication (written or oral) of the other
party as investment advice or as a recommendation to
enter into such Transaction; it being understood that
information and explanations related to the terms and
conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance
or guarantee as to the expected results of each such
Transaction.
(ii) Assessment and Understanding. It is capable
of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.
(iii) Status of Parties. The other party is not
acting as a fiduciary for or an adviser to it in respect
of that Transaction.
(3) Purpose. It is an "eligible swap participant" as
such term is defined in Section 35.1(b)(2) of the regulations
(17 C.F.R 35) promulgated under, and an "eligible contract
participant" as defined in Section 1a(12) of, the Commodity
Exchange Act, as amended, and it is entering into the
Transaction for the purposes of managing its borrowings or
investments, hedging its underlying assets or liabilities or
in connection with a line of business.
(4) ERISA Representation.
(i) Party A represents and warrants at all times
hereunder that it is not a pension plan or employee
benefit plan and that it is not using assets of any such
plan or assets deemed to be assets of such a plan in
connection with any Transaction under this Agreement,
and
(ii) Party B represents and warrants at all times
hereunder that (x) it is not a pension plan or employee
benefit plan, and (y) (1) that it is not acting on
behalf of any such plan or using assets of any such plan
or assets deemed to be assets of any such plan in
connection with any Transaction under this Agreement or
(2) any pension plan or employee benefits plan subject
to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
person who is acting on behalf of such a plan, or using
assets of such plan or assets deemed to be "plan assets"
of such plan for purposes of ERISA or the Code, who
purchases a certificate issued by the Trust while this
Agreement is in existence (i) shall represent or shall
be deemed to represent that the purchase and holding of
such certificate is in reliance on at least one of the
Prohibited Transaction Class Exemptions of ▇▇-▇▇, ▇▇-▇,
▇▇-▇▇, ▇▇-▇▇ ▇▇ ▇▇-▇▇ ▇▇ (▇▇) shall provide an opinion
of counsel which states that such purchase and holding
is permissible under applicable law and will not result
in a prohibited transaction under ERISA or Section 4975
of the Code."
(b) Set-off. Subject to Section 2(c), Paragraphs 8(a) and 8(b) of the
Credit Support Annex and Part 1(f)(ii)(8) hereof, notwithstanding
any other provision of this Agreement or any other existing or
future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold, suspend
or condition payment or performance of any obligation between it and
the other party hereunder against any obligation between it and the
other party under any other agreements. Section 6(e) is hereby
amended by the deletion of the following sentence at the end of the
first paragraph thereof: "The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off."
(c) Confirmations. Party A will deliver to Party B a Confirmation
relating to each Transaction.
(d) Form of Agreement. The parties hereby agree that the text of the
body of this Agreement is intended to be the printed form of 1992
ISDA Master Agreement (Multicurrency--Cross Border) as published and
copyrighted by the International Swaps and Derivatives Association,
Inc.
(e) Transfer, Termination, Amendment and Assignment.
(i) This Agreement may not be amended unless prior written notice
is given to Moody's and Rating Agency Confirmation from S&P is
obtained.
(ii) Notwithstanding any other provision of this Agreement, no
Early Termination Date shall be effectively designated by
Party B (other than an Early Termination Date designated under
Part 5(f)(ii)(3)) unless Moody's has been given prior written
notice of such designation.
(iii) Party B may, with the prior written consent of Party A and
subject prior written notice to Moody's and Rating Agency
Confirmation from S&P, assign, novate or transfer its rights
and obligations under the Agreement to a third party.
Notwithstanding Section 7 of this Agreement, Party A may, at
its own discretion and at its own expense, subject to giving
reasonable notice of transfer to Moody's and subject to Rating
Agency Confirmation with respect to S&P, assign, novate or
transfer its rights and obligations under this Agreement
(including any Transactions hereunder) to any third party
including, without limitation, another of Party A's offices,
branches or affiliates (the "Transferee"), provided that:
(1) such third party agrees to be bound by, inter alia,
the payment, transfer and collateral terms of this Agreement
(including any Transactions hereunder) and substantially all
other terms as the party which it replaces;
(2) such third party is an Eligible Replacement;
(3) a Termination Event or an Event of Default does not
occur under this Agreement as a result of such transfer;
(4) if the Transferee is domiciled in a different
jurisdiction from both Party A and Party B, the rating of the
Certificates assigned by S&P are not adversely affected;
(5) as of the date of the transfer the Transferee will
not, as a result of such transfer, be required to withhold or
deduct on account of tax under this Agreement; and
(6) as of the date of such transfer, neither the
Transferee nor Party B will be required to withhold or deduct
any increased amount on account of any Taxes under this
Agreement as a result of such transfer, unless, as of the date
of such transfer, (x) Party B is entitled to additional
amounts under Section 2(d)(i)(4) on account of any such Taxes
required to be deducted or withheld by the Transferee and (y)
Party B is not required to pay Transferee additional amounts
under Section 2(d)(i)(4) on account of any such Taxes required
to be deducted or withheld by Party B.
Following such transfer, all references herein to Party
A shall be deemed to be references to the Transferee.
(f) Rating Agency Downgrade.
(i) Moody's First Tier Downgrade. In the event the Relevant Entity
is downgraded below the Moody's First Tier Required Swap
Counterparty Ratings (a "Moody's First Tier Downgrade Event")
then, within 30 Business Days after the occurrence of such
Moody's First Tier Downgrade Event, Party A shall, at its
option and at its own expense, either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, is rated below the Moody's First Tier
Required Swap Counterparty Rating, such Eligible
Replacement shall immediately Transfer Eligible Credit
Support to Party B pursuant to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the Moody's First Tier Required Swap
Counterparty Rating; or
(C) Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex.
(ii) Moody's Second Tier Downgrade. (1) In the event that no
Relevant Entity has the Moody's Second Tier Required Swap
Counterparty Rating (a "Moody's Second Tier Downgrade Event")
then, Party A shall, at its option and at its own expense, use
commercially reasonable efforts to as soon as reasonably
practicable either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; or
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the Moody's Second Tier Required Swap
Counterparty Rating.
(2) If no Eligible Replacement or Eligible Guarantee has been
effected in accordance with Part 5(f)(ii)(1)(A) or (B) above
within 30 Business Days of such Moody's Second Tier Downgrade
Event then:
(A) Party A shall Transfer Eligible Credit Support to Party
B pursuant to the Credit Support Annex until such
replacement or Eligible Guarantee takes effect or, if
sooner, no Moody's Second Tier Downgrade Event is
occurring; and
(B) without prejudice to Party A's right to continue to seek
an Eligible Replacement or an Eligible Guarantee
pursuant to Part 5(f)(ii)(1)(A) and (B), Party B shall
also have the right (but not the obligation) on any
Business Day thereafter to obtain Firm Offers (such day
a "Firm Offer Solicitation Date") by giving Party A
written notice of its intention to seek Firm Offers no
later than 12:00 p.m., New York time, on the Business
Day prior to the Firm Offer Solicitation Date. Such
notice shall indicate the day and time as of which each
Eligible Replacement will be requested to provide its
Firm Offer; provided that Eligible Replacements shall
not provide Firm Offers prior to 12:00 p.m. New York
time, on the Firm Offer Solicitation Date. Party B shall
undertake to use reasonable efforts to seek at least 5
Firm Offers and Party B shall request each entity
providing a Firm Offer to do so to the extent reasonably
practicable as of the same day and time (without regard
to different time zones). If more than one Firm Offer
remains capable of becoming legally binding upon
acceptance, Party B shall accept the Firm Offer that
constitutes (1) the highest Firm Offer in the case of a
payment by an Eligible Replacement to Party B or (2) the
lowest Firm Offer in the case of a payment by Party B to
an Eligible Replacement; provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination. If only one
Firm Offer is provided, Party B shall accept the single
Firm Offer. Party B shall be obligated to accept the
Firm Offer upon determination; provided however, prior
to accepting such Firm Offer, Party B shall (1) on a day
that is a Business Day, provide Party A with at least 24
hours prior written notice of its intent to accept such
Firm Offer (which acceptance, in all cases, shall be on
a Business Day) and (2) confirm that Party A has not
identified an Eligible Replacement. If at anytime prior
to Party B's acceptance of a Firm Offer, Party A has
identified an Eligible Replacement then, in its sole
discretion, Party A may transfer its rights and
obligations under this Agreement to such Eligible
Replacement and an Early Termination Date will not
occur. If a Firm Offer is accepted by Party B, then,
notwithstanding Section 6 of the ISDA Master Agreement,
an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon such acceptance
by Party B and the Settlement Amount will equal the Firm
Offer so accepted by Party B.
(3) Notwithstanding Part 5(f)(ii)(1) and (2) above, an
Additional Termination Event under this Part 5(f)(ii) shall
only occur with Party A as the sole Affected Party if:
(A) a Moody's Second Tier Downgrade Event has occurred and
has been continuing for 30 or more Business Days; and
(B) at least one Eligible Replacement has made a Firm Offer
in accordance with Part 5(f)(ii)(2)(B) above which
remains capable of becoming legally binding upon
acceptance by the offeree.
(iii) S&P First Tier Downgrade. (1) In the event the Relevant Entity
that is a Financial Institution is downgraded below the S&P
First Tier Required Swap Counterparty Rating (an "S&P First
Tier Downgrade Event") then Party A shall, at its option and
at its own expense, either:
(A) subject to Rating Agency Confirmation, within 60
calendar days after the occurrence of such S&P First
Tier Downgrade Event, cause an Eligible Replacement to
replace Party A as party to this Agreement; provided
that if such Eligible Replacement or its Credit Support
Provider, as applicable, is a Financial Institution and
is rated below the S&P First Tier Required Swap
Counterparty Rating, such Eligible Replacement shall
immediately Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex;
(B) subject to Rating Agency Confirmation, within 60
calendar days after the occurrence of such S&P First
Tier Downgrade Event, obtain an Eligible Guarantee in
respect of Party A's obligations under this Agreement
that is provided by an entity with the S&P First Tier
Required Swap Counterparty Rating;
(C) within 10 Business Days after the occurrence of such S&P
First Tier Downgrade Event, transfer Eligible Credit
Support to Party B pursuant to the Credit Support Annex;
or
(D) subject to Rating Agency Confirmation, take other steps,
if any, to enable Party B to remedy a downgrade by S&P
below the S&P First Tier Required Swap Counterparty
Rating.
(2) Pending compliance with Part 5(f)(iii)(1), Party A shall
Transfer Eligible Credit Support to Party B pursuant to the
Credit Support Annex within 10 Business Days after an S&P
First Tier Downgrade Event.
For the avoidance of doubt, this Part 5(f)(iii) shall only be
applicable to Financial Institutions.
(iv) S&P Second Tier Downgrade. (1) In the event that no Relevant
Entity has the S&P Second Tier Required Swap Counterparty
Rating (an "S&P Second Tier Downgrade Event") then, Party A
shall, at its option and at its own expense, use commercially
reasonable efforts to either:
(A) subject to Rating Agency Confirmation, within 60
calendar days after such S&P Second Tier Downgrade
Event, cause an Eligible Replacement to replace Party A
as party to this Agreement; provided that if such
Eligible Replacement or its Credit Support Provider, as
applicable, is a Financial Institution and is rated
below the S&P First Tier Required Swap Counterparty
Rating, such Eligible Replacement shall immediately
Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex; or
(B) subject to Rating Agency Confirmation, within 60
calendar days after such S&P Second Tier Downgrade
Event, obtain an Eligible Guarantee in respect of Party
A's obligations under this Agreement that is provided by
an entity with the S&P First Tier Required Swap
Counterparty Rating or the S&P Second Tier Required Swap
Counterparty Rating; provided that if such Eligible
Guarantor is a Financial Institution and is rated below
the S&P First Tier Required Swap Counterparty Rating,
Party A shall immediately Transfer Eligible Credit
Support to Party B pursuant to the Credit Support Annex;
(2) Pending compliance with Part 5(f)(iv)(1)(A) or (B) Party A
shall Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex within 10 Business Days after an S&P
Second Tier Downgrade Event.
(v) Failure to act in accordance with this Part 5(f), including
any failure by Party A to comply with or perform any
obligation to be complied with or performed by Party A under
the Credit Support Annex, shall constitute an Additional
Termination Event with Party A as the sole Affected Party;
provided that, failure by Party A to Transfer Eligible Credit
Support to Party B in accordance with Part 5(f)(ii)(2) above
shall constitute an Event of Default under Section
5(a)(iii)("Credit Support Default") if such failure is not
remedied on or before the third Business Day after notice of
such failure is given to Party A.
(vi) For purposes of this Part 5(f), but subject to Part
5(f)(ii)(3), Party A shall be responsible for (1) posting
collateral in accordance with such Credit Support Annex at its
own cost; and (2) any cost incurred by it in complying with
its obligations.
(g) Rating Agency Downgrade Definitions.
(i) For purposes of this Agreement,
"Eligible Guarantee" means an unconditional and irrevocable
guarantee, letter of credit or other arrangement that is
provided by a party as principal obligor rather than surety
and is directly enforceable by Party B.
"Eligible Replacement" means an entity (1) with the Moody's
First Tier Required Swap Counterparty Ratings and/or the
Moody's Second Tier Required Swap Counterparty Ratings or
whose present and future obligations owing to Party B are
supported pursuant to an Eligible Guarantee provided by a
party with the Moody's First Tier Required Swap Counterparty
Ratings and/or the Moody's Second Tier Required Swap
Counterparty Ratings, and (2) with the S&P First Tier Required
Swap Counterparty Ratings and/or the S&P Second Tier Required
Swap Counterparty Ratings or whose present and future
obligations owing to Party B are supported pursuant to an
Eligible Guarantee provided by a party with the S&P First Tier
Required Swap Counterparty Ratings and/or the S&P Second Tier
Required Swap Counterparty Ratings; provided that no entity
shall be an Eligible Replacement unless (A) a legal opinion
confirms that none of such Eligible Replacement's payments to
Party B under this Agreement will be subject to deduction or
withholding for or on account of any Tax or (B)
notwithstanding the definition of "Indemnifiable Tax" in
Section 14 of this Agreement, all Taxes in relation to
payments by such Eligible Replacement shall be Indemnifiable
Taxes unless such Taxes (x) are assessed directly against
Party B and not by deduction or withholding by such Eligible
Replacement or (y) arise as a result of a Change in Tax Law
(in which case such Tax shall be an Indemnifiable Tax only if
such Tax satisfies the definition of Indemnifiable Tax
provided in Section 14).
"Financial Institution" means (i) Party A or any of its
affiliates, with their respective obligations guaranteed by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or (ii) a bank, broker/dealer, insurance
company, structured product investment vehicle, or derivative
product company or a subsidiary of any such entity.
"Firm Offer" means an offer which, when made, was capable of
becoming legally binding upon acceptance.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc. and any
successor to its rating business.
"Moody's First Tier Required Swap Counterparty Rating" means
(i) if such counterparty or entity has only Long-Term Rating
by Moody's, a Long-Term Rating of at least "A1" by Moody's or
(ii) if such counterparty or entity has both a Long-Term
Rating and a Short-Term Rating by Moody's, a Long-Term Rating
of at least "A2" by Moody's and a Short-Term Rating of at
least "P-1" by Moody's.
"Moody's Second Tier Required Swap Counterparty Rating" means
(i) if such counterparty or entity has only a Long-Term Rating
by Moody's, a Long-Term Rating of at least "A3" by Moody's or
(ii) if such counterparty or entity has both a Long-Term
Rating and a Short-Term Rating by Moody's, a Long-Term Rating
of at least "A3" by Moody's and a Short-Term Rating of at
least "P-2" by ▇▇▇▇▇'▇.
"Rating Agencies" means Moody's and S&P.
"Rating Agency Confirmation" means, with respect to any
particular proposed act or omission to act hereunder, that the
party acting or failing to act must consult with S&P and
receive from S&P a prior written confirmation that the
proposed action or inaction would not cause a downgrade or
withdrawal of the then current rating of the Certificates;
provided that S&P is then providing a rating of the
Certificates.
"Relevant Entity" means Party A, Party A's Credit Support
Provider and any principal obligor under an Eligible Guarantee
in respect of Party A's obligations under this Agreement.
"S&P" means Standard and Poor's Ratings Services, a division
of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor to its
rating business.
"S&P First Tier Required Swap Counterparty Rating" means, if
such counterparty or entity is a Financial Institution, (i) a
Short-Term Rating of at least "A-1" by S&P or (ii) if such
counterparty or entity does not have a Short-Term Rating by
S&P, a Long-Term Rating of at least "A+" by S&P. For the
avoidance of doubt, the S&P First Tier Required Swap
Counterparty Rating shall not be applicable to entities other
than Financial Institutions.
"S&P Second Tier Required Swap Counterparty Rating" means (A)
if such counterparty or entity is a Financial Institution, (i)
a Short-Term Rating of at least "A-2" by S&P or (ii) if such
counterparty or entity does not have a Short-Term Rating from
S&P, a Long-Term Rating of at least "BBB+" by S&P or (B) if
such counterparty or entity is not a Financial Institution,
(i) a Short-Term Rating of at least "A-1" by S&P or (ii) if
such counterparty or entity does not have a Short-Term Rating
from S&P, a Long-Term Rating of at least "A+" by S&P.
(h) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance,
shall be held to be invalid or unenforceable (in whole or in part)
for any reason, the remaining terms, provisions, covenants, and
conditions hereof shall continue in full force and effect as if this
Agreement had been executed with the invalid or unenforceable
portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement
and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the
parties; provided, however, that nothing in this provision shall
adversely affect the rights of each party under this Agreement; and
provided further that this severability provision shall not be
applicable if any provision of Section 1, 2, 5, 6, or 13 (or any
definition or provision in Section 14 to the extent it relates to,
or is used in or connection with any such Section) shall be so held
to be invalid or unenforceable. The parties shall endeavor to engage
in good faith negotiations to replace any invalid or unenforceable
term, provision, covenant or condition with a valid or enforceable
term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable
term, provision, covenant or condition.
(i) Consent to Recording. Each party hereto consents to the monitoring
or recording, at any time and from time to time, by the other party
of any and all communications between trading and marketing
personnel of the parties, waives any further notice of such
monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(j) Proceedings. Party A shall not institute against or cause any other
person to institute against, or join any other person in instituting
against, the Trust or ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Securities Administrator, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state
bankruptcy or similar law for a period of one year and one day (or,
if longer, the applicable preference period) following payment in
full of the Certificates; provided, however, that this shall not
restrict or prohibit Party A from joining in any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation
proceedings or other analogous proceedings under applicable laws.
This part 5(j) shall survive the termination of this agreement.
(k) Regulation AB. Upon request by the Depositor, Party A may, at its
option, but is not required to, (A) (a) provide the financial
information required by Item 1115(b)(1) or (b)(2) of Regulation AB
(as specified by the Depositor to Party A) with respect to Party A
(or any guarantor of Party A if providing the financial data of a
guarantor is permitted under Regulation AB) and any affiliated
entities providing derivative instruments to Party B (the "Company
Financial Information"), in a form appropriate for use in the
Exchange Act Reports and in an ▇▇▇▇▇-compatible form; (b) if
applicable, cause its accountants to issue their consent to filing
or incorporation by reference of such financial statements in the
Exchange Act Reports of Party B and (c) within 5 Business Days of
the release of any updated financial information, provide current
Company Financial Information as required under Item 1115(b) of
Regulation AB to the Depositor in an ▇▇▇▇▇-compatible form and, if
applicable, cause its accountants to issue their consent to filing
or incorporation by reference of such financial statements in the
Exchange Act Reports of Party B or (B) assign this Agreement at its
own cost to another entity that has agreed to take the actions
described in clause (A) of this sentence with respect to itself (and
which has the Required Swap Counterparty Rating and the assignment
to which would satisfy the Rating Agency Condition). For the
avoidance of doubt, Party A is not required to take any action
pursuant to this paragraph and the failure of Party A to take any
such action will not constitute an Event of Default under this
Agreement.
As used in this Agreement the following words shall have the
following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Depositor" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
"▇▇▇▇▇" shall mean the Commission's Electronic Data Gathering,
Analysis and Retrieval system.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder
"Exchange Act Reports" shall mean all Distribution Reports on Form
10-D, Current Reports on Form 8-K and Annual Reports on Form 10-K
that are to be filed with respect to Party B pursuant to the
Exchange Act.
"Regulation AB" shall mean the Asset Backed Securities Regulation
AB, 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation
as have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff
from time to time.
(l) Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Agreement is
executed by ▇▇▇▇▇ Fargo Bank, National Association (i) this
Agreement is executed and delivered by ▇▇▇▇▇ Fargo Bank, National
Association not in its individual capacity but solely as Securities
Administrator under the PSA in the exercise of the powers and
authority conferred and vested in it as Securities Administrator
thereunder, (ii) each of the representations, undertakings and
agreements herein made on behalf of Party B is made and intended not
as personal representations of the Securities Administrator but is
made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall ▇▇▇▇▇ Fargo Bank, National
Association in its individual capacity be personally liable for the
payment of any indebtedness or expenses or be personally liable for
the breach or failure of any obligation, representation, warranty or
covenant made or undertaken under this Agreement.
(m) "Indemnifiable Tax" Notwithstanding the definition of "Indemnifiable
Tax" in Section 14 of this Agreement, in relation to payments by
Party A, no Tax shall be an Indemnifiable Tax.
(n) If Party A consolidates or amalgamates with, merges with or into, or
transfers all or substantially all its assets to, another entity,
where such action does not constitute an event described in Section
5(a)(viii), Party A shall either (A) provide a legal opinion that
none of Party A's payments to Party B under this Agreement will be
subject to deduction or withholding for or on account of any Tax or
(B) notwithstanding the definition of "Indemnifiable Tax" in Section
14 of this Agreement, all Taxes in relation to payments by Party A
shall be Indemnifiable Taxes unless such Taxes (x) are assessed
directly against Party B and not by deduction or withholding by such
Eligible Replacement or (y) arise as a result of a Change in Tax Law
(in which case such Tax shall be an Indemnifiable Tax only if such
Tax satisfies the definition of Indemnifiable Tax provided in
Section 14).
IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized officers as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-HE7, Mortgage
Pass-Through Certificates, Series
2007-HE7
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: Date:
EXHIBIT A
Credit Support Annex
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations with respect to
Party A and Party B: None.
(b) Credit Support Obligations.
(i) "Delivery Amount" and "Return Amount" each has the meaning specified
in Paragraph 3; provided that, in the event that Party A elects or
is required to post collateral pursuant to a ratings downgrade by
S&P and ▇▇▇▇▇'▇, (1) the Delivery Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party A transferring the greater amount of Eligible
Credit Support and (2) the Return Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party B transferring the least amount of Posted
Credit Support; provided further that, for purposes of calculating
Delivery Amount and Return Amount, in the event that Party A elects
or is required to post collateral pursuant to an S&P Second Tier
Downgrade Event, the definition of Value shall be amended to insert
the words "multiplied by the applicable Valuation Percentage, if
any" after the word "thereof" and before the semicolon in clause
(i)(A) thereof.
"Credit Support Amount" has the meaning specified below:
(A) in the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iii) or (iv) of the Schedule due to a
ratings downgrade or withdrawal by S&P, "Credit Support
Amount" shall have the meaning specified in Paragraph 3; and
(B) in the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iv) of the Schedule due to a ratings
downgrade or withdrawal by S&P, "Credit Support Amount" shall
mean 125% of the Secured Party's Exposure; and
(C) in the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Rating, "Credit Support Amount" shall have the
meaning specified in Table 1A or Table 1B, as applicable,
attached hereto; and
(D) in the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ Second Tier Required
Swap Counterparty Rating, "Credit Support Amount" shall have
the meaning specified in Table 2A or 2B, as applicable,
attached hereto.
(ii) Eligible Collateral.
(A) In the event Party A elects or is required to post collateral
pursuant to Part 5(f) (iii) of the Schedule due to a ratings
downgrade or withdrawal by S&P, (i) the items specified in
Table 3 attached hereto will qualify as "Eligible Collateral"
for Party A and (ii) the Valuation Percentage with respect any
item of Eligible Collateral shall equal 100% divided by the
Base Overcollateralization Rate for such item of Eligible
Collateral specified in Table 3 attached hereto.
(B) In the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iv) of the Schedule due to a ratings
downgrade or withdrawal by S&P, (i) the items specified in
Table 3 attached hereto will qualify as "Eligible Collateral"
for Party A and (ii) the Valuation Percentage with respect any
item of Eligible Collateral shall equal (1) 100% divided by
(2) the Base Overcollateralization Rate for such item of
Eligible Collateral specified in Table 3 attached hereto *
125%.
(C) In the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Rating, the items specified in Table 4 attached
hereto will qualify as "Eligible Collateral" for Party A.
(D) In the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ Second Tier Required
Swap Counterparty Rating, the items specified in Table 5
attached hereto will qualify as "Eligible Collateral" for
Party A.
(iii) Other Eligible Support: Not applicable.
(iv) Thresholds.
(A) "Independent Amount" means, with respect to Party A, not
applicable in the event Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due to a
ratings downgrade or withdrawal by S&P or ▇▇▇▇▇'▇.
"Independent Amount" means, with respect to Party B, zero.
(B) "Threshold" means with, respect to Party A, (i) not applicable
in the event Party A elects or is required to post collateral
pursuant to Part 5(f) of the Schedule due to a ratings
downgrade or withdrawal by ▇▇▇▇▇'▇ and (ii) zero in the event
Party A elects or is required to post collateral pursuant to
Part 5(f) of the Schedule due to a ratings downgrade or
withdrawal by S&P.
"Threshold" means with respect to Party B: Infinite.
"Minimum Transfer Amount" means with respect to Party A: USD
50,000; and with respect to Party B: USD 50,000; provided,
however, that if such party is a Defaulting Party at the time,
"Minimum Transfer Amount" shall mean zero with respect to such
party.
(C) Rounding. The Delivery Amount will be rounded up to the
nearest multiple of $1000 and the Return Amount will be
rounded down to the nearest multiple of $1000.
(v) "Exposure" has the meaning specified in Paragraph 12, except that
after the word "Agreement" in the fourth line thereof the words
"(assuming, for this purpose only, that Part 1(f)(ii) of the
Schedule is deleted)" shall be inserted.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means (A) each and every Wednesday commencing on
the first such date following the date hereof or if any Wednesday is
not a Local Business Day, the next succeeding Local Business Day and
(B) any other Local Business Day on which notice is made before
12:00 noon, New York time on the immediately preceding Local
Business Day.
(iii) "Valuation Time" means the close of business in New York on the New
York Banking Day before the Valuation Date or date of calculation,
as applicable, or any time on the Valuation Date or date of
calculation, as applicable; provided that the calculations of Value
and Exposure will be made as of approximately the same time on the
same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
(v) The Valuation Agent's calculations pursuant to the terms hereof
shall be made in accordance with standard market practice, using
commonly accepted third party sources that comply with S&P's
criteria (e.g. Bloomberg, Bridge Information Services, Reuters and
Telerate).
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the party
specified (that party being the Affected Party of the Termination Event
occurs with respect to that party): Not Applicable.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. The Pledgor need not obtain the Secured Party's consent for
any substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support or of any Transfer of Eligible Credit Support
or Posted Credit Support, as the case may be, will be calculated by
the Valuation Agent in accordance with standard market practice
using third party sources (such as, by way of example only,
Bloomberg or Reuters) where available.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodian.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(A) Party B is not a Defaulting Party.
(B) Posted Collateral may be held only in the following
jurisdictions: the United States of America.
(C) Party B's Custodian (or its parent) shall have a Long Term
Rating by S&P of at least "A" and a Short Term Rating by S&P
of at least "A-1" by S&P (the "Custodian Required Rating
Threshold"). If ay any time the Custodian does not have credit
ratings from S&P at least equal to the Custodian Required
Rating Threshold, the Securities Administrator must within 60
calendar days obtain a replacement Custodian with credit
ratings from S&P at least equal to the Custodian Required
Ratings Threshold.
(D) Posted Collateral may be held only in a segregated trust
account.
Initially, the Custodian for Party B is the Securities
Administrator.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will
not apply to Party B, but the provisions of Paragraph 6(c)(ii) will
apply to Party B.
(h) Distributions and Interest Amount.
(i) "Interest Rate". The "Interest Rate" shall be the rate actually
earned by Party B on Posted Collateral in the form of Cash.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the last Local Business Day of each calendar month
and on any Local Business Day that Posted Collateral in the form of
Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support. "Value" and "Transfer"
with respect to Other Eligible Support and Other Posted Support each
means: Not applicable.
(k) Demands and Notices.
(i) All demands, specifications and notices to Party A under this Annex
will be made to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: FID Collateral Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
and all demands, specifications and notices to Party B under this Annex
will be to:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager--MSAC 2007-HE7
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
; provided that any demand, specification or notice may be made by
telephone ("Telephone Notice") between employees of each party if such
Telephone Notice is confirmed by a subsequent written instruction (which
may be delivered via facsimile or email) by the close of business on the
same day that such Telephone Notice is given.
(ii) Demand for Collateral. Without prejudice to any provision of this
Agreement, if a Delivery Amount for a Valuation Date equals or
exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor
will, without prior demand by the Secured Party, Transfer to the
Secured Party Eligible Credit Support in accordance with Paragraph
3(a).
(l) Addresses for Transfers.
Party A:
Cash: CITIBANK, New York
ABA No.: 021 000 089
Account No.: 4072 - 4601
Treasury Securities
and Agency Notes: Bank of New York, New York/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
ABA No.: ▇▇▇▇▇▇▇▇▇
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: ▇▇▇▇▇ Fargo Bank, N.A.
ABA No.: [121 000 248]
Account No.: [▇▇▇▇▇▇▇▇▇▇]
Account Name: SAS Clearing
FFC: [____________]
(m) Other Provisions.
(i) Notwithstanding any other provision in this Agreement to the
contrary, no full or partial failure to exercise and no delay in
exercising, on the part of Party A or Party B, any right, remedy,
power or privilege permitted hereunder shall operate in any way as a
waiver thereof by such party, including without limitation any
failure to exercise or any delay in exercising to any or to the full
extent of such party's rights with respect to transfer timing
pursuant to Paragraph 4(b), regardless of the frequency of such
failure or delay.
(ii) In all cases, in order to facilitate calculation of the Delivery
Amount and the Return Amount for a particular Valuation Date in
accordance with Paragraph 3 of this Annex:
(A) Eligible Collateral;
(B) Exposure; and
(C) Posted Collateral
shall each be expressed in US Dollars. If any of these items are
expressed in a currency other than US Dollars, then they shall be
converted into US Dollar amounts at the spot exchange rate
determined by the Valuation Agent on that Valuation Date.
(iii) Form of Annex. The parties hereby agree that the text of the body of
this Annex is intended to be the printed form of 1994 ISDA Credit
Support Annex (Bilateral Form - ISDA Agreements Subject to New York
Law Only version) as published and copyrighted by the International
Swaps and Derivatives Association, Inc.
(n) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to
this Annex, Paragraph 1(b) or Paragraph 2 or the definitions of Paragraph
12, (a) the term "Secured Party" as used in this Annex shall mean only
Party B, (b) the term "Pledgor" as used in this Annex shall mean only
Party A, (c) only Party A makes the pledge and grant in Paragraph 2, the
acknowledgement in the final sentence of Paragraph 8(a) and the
representations in paragraph 9 and (d) only Party A will be required to
make Transfers of Eligible Credit Support hereunder.
(o) Events of Default. Paragraph 7(ii) and (iii) will not apply to Party B.
(p) Expenses. For the avoidance of doubt, Party A shall be responsible for
posting collateral in accordance with this Credit Support Annex at its own
cost and any cost incurred by it in complying with its obligations
hereunder.
(q) Additional Definitions
"Agency Notes" means U.S. Dollar-denominated fixed rate, non-amortising,
non-mortgage-backed, senior debt securities of fixed maturity, rated Aaa
by ▇▇▇▇▇'▇ and AAA by S&P issued by any of the Federal Home Loan Banks
(including their consolidated obligations issued through the Office of
Finance of the Federal Home Loan Bank System), the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Federal Farm Credit Bank.
"Commercial Paper" means U.S. Dollar-denominated, coupon-bearing,
commercial paper issued by a corporation, finance company, partnership or
limited liability company.
"Treasury Securities" means U.S. Dollar-denominated, coupon-bearing,
senior debt securities of the United States of America issued by the U.S.
Treasury Department and backed by the full faith and credit of the United
States of America.
(r) Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Annex is executed by ▇▇▇▇▇
Fargo Bank, National Association (i) this Annex is executed and delivered
by ▇▇▇▇▇ Fargo Bank, National Association not in its individual capacity
but solely as Securities Administrator under the PSA in the exercise of
the powers and authority conferred and invested in it as Securities
Administrator thereunder, (ii) each of the representations, undertakings
and agreements herein made on behalf of the Trust is made and intended not
as personal representations of the Securities Administrator but is made
and intended for the purpose of binding only the Trust, and (iii) under no
circumstances shall ▇▇▇▇▇ Fargo Bank, National Association in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
under this Annex.
IN WITNESS WHEREOF, the parties have executed this Credit Support
Annex by their duly authorized officers as of the date hereof.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Date:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not individually, but solely as Securities
Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, Mortgage
Pass-Through Certificates, Series 2007-HE7
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date:
TABLE 1A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A elects to post collateral pursuant to Part 5(f)(i) of the
Schedule due to a ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the lesser of
(x) 25 multiplied by DV01 and (y) 4% multiplied by the Notional Amount * 10; or
(B) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the Notional
Amount * 10 multiplied by the amount specified in Table 1B attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 1B
Weighted Average
Life of Hedge
in Years
---------------
1 0.25%
2 0.50%
3 0.70%
4 1.00%
5 1.20%
6 1.40%
7 1.60%
8 1.80%
9 2.00%
10 2.20%
11 2.30%
12 2.50%
13 2.70%
14 2.80%
15 3.00%
16 3.20%
17 3.30%
18 3.50%
19 3.60%
20 3.70%
21 3.90%
22 4.00%
23 4.00%
24 4.00%
25 4.00%
26 4.00%
27 4.00%
28 4.00%
29 4.00%
30 4.00%
TABLE 2A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A is required to post collateral pursuant to Part 5(f)(ii) of
the Schedule due to a ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ Second Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the lesser of (x) 60 multiplied by DV01 and (y) 9% multiplied by the
Notional Amount * 10; or
(B) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the Notional Amount * 10 multiplied by the amount specified in Table 2B
attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 2B
Weighted Average
Life of Hedge
in Years
----------------
1 0.60%
2 1.20%
3 1.70%
4 2.30%
5 2.80%
6 3.30%
7 3.80%
8 4.30%
9 4.80%
10 5.30%
11 5.60%
12 6.00%
13 6.40%
14 6.80%
15 7.20%
16 7.60%
17 7.90%
18 8.30%
19 8.60%
20 9.00%
21 9.00%
22 9.00%
23 9.00%
24 9.00%
25 9.00%
26 9.00%
27 9.00%
28 9.00%
29 9.00%
30 9.00%
TABLE 3
ELIGIBLE COLLATERAL
S&P
Base
Eligible Collateral Overcollateralization Rate
------------------------------------------------- --------------------------
Cash 100%
U.S. treasuries (current coupon, constant 102%
maturity), `AAA' U.S. agencies, `AAA' covered
bonds (floating), `AAA' sovereign bonds
(floating), `AAA', `AA' credit card ABS
(floating), `AAA', `AA' auto ABS (floating), and
`AAA' U.S. student loan ABS (floating) with a
remaining maturity of less than 5 years
U.S. treasuries (current coupon, constant 108%
maturity), `AAA' U.S. agencies, `AAA' covered
bonds (floating), `AAA' sovereign bonds
(floating), `AAA', `AA' credit card ABS
(floating), `AAA', `AA' auto ABS (floating), and
`AAA' U.S. student loan ABS (floating) with a
remaining maturity of greater than or equal to 5
years and less than or equal to 10 years
`AAA' covered bonds (fixed), `AAA' sovereign bonds 105%
(fixed), `A' credit card ABS (floating), `A' auto
ABS (floating), `AAA' CMBS (floating), `AAA' CDO
(floating) `AA', `A' U.S. student loan ABS
(floating), and `AAA', `AA' corporate bonds (fixed
or floating) with a remaining maturity of less
than 5 years
`AAA' covered bonds (fixed), `AAA' sovereign bonds 115%
(fixed), `A' credit card ABS (floating), `A' auto
ABS (floating), `AAA' CMBS (floating), `AAA' CDO
(floating), `AA', `A' U.S. student loan ABS
(floating), and `AAA', `AA' U.S. and European
corporate bonds (fixed or floating) with a
remaining maturity of greater than or equal to 5
years and less than or equal to 10 years
`BBB' credit card ABS (floating), `BBB' auto ABS 125%
(floating), `AA', `A' CDO (floating), `BBB' U.S.
student loan ABS (floating), and `A' corporate
bonds (fixed or floating) with a remaining
maturity of less than 5 years
`BBB' credit card ABS (floating), `BBB' auto ABS 140%
(floating), `AA', `A' CDO (floating), `BBB' U.S.
student loan ABS (floating), and `A' corporate
bonds (fixed or floating) with a remaining
maturity of greater than or equal to 5 years and
less than or equal to 10 years
TABLE 4
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
----------------------- ------------------------
U.S. Dollar Cash 100%
EURO Cash 97%
Sterling Cash 97%
Fixed-Rate Negotiable Treasury Debt Issued by The U.S.
Treasury Department with Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate Negotiable Treasury Debt issued by The U.S.
Treasury Department
All Maturities 100%
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate U.S. Agency Debentures -
All Maturities 100%
Fixed-Rate Euro-Zone Government Bonds Rated Aa3 or Above with
Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
All Maturities 97%
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate United Kingdom Gilts
All Maturities 97%
TABLE 5
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
----------------------- ------------------------
U.S. Dollar Cash 100%
EURO Cash 93%
Sterling Cash 94%
Fixed-Rate Negotiable Treasury Debt Issued by The U.S. Treasury
Department with Remaining Maturity
< 1 Year 100%
1 to 2 Years 99%
2 to 3 Years 98%
3 to 5 Years 97%
5 to 7 Years 95%
7 to 10 Years 94%
10 to 20 Years 89%
> 20 Years 87%
Floating-Rate Negotiable Treasury Debt issued by The U.S.
Treasury Department
All Maturities 99%
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 99%
1 to 2 Years 98%
2 to 3 Years 97%
3 to 5 Years 96%
5 to 7 Years 94%
7 to 10 Years 93%
10 to 20 Years 88%
> 20 Years 86%
Floating-Rate U.S. Agency Debentures -
All Maturities 98%
Fixed-Rate Euro-Zone Government Bonds Rated Aa3 or Above
with Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 89%
5 to 7 Years 87%
7 to 10 Years 86%
10 to 20 Years 82%
> 20 Years 80%
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
All Maturities 92%
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 90%
5 to 7 Years 89%
7 to 10 Years 88%
10 to 20 Years 84%
> 20 Years 82%
Floating-Rate United Kingdom Gilts
All Maturities 93%
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
DATE: September 28, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7,
Mortgage Pass-Through Certificates, Series 2007-HE7
ATTENTION: Client Manager--MSAC 2007-HE7
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HRWYH
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ Fargo Bank, National Association, not individually, but
solely as Securities Administrator (the "Securities Administrator") under the
Pooling and Servicing Agreement, dated and effective as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Deutsche Bank National
Trust Company, as Trustee, Saxon Mortgage Services, Inc., as Servicer,
Countrywide Home Loans Servicing LP, as Servicer, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and Securities Administrator and LaSalle Bank
National Association, as Custodian (the "PSA") for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, Mortgage Pass-Through Certificates, Series
2007-HE7 ("Party B").
The definitions and provisions contained in the 2006 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of September 28, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:......................... With respect to any Calculation
Period, the notional amount set
forth for such Calculation
Period in Schedule I attached
hereto.
Trade Date:.............................. September 27, 2007
Effective Date:.......................... August 25, 2008
Termination Date:........................ April 25, 2012, which for the
purpose of the final Fixed Rate
Payer Calculation Period is
subject to No Adjustment, and
for the purpose of the final
Floating Rate Payer Calculation
Period is subject to adjustment
in accordance with the
Following Business Day
Convention.
Fixed Amounts:
Fixed Rate Payer:.................. Party B
Fixed Rate Payer Payment Dates:.... The 24th calendar day of each
month during the Term of this
Transaction, commencing
September 24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Fixed Rate Payer Period End
Dates:.......................... The 25th calendar day of each
month during the Term of this
Transaction, commencing
September 25, 2008, subject to
No Adjustment.
Fixed Rate:........................ 4.60%
Fixed Amount:...................... To be determined in accordance
with the following formula:
10 * Fixed Rate * Notional
Amount * Fixed Rate Day Count
Fraction.
Fixed Rate Day Count Fraction:..... 30/360
Floating Amounts:
Floating Rate Payer:............... Party A
Floating Rate Payer Payment
Dates:.......................... The 24th calendar day of each
month during the Term of this
Transaction, commencing
September 24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Floating Rate Payer Period End
Dates:.......................... The 25th calendar day of each
month during the Term of this
Transaction, commencing
September 25 2008, subject to
adjustment in accordance with
the Following Business Day
Convention.
Floating Rate Option:.............. USD-LIBOR-BBA
Floating Amount:................... To be determined in accordance
with the following formula:
10 * Floating Rate * Notional
Amount * Floating Rate Day
Count Fraction.
Designated Maturity:............... One month
Floating Rate Day Count Fraction:.. Actual/360
Reset Dates:....................... The first day of each
Calculation Period.
Compounding:....................... Inapplicable
Business Days:........................... New York and Los Angeles
2. Account Details and Settlement Information:
Payments to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank, National Association
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7 (swap)
3. Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Confirmation is executed by
▇▇▇▇▇ Fargo Bank, National Association (i) this Confirmation is executed
and delivered by ▇▇▇▇▇ Fargo Bank, National Association not in its
individual capacity but solely as Securities Administrator under the PSA
in the exercise of the powers and authority conferred and invested in it
as Securities Administrator thereunder, (ii) each of the representations,
undertakings and agreements herein made on behalf of Party B is made and
intended not as personal representations of the Securities Administrator
but is made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall ▇▇▇▇▇ Fargo Bank, National Association
in its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
under this Confirmation.
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but solely
as Securities Administrator for ▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, Mortgage
Pass-Through Certificates, Series 2007-HE7
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
Line Calculation Period Notional Amount ($) Multiplier
---- ---------------------------------- ------------------- ----------
1 Effective Date 9/25/2008 86,730,814.86 10
2 9/25/2008 10/25/2008 83,050,229.44 10
3 10/25/2008 11/25/2008 79,533,717.58 10
4 11/25/2008 12/25/2008 76,176,540.39 10
5 12/25/2008 1/25/2009 72,814,169.04 10
6 1/25/2009 2/25/2009 67,212,870.75 10
7 2/25/2009 3/25/2009 56,063,703.48 10
8 3/25/2009 4/25/2009 53,467,100.65 10
9 4/25/2009 5/25/2009 50,829,455.63 10
10 5/25/2009 6/25/2009 48,493,320.35 10
11 6/25/2009 7/25/2009 46,329,287.56 10
12 7/25/2009 8/25/2009 41,839,907.84 10
13 8/25/2009 9/25/2009 31,683,231.59 10
14 9/25/2009 10/25/2009 30,118,378.51 10
15 10/25/2009 11/25/2009 28,481,033.21 10
16 11/25/2009 12/25/2009 27,108,767.78 10
17 12/25/2009 1/25/2010 25,822,147.06 10
18 1/25/2010 2/25/2010 23,164,379.26 10
19 2/25/2010 3/25/2010 16,389,899.62 10
20 3/25/2010 4/25/2010 14,873,499.83 10
21 4/25/2010 5/25/2010 13,593,434.01 10
22 5/25/2010 6/25/2009 12,908,062.12 10
23 6/25/2009 7/25/2010 12,316,671.58 10
24 7/25/2010 8/25/2010 11,703,512.64 10
25 8/25/2010 9/25/2010 10,208,766.32 10
26 9/25/2010 10/25/2010 9,099,965.17 10
27 10/25/2010 11/25/2010 8,287,719.79 10
28 11/25/2010 12/25/2010 7,948,178.85 10
29 12/25/2010 1/25/2011 7,608,561.66 10
30 1/25/2011 2/25/2011 7,255,471.48 10
31 2/25/2011 3/25/2011 6,399,094.96 10
32 3/25/2011 4/25/2011 5,767,860.35 10
33 4/25/2011 5/25/2011 5,302,493.48 10
34 5/25/2011 6/25/2011 5,102,778.17 10
35 6/25/2011 7/25/2011 4,940,018.00 10
36 7/25/2011 8/25/2011 4,782,531.33 10
37 8/25/2011 9/25/2011 4,629,814.61 10
38 9/25/2011 10/25/2011 4,481,720.57 10
39 10/25/2011 11/25/2011 4,338,136.50 10
40 11/25/2011 12/25/2011 4,198,935.50 10
41 12/25/2011 1/25/2012 4,063,809.90 10
42 1/25/2012 2/25/2012 3,932,841.24 10
43 2/25/2012 3/25/2012 3,805,947.70 10
44 3/25/2012 Termination Date 3,682,984.71 10
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
September 28, 2007
Deutsche Bank National Trust Company,
not individually, but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE7, Mortgage Pass-Through Certificates, Series 2007-HE7
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
September 28, 2007 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation (hereinafter "MSCS") and Deutsche Bank National Trust Company, not
individually, but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE7, Mortgage Pass-Through Certificates, Series 2007-HE7 (hereinafter
"Counterparty") (such ISDA Master Agreement, together with each Confirmation
exchanged between the parties pursuant thereto, hereinafter the "Agreement"),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Delaware corporation (hereinafter "MS"), hereby irrevocably
and unconditionally guarantees to Counterparty, with effect from the date of the
Agreement, the due and punctual payment of all amounts payable by MSCS under the
Agreement when the same shall become due and payable, whether on Scheduled
Payment Dates, upon demand, upon declaration of termination or otherwise, in
accordance with the terms of the Agreement and giving effect to any applicable
grace period. Upon failure of MSCS punctually to pay any such amounts, and upon
written demand by Counterparty to MS at its address set forth in the signature
block of this Guarantee (or to such other address as MS may specify in writing),
MS agrees to pay or cause to be paid such amounts; provided that delay by
Counterparty in giving such demand shall in no event affect MS's obligations
under this Guarantee.
MS hereby agrees that its obligations hereunder shall be unconditional and
will not be discharged except by complete payment of the amounts payable under
the Agreement, irrespective of any claim as to the Agreement's validity,
regularity or enforceability or the lack of authority of MSCS to execute or
deliver the Agreement; or any change in or amendment to the Agreement; or any
waiver or consent by Counterparty with respect to any provisions thereof; or the
absence of any action to enforce the Agreement or the recovery of any judgment
against MSCS or of any action to enforce a judgment against MSCS under the
Agreement; or any similar circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor generally. MS hereby waives
diligence, presentment, demand on MSCS for payment or otherwise (except as
provided hereinabove), filing of claims, requirement of a prior proceeding
against MSCS and protest or notice, except as provided for in the Agreement with
respect to amounts payable by MSCS. If at any time payment under the Agreement
is rescinded or must be otherwise restored or returned by Counterparty upon the
insolvency, bankruptcy or reorganization of MSCS or MS or otherwise, MS's
obligations hereunder with respect to such payment shall be reinstated upon such
restoration or return being made by Counterparty.
MS represents to Counterparty as of the date hereof, which representations
will be deemed to be repeated by MS on each date on which a Transaction is
entered into, that:
(1) it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to execute
and deliver this Guarantee and to perform the provisions of this Guarantee on
its part to be performed;
(2) its execution, delivery and performance of this Guarantee have been and
remain duly authorized by all necessary corporate action and do not contravene
any provision of its certificate of incorporation or by-laws or any law,
regulation or contractual restriction binding on it or its assets;
(3) all consents, authorizations, approvals and clearances (including,
without limitation, any necessary exchange control approval) and notifications,
reports and registrations requisite for its due execution, delivery and
performance of this Guarantee have been obtained from or, as the case may be,
filed with the relevant governmental authorities having jurisdiction and remain
in full force and effect and all conditions thereof have been duly complied with
and no other action by, and no notice to or filing with, any governmental
authority having jurisdiction is required for such execution, delivery or
performance; and
(4) this Guarantee is its legal, valid and binding obligation enforceable
against it in accordance with its terms except as enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights or by general equity
principles.
By accepting this Guarantee and entering into the Agreement, Counterparty
agrees that MS shall be subrogated to all rights of Counterparty against MSCS in
respect of any amounts paid by MS pursuant to this Guarantee, provided that MS
shall be entitled to enforce or to receive any payment arising out of or based
upon such right of subrogation only to the extent that it has paid all amounts
payable by MSCS under the Agreement.
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York. All capitalized terms not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
SECRETARY'S CERTIFICATE
I, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a duly elected and acting Assistant Secretary of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), certify as follows:
(1) ▇▇▇▇▇ ▇. ▇▇▇▇ is the duly elected Treasurer and ▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
are duly elected Assistant Treasurers of the Corporation; and
(2) Pursuant to Section 7.01 of the Bylaws of the Corporation and
resolutions adopted by a Unanimous Consent of Directors in Lieu of a
Meeting, dated as of May 31, 1997, both of which are attached as an
exhibit, the Treasurer and the Assistant Treasurers are authorized to enter
into agreements and other instruments on behalf of the Corporation; and
(3) Pursuant to the attached Delegation of Authority executed by the
Treasurer of the Corporation as of April 18, 2006, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are each authorized to sign, on behalf of the Corporation,
any and all guarantees and loan agreements of the Corporation; and
(4) The signatures of ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ appearing on the attached signatory list are copies
of their genuine signatures.
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal of the
Corporation as of the 6th day of September, 2007.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary
[SEAL]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ EXHIBIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Section 7.01 of the Bylaws
SECTION 7.01. Contracts. Except as otherwise required by law, the Amended
and Restated Certificate of Incorporation or these Amended and Restated Bylaws,
any contracts or other instruments may be executed and delivered in the name and
on the behalf of the Corporation by such officer or officers of the Corporation
as the Board of Directors may from time to time direct. Such authority may be
general or confined to specific instances as the Board may determine. Subject to
the control and direction of the Board of Directors, the Chairman of the Board,
the President, the Chief Financial Officer, the Chief Risk Officer, the Chief
Legal Officer and the Treasurer may enter into, execute, deliver and amend
bonds, promissory notes, contracts, agreements, deeds, leases, guarantees,
loans, commitments, obligations, liabilities and other instruments to be made or
executed for or on behalf of the Corporation. Subject to any restrictions
imposed by the Board of Directors, such officers of the Corporation may delegate
such powers to others under his or her jurisdiction, it being understood,
however, that any such delegation of power shall not relieve such officer of
responsibility with respect to the exercise of such delegated power.
Resolution adopted by a Unanimous Consent
of Directors in Lieu of a Meeting, dated as of May 31, 1997
RESOLVED FURTHER, that the Treasurer shall have charge and custody of,
and be responsible for, all funds and securities of the Corporation and
shall be authorized to deposit all such funds in the name of the
Corporation in banks or other depositories. In addition, the Treasurer
shall perform all other necessary acts and duties in connection with the
financial affairs of the Corporation, shall generally perform all duties
appertaining to the office of treasurer of a corporation and shall perform
such other duties and have such other powers as may be prescribed by the
Board, subject to the supervision of the Chief Financial Officer; and
RESOLVED FURTHER, that the Assistant Treasurer, if any, or, if there
shall be more than one, the Assistant Treasurers, shall, under the
supervision of the Treasurer, perform the duties and exercise the powers of
an assistant treasurer and, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer. In addition,
each Assistant Treasurer is authorized to enter into, execute, deliver and
amend on behalf of the Corporation any and all letters of credit,
uncommitted short-term credit obligations and short-term promissory notes
(as defined by generally accepted accounting principles), such
authorization to cease automatically upon termination of employment with
the Corporation.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Delegation of Authority
-----------------------
I, ▇▇▇▇▇ ▇. ▇▇▇▇, the Treasurer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Corporation"),
hereby delegate to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, each of whom is an officer
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, the authority to sign severally, upon
approval from and under the supervision of an Assistant Treasurer of the
Corporation, any and all guarantees and loan agreements of the Corporation. Each
authorization shall cease automatically upon such individual's termination of
employment with any affiliate of the Corporation.
This Delegation supersedes all previous Delegations in connection with the
authority noted above.
IN WITNESS WHEREOF, I have hereunto set my name as of the 18th day of
April, 2006.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Specimen Signatures
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT V
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
AND VIA OVERNIGHT MAIL TO THE ADDRESS IMMEDIATELY BELOW
▇▇▇▇▇ Fargo Bank, N.A. as Securities Administrator
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Services - MSAC 2007-HE7 - SEC REPORT PROCESSING
**Additional Form [10 D] [10 K] [8 K] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section 8.12 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of September 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as depositor, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer,
securities administrator, a servicer and a custodian, Saxon Mortgage Services,
Inc., as a servicer, Countrywide Home Loans Servicing LP, as a servicer, LaSalle
Bank, National Association, as a custodian, and Deutsche Bank National Trust
Company, as trustee, the undersigned, as [_________________________] hereby
notifies you that certain events have come to our attention that we are required
to report to you for disclosure on Form [10-D] [10-K] [8-K].
Description of additional Form [10-D] [10-K] [8-K] Disclosure:
List of any attachments hereto to be included in the Additional Form [10-D]
[10-K] [8-K] Disclosure:
Each of the attachments hereto is being transmitted to the Securities
Administrator in an ▇▇▇▇▇-compatible format.
Any inquiries related to this notification should be directed to
[_________________] phone number [___________________]; email address
[______________________].
[NAME OF PARTY],
As [Role]
By:
--------------------------------------
Name:
EXHIBIT W
FORM OF SAXON SERVICER REPORTS
------------------------------------------------------------------------------------------------------------------------------------
Standard Loan Level File Layout -
Master Servicing
------------------------------------------------------------------------------------------------------------------------------------
Exhibit 1: Layout
------------------------------------------------------------------------------------------------------------------------------------
Max
Column Name Description Decimal Format Comment Size
------------------------------------------------------------------------------------------------------------------------------------
Each file requires the following fields:
------------------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a group Text up to 20 digits
of loans. 20
------------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the Text up to 10 digits
investor. 10
------------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the LOAN_NBR. 10
------------------------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled interest 2 No commas(,) or dollar signs
payment that a borrower is expected to pay, P&I ($) 11
constant.
------------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by the Servicer. 4 Max length of 6
6
------------------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the service fee 4 Max length of 6
rate as reported by the Servicer. 6
------------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as reported by 4 Max length of 6
the Servicer. 6
------------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as reported by 2 No commas(,) or dollar signs
the Servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or dollar signs
Servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6
6
------------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6
forecasted rate. 6
------------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar signs
beginning of the processing cycle. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at the end 2 No commas(,) or dollar signs
of the processing cycle. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that the MM/DD/YYYY
borrower's next payment is due to the Servicer, as 10
reported by Servicer.
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar signs
($) 11
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY
curtailment amount. 10
------------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first curtailment 2 No commas(,) or dollar signs
amount, if applicable. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar signs
($) 11
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY
curtailment amount. 10
------------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second curtailment 2 No commas(,) or dollar signs
amount, if applicable. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs
($) 11
------------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY
curtailment amount. 10
------------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third curtailment 2 No commas(,) or dollar signs
amount, if applicable. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported by the 2 No commas(,) or dollar signs
Servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the Servicer. MM/DD/YYYY 10
------------------------------------------------------------------------------------------------------------------------------------
Action Code Key:
ACTION_CODE The standard FNMA numeric code used to indicate 15=Bankruptcy, 2
the default/delinquent status of a particular 30=Foreclosure, , 60=PIF,
loan. 63=Substitution,
65=Repurchase,70=REO
------------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as reported 2 No commas(,) or dollar signs
by the Servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs
applicable. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar signs
($) 11
------------------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or dollar signs
applicable. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
Plus the following applicable fields:
------------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due at 2 No commas(,) or dollar signs
the beginning of the cycle date to be passed ($) 11
through to investors.
------------------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to investors 2 No commas(,) or dollar signs
at the end of a processing cycle. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported by the 2 No commas(,) or dollar signs
Servicer for the current cycle -- only applicable ($) 11
for Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or dollar signs
service fee amount for the current cycle as ($) 11
reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or dollar signs
Servicer for the current reporting cycle -- only ($) 11
applicable for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the service 2 No commas(,) or dollar signs
fee amount for the current reporting cycle as ($) 11
reported by the Servicer -- only applicable for
Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs
prepays on his loan as reported by the Servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan waived 2 No commas(,) or dollar signs
by the servicer. ($) 11
------------------------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the Modification for MM/DD/YYYY
the loan. 10
------------------------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha
or numeric 30
------------------------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or dollar signs
advances made by Servicer. ($) 11
Flag to indicate if the repurchase of a loan is due Y=Breach
------------------------------------------------------------------------------------------------------------------------------------
BREACH_FLAG to a breach of Representations and Warranties N=NO Breach 1
Let blank if N/A
------------------------------------------------------------------------------------------------------------------------------------
Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT
For Month Ended: mm/dd/yyyy Servicer Name ___________________
Prepared by: ____________________ Investor Nbr ____________________
--------------------------------------------------------------------------------
Section 1. Remittances and Ending Balances - Required Data
--------------------------------------------------------------------------------
Beginning Ending Total Monthly Total Ending Unpaid Total Monthly
Loan Count Loan Count Remittance Amount Principal Balance Principal Balance
--------------------------------------------------------------------------------
0 0 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------
Principal Calculation
---------------------
1. Monthly Principal Due + $0.00
-------
2. Current Curtailments + $0.00
-------
3. Liquidations + $0.00
-------
4. Other (attach explanation) + $0.00
-------
5. Principal Due $0.00
-------
6. Interest (reported "gross") + $0.00
-------
7. Interest Adjustments on Curtailments + $0.00
-------
8. Servicing Fees - $0.00
-------
9. Other Interest (attach explanation) + $0.00
-------
10. Interest Due (need to subtract ser fee) $0.00
-------
Remittance Calculation
----------------------
11. Total Principal and Interest Due (lines 5+10) + $0.00
-------
12. Reimbursement of Non-Recoverable Advances - $0.00
-------
13. Total Realized gains + $0.00
-------
14. Total Realized Losses - $0.00
-------
15. Total Prepayment Penalties + $0.00
-------
16. Total Non-Supported Compensating Interest - $0.00
-------
17. Other (attach explanation) $0.00
-------
18. Net Funds Due on or before Remittance Date $ $0.00
-------
--------------------------------------------------------------------------------
Section 2. Delinquency Report - Optional Data for Loan Accounting
--------------------------------------------------------------------------------
Installments Delinquent
--------------------------------------------------------------------------------
Total No. Total No. 90 or In Real Estate Total Dollar
of of 30- 60- more Foreclosure Owned Amount of
Loans Delinquencies Days Days Days (Optional) (Optional) Delinquencies
--------------------------------------------------------------------------------
0 0 0 0 0 0 0 $0.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Section 3. REG AB Summary Reporting - REPORT ALL APPLICABLE FIELDS
--------------------------------------------------------------------------------
REG ▇▇ ▇▇▇▇▇▇ LOAN COUNT BALANCE
--------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT 0 $0.00
--------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
--------------------------------------------------------------------------------
DELINQUENCY P&I AMOUNT 0 $0.00
--------------------------------------------------------------------------------
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance
report date. Late submissions may result in claims not being passed until
the following month. The Servicer is responsible to remit all funds
pending loss approval and /or resolution of any disputed items.
(b)
(c) The numbers on the 332 form correspond with the numbers listed
below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to
default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance
forward)
* Other expenses - copies of corporate advance history showing
all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
(d) Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332
form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
--------------------- --------------------- ---------------------
Servicer Loan No. Servicer Name Servicer Address
--------------------- --------------------- ---------------------
▇▇▇▇▇ FARGO BANK, N.A. Loan No._____________________________
Borrower's Name:______________________________________________________
Property Address:_____________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount __________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ________ (1)
(2) Interest accrued at Net Rate _________ (2)
(3) Accrued Servicing Fees _________ (3)
(4) Attorney's Fees _________ (4)
(5) Taxes (see page 2) _________ (5)
(6) Property Maintenance _________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) _________ (7)
(8) Utility Expenses _________ (8)
(9) Appraisal/BPO _________ (9)
(10) Property Inspections _________ (10)
(11) FC Costs/Other Legal Expenses _________ (11)
(12) Other (itemize) _________ (12)
Cash for Keys__________________________ _________ (12)
HOA/Condo Fees_______________________ _________ (12)
______________________________________ _________ (12)
Total Expenses $ ________ (13)
Credits:
(14) Escrow Balance $ ________ (14)
(15) HIP Refund __________ (15)
(16) Rental Receipts __________ (16)
(17) Hazard Loss Proceeds __________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance __________ (18a)
HUD Part A
__________ (18b)
HUD Part B
(19) Pool Insurance Proceeds __________ (19)
(20) Proceeds from Sale of Acquired Property __________ (20)
(21) Other (itemize) __________ (21)
_________________________________________ __________ (21)
Total Credits $_________ (22)
Total Realized Loss (or Amount of Gain) $_________ (23)
Escrow Disbursement Detail
--------------------------------------------------------------------------------
Type Date Paid Period of Total Paid Base Penalties Interest
(Tax /Ins.) Coverage Amount
--------------------------------------------------------------------------------
EXHIBIT X
FORM OF COUNTRYWIDE SERVICING SERVICER REPORTS
Standard File Layout - Scheduled/Scheduled
------------------------------------------------------------------------------------------------------------------
Column Name Description Decimal Format Comment
------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 10 digits
define a group of loans.
------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each Text up to 10 digits
loan by the investor.
------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by Text up to 10 digits
the Servicer. This may be different
than the LOAN_NBR.
------------------------------------------------------------------------------------------------------------------
BORROWER_NAME The borrower name as received in the Maximum length of 30 (Last, First)
file. It is not separated by first
and last name.
------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and 2 No commas(,) or dollar signs ($)
scheduled interest payment that a
borrower is expected to pay, P&I
constant.
------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by 4 Max length of 6
the Servicer.
------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the 4 Max length of 6
service fee rate as reported by the
Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan 2 No commas(,) or dollar signs ($)
as reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6
Servicer.
------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6
calculate a forecasted rate.
------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the beginning of the
processing cycle.
------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the end of the processing
cycle.
------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing MM/DD/YYYY
cycle that the borrower's next
payment is due to the Servicer, as
reported by Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be 2 No commas(,) or dollar signs ($)
applied.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with MM/DD/YYYY
the first curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar signs ($)
applied.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with MM/DD/YYYY
the second curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the 2 No commas(,) or dollar signs ($)
second curtailment amount, if
applicable.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be 2 No commas(,) or dollar signs ($)
applied.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with MM/DD/YYYY
the third curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by MM/DD/YYYY
the Servicer.
------------------------------------------------------------------------------------------------------------------
Action Code Key: 15=Bankruptcy,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, , ▇▇▇▇▇▇,
63=Substitution, 65=Repurchase,70=REO
------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used
to indicate the default/delinquent
status of a particular loan.
------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment 2 No commas(,) or dollar signs ($)
as reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment 2 No commas(,) or dollar signs ($)
amount, if applicable.
------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($)
applicable.
------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as 2 No commas(,) or dollar signs ($)
a loss, if applicable.
------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or dollar signs ($)
amount due at the beginning of the
cycle date to be passed through to
investors.
------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due 2 No commas(,) or dollar signs ($)
to investors at the end of a
processing cycle.
------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer for the
current cycle -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount 2 No commas(,) or dollar signs ($)
less the service fee amount for the
current cycle as reported by the
Servicer -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected 2 No commas(,) or dollar signs ($)
by the Servicer for the current
reporting cycle -- only applicable
for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less 2 No commas(,) or dollar signs ($)
the service fee amount for the
current reporting cycle as reported
by the Servicer -- only applicable
for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a 2 No commas(,) or dollar signs ($)
borrower prepays on his loan as
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the 2 No commas(,) or dollar signs ($)
loan waived by the servicer.
------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan.
------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha or numeric
------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar signs ($)
interest advances made by Servicer.
------------------------------------------------------------------------------------------------------------------
EXHIBIT Y
FORM OF ▇▇▇▇▇ FARGO SERVICER REPORTS
Standard Loan Level File Layout - Master Servicing
------------------------------------------------------------------------------------------------------------------
Exhibit 1: Layout
------------------------------------------------------------------------------------------------------------------
Max
Column Name Description Decimal Format Comment Size
------------------------------------------------------------------------------------------------------------------
Each file requires the following fields:
------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 20 digits
define a group of loans. 20
------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan Text up to 10 digits
by the investor. 10
------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the 10
LOAN_NBR.
------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar
interest payment that a borrower is signs ($) 11
expected to pay, P&I constant.
------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6
Servicer. 6
------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the 4 Max length of 6
service fee rate as reported by the 6
Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6
reported by the Servicer. 6
------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or dollar
reported by the Servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported 2 No commas(,) or dollar
by the Servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6
Servicer. 6
------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6
calculate a forecasted rate. 6
------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance 2 No commas(,) or dollar
at the beginning of the processing cycle. signs ($) 11
------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance 2 No commas(,) or dollar
at the end of the processing cycle. signs ($) 11
------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle MM/DD/YYYY
that the borrower's next payment is due 10
to the Servicer, as reported by Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be 2 No commas(,) or dollar
applied. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the MM/DD/YYYY
first curtailment amount. 10
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar
curtailment amount, if applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar
applied. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the MM/DD/YYYY
second curtailment amount. 10
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar
curtailment amount, if applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be 2 No commas(,) or dollar
applied. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the MM/DD/YYYY
third curtailment amount. 10
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar
curtailment amount, if applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or dollar
reported by the Servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer. 10
------------------------------------------------------------------------------------------------------------------
Action Code Key:
ACTION_CODE The standard FNMA numeric code used to 15=Bankruptcy, 2
indicate the default/delinquent status of 30=Foreclosure, ,
a particular loan. 60=PIF,
63=Substitution,
65=Repurchase,70=REO
------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar
reported by the Servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, 2 No commas(,) or dollar
if applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar
applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a 2 No commas(,) or dollar
loss, if applicable. signs ($) 11
------------------------------------------------------------------------------------------------------------------
Plus the following applicable fields:
------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or dollar
amount due at the beginning of the cycle signs ($) 11
date to be passed through to investors.
------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar
investors at the end of a processing signs ($) 11
cycle.
------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as 2 No commas(,) or dollar
reported by the Servicer for the current signs ($) 11
cycle -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less 2 No commas(,) or dollar
the service fee amount for the current signs ($) 11
cycle as reported by the Servicer -- only
applicable for Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by 2 No commas(,) or dollar
the Servicer for the current reporting signs ($) 11
cycle -- only applicable for
Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or dollar
service fee amount for the current signs ($) 11
reporting cycle as reported by the
Servicer -- only applicable for
Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a 2 No commas(,) or dollar
borrower prepays on his loan as reported signs ($) 11
by the Servicer.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the 2 No commas(,) or dollar
loan waived by the servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan. 10
------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be
alpha or numeric 30
------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar
interest advances made by Servicer. signs ($) 11
------------------------------------------------------------------------------------------------------------------
BREACH_FLAG Flag to indicate if the repurchase of a Y=Breach
loan is due to a breach of N=NO Breach 1
Representations and Warranties Let blank if N/A
------------------------------------------------------------------------------------------------------------------
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance
report date. Late submissions may result in claims not being passed until
the following month. The Servicer is responsible to remit all funds
pending loss approval and /or resolution of any disputed items.
(e)
(f) The numbers on the 332 form correspond with the numbers
listed below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax, interest,
penalty. Advances prior to default require evidence of servicer
efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing
all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Servicing Officer certification
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
(g) Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney Letter of Proceeds
Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332
form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental
proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
--------------------- --------------------- ---------------------
Servicer Loan No. Servicer Name Servicer Address
--------------------- --------------------- ---------------------
▇▇▇▇▇ FARGO BANK, N.A. Loan No._____________________________
Borrower's Name:______________________________________________________
Property Address:_____________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount __________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ________ (1)
(2) Interest accrued at Net Rate _________ (2)
(3) Accrued Servicing Fees _________ (3)
(4) Attorney's Fees _________ (4)
(5) Taxes (see page 2) _________ (5)
(6) Property Maintenance _________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) _________ (7)
(8) Utility Expenses _________ (8)
(9) Appraisal/BPO _________ (9)
(10) Property Inspections _________ (10)
(11) FC Costs/Other Legal Expenses _________ (11)
(12) Other (itemize) _________ (12)
Cash for Keys__________________________ _________ (12)
HOA/Condo Fees_______________________ _________ (12)
______________________________________ _________ (12)
Total Expenses $ ________ (13)
Credits:
(14) Escrow Balance $ ________ (14)
(15) HIP Refund __________ (15)
(16) Rental Receipts __________ (16)
(17) Hazard Loss Proceeds __________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance __________ (18a)
HUD Part A
__________ (18b)
HUD Part B
(19) Pool Insurance Proceeds __________ (19)
(20) Proceeds from Sale of Acquired Property __________ (20)
(21) Other (itemize) __________ (21)
_________________________________________ __________ (21)
Total Credits $_________ (22)
Total Realized Loss (or Amount of Gain) $_________ (23)
Escrow Disbursement Detail
--------------------------------------------------------------------------------
Type Date Paid Period of Total Paid Base Penalties Interest
(Tax /Ins.) Coverage Amount
--------------------------------------------------------------------------------
EXHIBIT Z
Saxon Standard File Layout - Delinquency Reporting
---------------------------------------------------------------------------------------------------------------------
Column/Header Name Description Decimal Format Comment
---------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
---------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the
originator.
---------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
---------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned by an external
servicer to identify a group of loans in their system.
---------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
---------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
---------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
---------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
---------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
---------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as reported by
Servicer.
---------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
---------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
---------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy
filing.
---------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
---------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
Dismissal, Discharged and/or a Motion For Relief Was
Granted.
---------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
---------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
---------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
---------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
---------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
---------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the MM/DD/YYYY
property from the borrower.
---------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
---------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
---------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
---------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
---------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
---------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
---------------------------------------------------------------------------------------------------------------------
If applicable:
---------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
---------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying
on a loan. Code indicates the reason why the loan is
in default for this cycle.
---------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
---------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The MM/DD/YYYY
Pool Insurer
---------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
FRCLSR_BID_AMT The foreclosure sale bid amount No commas(,) or
11 dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party,
Conveyance to HUD/VA
---------------------------------------------------------------------------------------------------------------------
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,) or
dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
BPO_DATE The date the BPO was done.
---------------------------------------------------------------------------------------------------------------------
CURRENT_FICO The current FICO score
---------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the 10 MM/DD/YYYY
Hazard Insurance Company.
---------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. No commas(,) or
11 dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the
claim payment. 10 MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company No commas(,) or
paid on the claim. 11 dollar signs ($)
---------------------------------------------------------------------------------------------------------------------
ACTION_CODE Indicates loan status Number
---------------------------------------------------------------------------------------------------------------------
NOD_DATE MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
NOI_DATE MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_ PLAN_END_DATE
---------------------------------------------------------------------------------------------------------------------
ACTUAL_REO_START_DATE MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------
REO_SALES_PRICE Number
---------------------------------------------------------------------------------------------------------------------
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
---------------------------------------------------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: ▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply ▇▇▇▇▇
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
Delinquency Code Delinquency Description
---------------- -----------------------------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
Status Code Status Description
----------- ------------------------------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
EXHIBIT ▇▇
▇▇▇▇▇ Fargo Standard File Layout - Delinquency Reporting
Exhibit : Standard File Layout - Delinquency Reporting
*The column/header names in bold are the minimum fields ▇▇▇▇▇ Fargo must receive
from every Servicer
------------------------------------------------------------------------------------------------
Column/Header Name Description Decimal Format Comment
------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan
by the Servicer. This may be
different than the LOAN_NBR
------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each
loan by the originator.
------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned
by an external servicer to identify
a group of loans in their system.
------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
------------------------------------------------------------------------------------------------
PROP_STATE The state where the property
located.
------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is
located.
------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next MM/DD/YYYY
payment is due to the servicer at
the end of processing cycle, as
reported by Servicer.
------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy MM/DD/YYYY
claim was filed.
------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the
bankruptcy was filed.
------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the
court to the bankruptcy filing.
------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the MM/DD/YYYY
bankruptcy has been approved by the
courts
------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From MM/DD/YYYY
Bankruptcy. Either by Dismissal,
Discharged and/or a Motion For
Relief Was Granted.
------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was MM/DD/YYYY
Approved By The Servicer
------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved
For A Loan Such As;
------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan MM/DD/YYYY
Is Scheduled To End/Close
------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is MM/DD/YYYY
Actually Completed
------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to MM/DD/YYYY
the servicer with instructions to
begin foreclosure proceedings.
------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney MM/DD/YYYY
to Pursue Foreclosure
------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an MM/DD/YYYY
Attorney in a Foreclosure Action
------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale MM/DD/YYYY
is expected to occur.
------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure MM/DD/YYYY
sale.
------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at 2 No commas(,) or
the foreclosure sale. dollar signs ($)
------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates MM/DD/YYYY
eviction of the borrower.
------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal MM/DD/YYYY
possession of the property from the
borrower.
------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property 2 No commas(,) or
is marketed. dollar signs ($)
------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed MM/DD/YYYY
at a particular price.
------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an 2 No commas(,) or
REO property. dollar signs ($)
------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA MM/DD/YYYY
Admin or by the Servicer.
------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the MM/DD/YYYY
property is scheduled to close.
------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property
is occupied.
------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition
of the property.
------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is MM/DD/YYYY
performed.
------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the 2
property based on brokers price
opinion or appraisal.
------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be 2
worth if repairs are completed
pursuant to a broker's price opinion
or appraisal.
------------------------------------------------------------------------------------------------
If applicable:
------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a
borrower to stop paying on a loan.
Code indicates the reason why the
loan is in default for this cycle.
------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was MM/DD/YYYY
Filed With Mortgage Insurance
Company.
------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim No commas(,) or
Filed dollar signs ($)
------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company MM/DD/YYYY
Disbursed Claim Payment
------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company 2 No commas(,) or
Paid On Claim dollar signs ($)
------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool MM/DD/YYYY
Insurance Company
------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool 2 No commas(,) or
Insurance Company dollar signs ($)
------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check MM/DD/YYYY
Was Issued By The Pool Insurer
------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool 2 No commas(,) or
Insurance Company dollar signs ($)
------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed MM/DD/YYYY
With HUD
------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim MM/DD/YYYY
Payment
------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,) or
dollar signs ($)
------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed MM/DD/YYYY
With HUD
------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim MM/DD/YYYY
Payment
------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,) or
dollar signs ($)
------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the MM/DD/YYYY
Veterans Admin
------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA MM/DD/YYYY
Claim Payment
------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA 2 No commas(,) or
Claim dollar signs ($)
------------------------------------------------------------------------------------------------
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was MM/DD/YYYY
filed 10
------------------------------------------------------------------------------------------------
FRCLSR_BID_AMT The foreclosure sale bid amount No commas(,) or
11 dollar signs ($)
------------------------------------------------------------------------------------------------
FRCLSR_SALE_TYPE The foreclosure sales results: REO,
Third Party, Conveyance to HUD/VA
------------------------------------------------------------------------------------------------
REO_PROCEEDS The net proceeds from the sale of No commas(,) or
the REO property. dollar signs ($)
------------------------------------------------------------------------------------------------
BPO_DATE The date the BPO was done.
------------------------------------------------------------------------------------------------
CURRENT_FICO The current FICO score
------------------------------------------------------------------------------------------------
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed MM/DD/YYYY
with the Hazard Insurance Company. 10
------------------------------------------------------------------------------------------------
HAZARD_CLAIM_AMT The amount of the Hazard Insurance No commas(,) or
Claim filed. 11 dollar signs ($)
------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance MM/DD/YYYY
Company disbursed the claim payment. 10
------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance No commas(,) or
Company paid on the claim. 11 dollar signs ($)
------------------------------------------------------------------------------------------------
ACTION_CODE Indicates loan status Number
------------------------------------------------------------------------------------------------
NOD_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------
NOI_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_ PLAN_END_DATE
------------------------------------------------------------------------------------------------
ACTUAL_REO_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------
REO_SALES_PRICE Number
------------------------------------------------------------------------------------------------
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
------------------------------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: ▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply ▇▇▇▇▇
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
Delinquency Code Delinquency Description
---------------- -----------------------------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
Status Code Status Description
----------- ------------------------------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
EXHIBIT BB
COUNTRYWIDE SERVICING STANDARD FILE LAYOUT - DELINQUENCY REPORTING
REPORTING DATA FOR DEFAULTED LOANS
Data must be submitted to ▇▇▇▇▇ Fargo Bank in an Excel spreadsheet format with
fixed field names and data type. The Excel spreadsheet should be used as a
template consistently every month when submitting data.
Table: Delinquency
Name Type Size
-----------------------------------------------------------------------
Servicer Loan # Number 8
(Double)
Investor Loan # Number 8
(Double)
Borrower Name Text 20
Address Text 30
State Text 2
Due Date Date/Time 8
Action Code Text 2
FC Received Date/Time 8
File Referred to Atty Date/Time 8
NOD Date/Time 8
Complaint Filed Date/Time 8
Sale Published Date/Time 8
Target Sale Date Date/Time 8
Actual Sale Date Date/Time 8
Loss Mit Approval Date Date/Time 8
Loss Mit Type Text 5
Loss Mit Estimated Completion Date/Time 8
Date
Loss Mit Actual Completion Date Date/Time 8
Loss Mit Broken Plan Date Date/Time 8
BK Chapter Text 6
BK Filed Date Date/Time 8
Post Petition Due Date/Time 8
Motion for Relief Date/Time 8
Lift of Stay Date/Time 8
RFD Text 10
Occupant Code Text 10
Eviction Start Date Date/Time 8
Eviction Completed Date Date/Time 8
List Price Currency 8
List Date Date/Time 8
Accepted Offer Price Currency 8
Accepted Offer Date Date/Time 8
Estimated REO Closing Date Date/Time 8
Actual REO Sale Date Date/Time 8
o Items in bold are MANDATORY FIELDS. We must receive information in those
fields every month in order for your file to be accepted.
The Action Code Field should show the applicable numeric code to indicate that a
special action is being taken. The Action Codes are the following:
12-Relief Provisions
15-Bankruptcy/Litigation
20-Referred for Deed-in-Lieu
30-Referred fore Foreclosure
▇▇-▇▇▇▇▇▇
▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇-▇▇▇▇ for Sale
71-Third Party Sale/Condemnation
72-REO-Pending Conveyance-Pool Insurance claim filed
▇▇▇▇▇ Fargo Bank will accept alternative Action Codes to those above, provided
that the Codes are consistent with industry standards. If Action Codes other
than those above are used, the Servicer must supply ▇▇▇▇▇ Fargo Bank with a
description of each of the Action Codes prior to sending the file.
Description of Action Codes:
Action Code 12 - To report a Mortgage Loan for which the Borrower has been
granted relief for curing a delinquency. The Action Date is the date the relief
is expected to end. For military indulgence, it will be three months after the
Borrower's discharge from military service.
Action Code 15 - To report the Borrower's filing for bankruptcy or instituting
some other type of litigation that will prevent or delay liquidation of the
Mortgage Loan. The Action Date will be either the date that any repayment plan
(or forbearance) instituted by the bankruptcy court will expire or an additional
date by which the litigation should be resolved.
Action Code 20 - To report that the Borrower has agreed to a deed-in-lieu or an
assignment of the property. The Action Date is the date the Servicer decided to
pursue a deed-in-lieu or the assignment.
Action Code 30 - To report that the decision has been made to foreclose the
Mortgage Loan. The Action Date is the date the Servicer referred the case to the
foreclosure attorney.
Action Code 60 - To report that a Mortgage Loan has been paid in full either at,
or prior to, maturity. The Action Date is the date the pay-off funds were
remitted to the Master Servicer.
Action Code 65 - To report that the Servicer is repurchasing the Mortgage Loan.
The Action Date is the date the repurchase proceeds were remitted to the Master
Servicer.
Action Code 70 - To report that a Mortgage Loan has been foreclosed or a
deed-in-lieu of foreclosure has been accepted, and the Servicer, on behalf of
the owner of the Mortgage Loan, has acquired the property and may dispose of it.
The Action Date is the date of the foreclosure sale or, for deeds-in-lieu, the
date the deed is recorded on behalf of the owner of the Mortgage Loan.
Action Code 71 - To report that a Mortgage Loan has been foreclosed and a third
party acquired the property, or a total condemnation of the property has
occurred. The Action Date is the date of the foreclosure sale or the date the
condemnation award was received.
Action Code 72 - To report that a Mortgage Loan has been foreclosed, or a
deed-in-lieu has been accepted, and the property may be conveyed to the mortgage
insurer and the pool insurance claim has been filed. The Action Date is the date
of the foreclosure sale, or, for deeds-in-lieu, the date of the deed for
conventional mortgages.
The Loss Mit Type field should show the approved Loss Mitigation arrangement.
The following are acceptable:
ASUM-Approved Assumption
BAP-Borrower Assistance Program
CO-Charge Off
DIL-Deed-in-Lieu
FFA-Formal Forbearance Agreement
MOD-Loan Modification
PRE-Pre-Sale
SS-Short Sale
MISC-Anything else approved by the PMI or Pool Insurer
▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply ▇▇▇▇▇ Fargo Bank
with a description of each of the Loss Mitigation Types prior to sending the
file.
The Occupant Code field should show the current status of the property. The
acceptable codes are:
Mortgagor
Tenant
Unknown
Vacant
REALIZED LOSS CALCULATION INFORMATION
▇▇▇▇▇ FARGO BANK, N.A. Form 332
Calculation of Realized Loss
Purpose
To provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Mortgage Loan having been foreclosed and Liquidated.
Distribution
The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation to
the Master Servicer with the Monthly Accounting Reports which supports the
Mortgage Loan's removal from the Mortgage Loan Activity Report. The Servicer
will retain the duplicate for its own records.
Due Date
With respect to any liquidated Mortgage Loan, the form will be submitted to the
Master Servicer no later than the date on which statements are due to the Master
Servicer under Section 4.02 of this Agreement (the "Statement Date") in the
month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation Instructions
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as
agreed.
3-7. Complete as necessary. All line entries must be supported by copies of
appropriate statements, vouchers, receipts, canceled checks, etc., to
document the expense. Entries not properly documented will not be
reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis.
10. The total of lines 1 through 9.
Credits
11-17. Complete as necessary. All line entries must be supported by copies of
the appropriate claims forms, statements, payment checks, etc. to
document the credit. If the Mortgage Loan is subject to a Bankruptcy
Deficiency, the difference between the Unpaid Principal Balance of the
Note prior to the Bankruptcy Deficiency and the Unpaid Principal Balance
as reduced by the Bankruptcy Deficiency should be input on line 16.
18. The total of lines 11 through 17.
Total Realized Loss (or Amount of Any Gain)
19. The total derived from subtracting line 18 from 10. If the amount
represents a realized gain, show the amount in parenthesis ( ).
▇▇▇▇▇ FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS
▇▇▇▇▇ FARGO BANK, N.A. Trust: ___________________________
Prepared by: __________________ Date: _______________
Phone: ______________________
Servicer Loan No. Servicer Name Servicer Address
▇▇▇▇▇ FARGO BANK, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage $ _______________(1)
Loan
Interest accrued at Net Rate _________________(2)
Attorney's Fees _________________(3)
Taxes _________________(4)
Property Maintenance _________________(5)
MI/Hazard Insurance Premiums _________________(6)
Hazard Loss Expenses _________________(7)
Accrued Servicing Fees _________________(8)
Other (itemize) _________________(9)
$ __________________
Total Expenses $ ______________(10)
Credits:
Escrow Balance $ ______________(11)
HIP Refund ________________(12)
Rental Receipts ________________(13)
Hazard Loss Proceeds ________________(14)
Primary Mortgage Insurance Proceeds ________________(15)
Proceeds from Sale of Acquired Property ________________(16)
Other (itemize) ________________(17)
___________________
___________________
Total Credits $________________(18)
Total Realized Loss (or Amount of Gain) $________________
EXHIBIT CC
COUNTRYWIDE AMENDMENT REGULATION AB
Capitalized terms used in this Exhibit CC but not defined in this
Exhibit CC shall have the meanings given to such terms in this Agreement, except
the term "Mortgage Loan" shall mean the "Countrywide Serviced Mortgage Loans" as
defined in this Agreement.
AMENDMENT REG AB
TO THE MORTGAGE LOAN SALE AND SERVICING AGREEMENT
This is Amendment Reg AB ("Amendment Reg AB"), dated as of January 26, 2006, by
and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the "Purchaser"), Countrywide
Home Loans, Inc. (the "Seller") and Countrywide Home Loans Servicing LP (the
"Servicer", and collectively with the Seller, the "Company") to (i) that certain
Second Amended and Restated Mortgage Sale and Servicing Agreement, dated as of
September 1, 2005, by and among the Seller, the Servicer and the Purchaser, and
(ii) that certain Mortgage Sale and Servicing Agreement, dated as of October 1,
2005, by and among the Seller, the Servicer and the Purchaser (collectively, as
amended, modified or supplemented, the "Existing Agreements").
W I T N E S S E T H
WHEREAS, the Company and the Purchaser have agreed, subject to the
terms and conditions of this Amendment Reg AB that the Existing Agreements be
amended to reflect agreed upon revisions to the terms of the Existing Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that each Existing Agreement is hereby amended as follows:
1. Capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Existing Agreements. Each Existing Agreement
is hereby amended by adding the following definitions in their proper
alphabetical order:
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were either (x) originated pursuant to an agreement between the
Company and such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines or (y)
individually re-underwritten by the Company to the Designated Guidelines at the
time such Mortgage Loans were acquired by the Company; (ii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iii) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that either Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Company or the Mortgage Loans purchased by the Company substantially
comply with the Designated Guidelines.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: An agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced under
the Agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction subject to Regulation AB
involving either (1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity in connection with an issuance
of publicly offered, rated mortgage-backed securities or (2) an issuance of
publicly offered, rated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Servicer: As defined in Section 2(c)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged at the request
of a Depositor, Purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
2. The Purchaser and the Company agree that each Existing Agreement is
hereby amended by adding the following provisions:
(a) Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose of
Article 2 of this Agreement is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Neither the Purchaser nor any Depositor shall exercise its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, and agrees to negotiate in
good faith with the Purchaser or any Depositor with regard to any reasonable
requests for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary to permit the Purchaser or such Depositor to comply with
the provisions of Regulation AB, together with such disclosures relating to the
Company, and any parties or items identified in writing by the Purchaser,
including, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans necessary in order to effect such
compliance.
The Purchaser agrees that it will cooperate with the Company and
provide sufficient and timely notice of any information requirements pertaining
to a Securitization Transaction. The Purchaser will make all reasonable efforts
to contain requests for information, reports or any other materials to items
required for compliance with Regulation AB, and shall not request information
which is not required for such compliance.
(b) Additional Representations and Warranties of the Company.
(i) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 2(c) that,
except as disclosed in writing to the Purchaser or such Depositor prior
to such date: (i) the Company is not aware and has not received notice
that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or
failure to act of the Company; (ii) the Company has not been terminated
as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential
mortgage loans involving the Company as servicer has been disclosed or
reported by the Company; (iv) no material changes to the Company's
policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred
during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Company's
financial condition that could have a material adverse effect on the
performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material
legal or governmental proceedings pending (or known to be contemplated)
against the Company, any Subservicer or any Third-Party Originator; and
(vii) there are no affiliations, relationships or transactions relating
to the Company, any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(ii) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided to the
Purchaser or any Depositor under Section 2(c), the Company shall,
within ten Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph
(i) of this Section or, if any such representation and warranty is not
accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
(c) Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall (1)
within ten Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing reasonably
required for compliance with Regulation AB, the information and materials
specified in paragraphs (i), (ii), (iii) and (vi) of this Section 2(c), and (2)
as promptly as practicable following notice to or discovery by the Company,
provide to the Purchaser and any Depositor (as required by Regulation AB) the
information specified in paragraph (iv) of this Section.
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), or (y) as
applicable, each Third-Party Originator, and (z) as applicable, each
Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105 (subject to paragraph (b) below), 1110, 1117 and 1119
of Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) to the extent material, a description of the
originator's origination program and how long the originator
has been engaged in originating residential mortgage loans,
which description shall include a discussion of the
originator's experience in originating mortgage loans of a
similar type as the Mortgage Loans; if material, information
regarding the size and composition of the originator's
origination portfolio; and information that may be material to
an analysis of the performance of the Mortgage Loans,
including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage
Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a brief description of any material legal or
governmental proceedings pending (or known to be contemplated
by a governmental authority) against the Company, each
Third-Party Originator, if applicable, and each Subservicer;
and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, if
applicable, each Subservicer and any of the following parties
to a Securitization Transaction, as such parties are
identified to the Company by the Purchaser or any Depositor in
writing within ten days in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support
provider; and
(9) any other material transaction
party.
(ii) If so requested by the Purchaser or any Depositor, and if
required by Regulation AB, the Company shall provide (or, as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as
provided below) originated by (a) the Company, if the Company is an
originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), and/or (b) as
applicable, each Third-Party Originator. Such Static Pool Information
shall be prepared by the Company (or, if applicable, the Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent that there is reasonably available to the Company (or
Third-Party Originator, as applicable) Static Pool Information with
respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content
of such Static Pool Information may be in the form customarily provided
by the Company, and need not be customized for the Purchaser or any
Depositor. Such Static Pool Information for each vintage origination
year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the
mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a
date no later than 135 days prior to the date of the prospectus or
other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information
shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format
(pdf) file, or other such electronic format mutually agreed upon by the
Purchaser and the Company.
Promptly following notice or discovery of a material error (as
determined in the judgment of the Company) in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static
Pool Information to the Purchaser or any Depositor, as applicable, in
the same format in which Static Pool Information was previously
provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to
this Agreement), agreed-upon procedures letters of certified public
accountants pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1,
2006 or, in the case of Static Pool Information with respect to the
Company's or, if applicable, Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such statements
and letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate, which shall
be limited to any Sponsor, any Depositor, any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction or any other party that is reasonably and
customarily entitled to receive such statements and letters in a
Securitization Transaction. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a
reliance letter authorizing reliance by the addressees designated by
the Purchaser or such Depositor.
(iii) If reasonably requested by the Purchaser or any
Depositor, the Company shall provide such information regarding the
Company, as servicer of the Mortgage Loans, and each Subservicer (each
of the Company and each Subservicer, for purposes of this paragraph, a
"Servicer"), as is reasonably requested for the purpose of compliance
with Items 1108 of Regulation AB. Such information shall include, at a
minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of
the Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Servicer's
experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution
Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage
loans of a type similar to the Mortgage Loans and information
on factors related to the Servicer that may be material, in
the reasonable determination of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of servicing
during the three-year period immediately preceding
the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous
disclosure of material noncompliance with the
applicable servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been terminated
as servicer in a residential mortgage loan
securitization, either due to a servicing default or
to application of a servicing performance test or
trigger; and
(5) such other information as the Purchaser
or any Depositor may reasonably request for the
purpose of compliance with Item 1108(b)(2) of
Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreements
for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the
Servicer on the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans for the
three-year period immediately preceding the related
Securitization Transaction, which may be limited to a
statement by an authorized officer of the Servicer to the
effect that the Servicer has made all advances required to be
made on residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate,
information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage
Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries,
such as through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect
of any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to
delinquency and loss experience.
(iv) For the purpose of satisfying its reporting obligation
under the Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each Subservicer and, if
applicable, any Third-Party Originator to) (a) provide prompt notice to
the Purchaser, any Master Servicer and any Depositor in writing of (1)
any merger, consolidation or sale of substantially all of the assets of
the Company, (2) the Company's entry into an agreement with a
Subservicer to perform or assist in the performance of any of the
Company's obligations under the Agreement or any Reconstitution
Agreement, (3) any Event of Default under the terms of the Agreement or
any Reconstitution Agreement, and (4) any material litigation or
governmental proceedings involving the Company, any Subservicer or any
Third Party Originator.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement or any
applicable Reconstitution Agreement related thereto by any Person (i)
into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the
Company or any Subservicer, the Company shall provide to the Purchaser
and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y)
in writing, all information reasonably requested by the Purchaser or
any Depositor in order to comply with its reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(vi) If reasonably requested by the Purchaser or the Master
Servicer, the Company shall provide to the Purchaser or the Master
Servicer, evidence of the authorization of the person signing any
certification or statement.
(vii) The Company shall provide to the Purchaser and any
Depositor a description of any affiliation or relationship required to
be disclosed under Item 1119 of Regulation AB between the Company and
any of the parties listed in Items 1119(a)(1)-(6) of Regulation AB that
develops following the closing date of a Securitization Transaction
(other than an affiliation or relationship that the Purchaser, the
Depositor or any issuing entity has with any of such parties listed in
Items 1119(a)(1)-(6) of Regulation AB) no later than 15 calendar days
prior to the date the Depositor is required to file its Form 10-K
disclosing such affiliation or relationship. For purposes of the
foregoing, the Company (1) shall be entitled to assume that the parties
to the Securitization Transaction with whom affiliations or relations
must be disclosed are the same as on the closing date if it provides a
written request (which may be by e-mail) to the Depositor or Master
Servicer, as applicable, requesting such confirmation and either
obtains such confirmation or receives no response within three (3)
Business Days, (2) shall not be obligated to disclose any affiliations
or relationships that may develop after the closing date for the
Securitization Transaction with any parties not identified to the
Company pursuant to clause (D) of paragraph (i) of this Section 2(c),
and (3) shall be entitled to rely upon any written identification of
parties provided by the Depositor, the Purchaser or any master
servicer.
(viii) Not later than ten days prior to the deadline for the
filing of any distribution report on Form 10-D in respect of any
Securitization Transaction that includes any of the Mortgage Loans
serviced by the Company or any Subservicer, the Company or such
Subservicer, as applicable, shall, to the extent the Company or such
Subservicer has knowledge, provide to the party responsible for filing
such report (including, if applicable, the Master Servicer) notice of
the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(a) any material modifications, extensions or waivers of
Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material over time
(Item 1121(a)(11) of Regulation AB;
(b) material breaches of Mortgage Loan representations or
warranties or transaction covenants under the applicable Existing
Agreement, as amended herein (Item 1121(a)(12) of Regulation AB); and
(c) information regarding any Mortgage Loan changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or
selection of pool assets (Item 1121(a)(14) of Regulation AB).
(d) Servicer Compliance Statement.
On or before March 5 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, to the effect that (i) a review of the
Company's servicing activities during the immediately preceding calendar year
(or applicable portion thereof) and of its performance under the servicing
provisions of this Agreement and any applicable Reconstitution Agreement during
such period has been made under such officer's supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Company has fulfilled all
of its servicing obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
(e) Report on Assessment of Compliance and Attestation.
(i) On or before March 5 of each calendar year, commencing in
2007, the Company shall:
(A) deliver to the Purchaser and any Depositor a
report regarding the Company's assessment of compliance with
the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and
signed by an authorized officer of the Company, and shall
address each of the Servicing Criteria specified on Exhibit A
hereto (wherein "Investor" shall mean the master servicer);
(B) deliver to the Purchaser and any Depositor a
report of a registered public accounting firm that attests to,
and reports on, the assessment of compliance made by the
Company and delivered pursuant to the preceding paragraph.
Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;
(C) cause each Subservicer and each Subcontractor
determined by the Company pursuant to Section 2(f)(ii) to be
"participating in the servicing function" within the meaning
of Item 1122 of Regulation AB (each, a "Participating
Entity"), to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and
when provided in paragraphs (i) and (ii) of this Section 2(e);
and
(D) deliver to the Purchaser, Depositor or any other
Person that will be responsible for signing the certification
(a "Sarbanes Certification") required by Rules 13a-14(d) and
15d-14(d) under the Exchange Act (pursuant to Section 302 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a
certification, signed by an appropriate officer of the
Company, in the form attached hereto as Exhibit B; provided
that such certification delivered by the Company may not be
filed as an exhibit to, or included in, any filing with the
Commission.
The Company acknowledges that the party identified in clause (i)(D)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
(ii) Each assessment of compliance provided by a Subservicer
pursuant to Section 2(e)(i)(A) shall address each of the Servicing
Criteria specified on Exhibit A hereto or, in the case of a Subservicer
subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Participating
Entity pursuant to Section 2(e)(i)(C) need not address any elements of
the Servicing Criteria other than those specified by the Company
pursuant to Section 2(f).
(f) Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any related Reconstitution Agreement unless the Company
complies with the provisions of paragraph (i) of this Subsection (f). The
Company shall not hire or otherwise utilize the services of any Subcontractor,
and shall not permit any Subservicer to hire or otherwise utilize the services
of any Subcontractor, to fulfill any of the obligations of the Company as
servicer under this Agreement or any related Reconstitution Agreement unless the
Company complies with the provisions of paragraph (ii) of this Subsection (f).
(i) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subservicer. If required by Regulation AB, the Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit
of the Purchaser and any Depositor to comply with the provisions of
this Section and with Sections 2(b), 2(c)(iii), 2(c)(v), 2(d), and 2(e)
of this Agreement , and to provide the information required with
respect to such Subservicer under Section 2(c)(iv) of this Agreement.
The Company shall be responsible for obtaining from each Subservicer
and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section 2(d), any assessment of compliance and attestation required to
be delivered by such Subservicer under Section 2(e) and any
certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2(e)
as and when required to be delivered.
(ii) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Company shall after
engagement of such Subcontractor, promptly provide a written
description of the role and function of each Subcontractor utilized by
the Company or any Subservicer, specifying (A) the identity of each
such Subcontractor, (B) which (if any) of such Subcontractors are
Participating Entities, and (C) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by
each Participating Entity identified pursuant to clause (B) of this
paragraph.
The Company shall cause any such Participating Entity used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Section 2(e) of this Agreement. The
Company shall be responsible for obtaining from each Participating Entity and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Participating Entity under Section
2(e), in each case as and when required to be delivered.
(g) Indemnification; Remedies.
(i) The Company shall indemnify the Purchaser and the
Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the execution or filing of any report required
to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each Person who controls any of such
parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective present and former
directors, officers and employees of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(A) (1) any untrue statement of a material fact
contained or alleged to be contained in any information,
report, certification or other material provided in written or
electronic form under this Amendment Reg AB by or on behalf of
the Company, or provided under this Amendment Reg AB by or on
behalf of any Subservicer, Participating Entity or, if
applicable, Third-Party Originator (collectively, the "Company
Information"), or (2) the omission or alleged omission to
state in the Company Information a material fact required to
be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way
of clarification, that clause (2) of this paragraph shall be
construed solely by reference to the Company Information and
not to any other information communicated in connection with a
sale or purchase of securities, without regard to whether the
Company Information or any portion thereof is presented
together with or separately from such other information;
(B) any failure by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or
other material when and as required under this Amendment Reg
AB, including any failure by the Company to identify pursuant
to Section 2(f)(ii) any Participating Entity;
(C) any breach by the Company of a representation or
warranty set forth in Section 2(b)(i) or in a writing
furnished pursuant to Section 2(b)(ii) and made as of a date
prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to
Section 2(b)(ii) to the extent made as of a date subsequent to
such closing date.
If the indemnification provided for in this Section 2(g)(i) is
unavailable or insufficient to hold harmless the indemnified parties
set forth in this Section 2(g)(i) above, then the Company agrees that
it shall contribute to the amount paid or payable by such indemnified
party as a result of any claims, losses, damages or liabilities
incurred by such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnified party on the one hand
and the Company on the other.
In the case of any failure of performance described in clause (i)(B) of
this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the execution
or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all
costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator.
(ii) (A) Any failure by the Company to deliver or, if required
by Regulation AB, any Subservicer, any Participating Entity or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and
as required under this Amendment Reg AB, which continues
unremedied for three Business Days after receipt by the
Company and by the applicable Subservicer, Subcontractor, or
Third-Party Originator, so long as their addresses for notices
has been provided, in writing, previously to the Purchaser or
the Depositor, of written notice of such failure from the
Purchaser or Depositor shall, except as provided in clause (B)
of this paragraph, constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
related thereto without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement
related thereto to the contrary) of any compensation to the
Company; provided, however it is understood that the Company
shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by
the Company under this Agreement and/or any applicable
Reconstitution Agreement. Notwithstanding anything to the
contrary set forth herein, to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or
obligations following termination of the Company as servicer,
such provision shall be given effect.
(B) Any failure by the Company, or, if required under
Regulation AB, any Subservicer or any Participating Entity to
deliver any information, report, certification or accountants'
letter when and as required under Section 2(d) or 2(e),
including any failure by the Company to identify a
Participating Entity, which continues unremedied for ten
calendar days after the date on which such information,
report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement to
the contrary) of any compensation to the Company; provided,
however it is understood that the Company shall remain
entitled to receive reimbursement for all unreimbursed Monthly
Advances and Servicing Advances made by the Company under this
Agreement and/or any applicable Reconstitution Agreement.
Notwithstanding anything to the contrary set forth herein, to
the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following
termination of the Company as servicer, such provision shall
be given effect.
(C) The Company shall promptly reimburse the
Purchaser (or any affected designee of the Purchaser, such as
a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor as such are incurred, in
connection with the termination of the Company as servicer and
the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit
whatever rights the Company, the Purchaser or any Depositor
may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific
performance or injunctive relief.
(iii) The indemnification and contribution obligations set
forth in this Section 2(g) shall survive the termination of
this Agreement or the termination of any party to this
Agreement.
3. Notwithstanding any other provision of this Amendment Reg AB, the
Company shall seek the consent of the Purchaser for the utilization of all
Subservicers and Participating Entities, when required by and in accordance with
the terms of the applicable Existing Agreement.
4. Each Existing Agreement is hereby amended by adding the Exhibit
attached hereto as Exhibit A to the end thereto. References in this Amendment
Reg AB to "this Agreement" or words of similar import (including indirect
references to the Agreement) shall be deemed to be references to the applicable
Existing Agreement as amended by this Amendment Reg AB. Except as expressly
amended and modified by this Amendment Reg AB, each Existing Agreement shall
continue to be, and shall remain, in full force and effect in accordance with
its terms. In the event of a conflict between this Amendment Reg AB and any
other document or agreement, including without limitation the applicable
Existing Agreement, this Amendment Reg AB shall control.
5. This Amendment Reg AB may be executed in one or more counterparts
and by different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
AB shall bind and inure to the benefit of and be enforceable by the Company and
the Purchaser and the respective permitted successors and assigns of the Company
and the successors and assigns of the Purchaser.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS, INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS SERVICING LP
By:___________________________________
Name:_________________________________
Title:
Signature page to Amendment Reg AB
EXHIBIT A
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
Applicable Servicing
Servicing Criteria Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
General Servicing Considerations Policies
-----------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities. X
-----------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
-----------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction X
1122(d)(1)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to X
1122(d)(2)(ii) an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for
such advances, are made, reviewed and approved as specified
1122(d)(2)(iii) in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the X
1122(d)(2)(v) Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent unauthorized X
1122(d)(2)(vi) access.
-----------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date, or such other
number of days specified in the transaction agreements;
(C) reviewed and approved by someone other than the person who
prepared the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved within 90 X
calendar days of their original identification, or such other
1122(d)(2)(vii) number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid X
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
-----------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
1122(d)(3)(iv) statements.
-----------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required X
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements X
-----------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
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 X
1122(d)(4)(iv) loan documents.
-----------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance. X
-----------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents. X
-----------------------------------------------------------------------------------------------------------------
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 X
1122(d)(4)(vii) established by the transaction agreements.
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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 X
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
1122(d)(4)(ix) the related mortgage loan documents. X
-----------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 X
calendar days of full repayment of the related mortgage loans, or
1122(d)(4)(x) such other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such X
1122(d)(4)(xi) other number of days specified in the transaction agreements.
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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
1122(d)(4)(xii) omission. X
-----------------------------------------------------------------------------------------------------------------
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 X
1122(d)(4)(xiii) agreements.
-----------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements. X
-----------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
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EXHIBIT DD
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT (this "Agreement"),
dated as of September 28, 2007 (the "Closing Date"), is between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL HOLDINGS LLC, successor in interest by merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL INC. (the "Sponsor") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. (the
"Depositor").
W I T N E S S E T H:
WHEREAS, the Sponsor acquired certain mortgage loans (the "Original
Loan Sellers Mortgage Loans") set forth on the mortgage loan schedule attached
hereto as Schedule I (the "Original Loan Sellers Mortgage Loan Schedule") (i) at
a public auction of mortgage loans subject to a financing arrangement with the
Sponsor, (ii) at a public auction of mortgage loans subject to a financing
arrangement with Natixis Real Estate Capital Inc. and (iii) from NC Capital
Corporation ("NC Capital"), First NLC Financial Services, LLC ("First NLC"),
Decision One Mortgage Company, LLC ("Decision One"), MILA, Inc. ("MILA"), WMC
Mortgage Corp. ("WMC"), and Wilmington Finance, Inc. ("Wilmington", and together
with NC Capital, First NLC, Decision One, MILA and WMC, the "Original Loan
Sellers") pursuant to certain purchase agreements;
WHEREAS, the Sponsor acquired certain additional mortgage loans (the
"Accredited Mortgage Loans" and together with the Original Loan Sellers Mortgage
Loans, the "Mortgage Loans") set forth on the mortgage loan schedule attached
hereto as Schedule II (the "Accredited Mortgage Loan Schedule" and together with
the Original Loan Sellers Mortgage Loan Schedule, the "Mortgage Loan Schedule")
from Accredited Home Lenders, Inc. ("Accredited", and together with the Original
Loan Sellers, the "Sellers") pursuant to that certain the Eighth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of August 1,
2006 (the "Accredited Purchase Agreement"), between the Sponsor, as purchaser,
and Accredited, as seller;
WHEREAS, pursuant to that certain ▇▇▇▇ of sale, dated as of the
Closing Date, between the Sponsor and the Depositor, the Mortgage Loans are to
be transferred by the Sponsor to the Depositor;
WHEREAS, pursuant to that certain Pooling and Servicing Agreement,
dated as of September 1, 2007 (the "Pooling and Servicing Agreement"), among the
Depositor, Saxon Mortgage Services, Inc., as a servicer, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer, securities administrator, a servicer
and as a custodian ("▇▇▇▇▇ Fargo"), Countrywide Home Loans Servicing LP, as a
servicer, Deutsche Bank National Trust Company, as trustee (the "Trustee"),
LaSalle Bank National Association, as a custodian (together with ▇▇▇▇▇ Fargo in
its capacity as a custodian, the "Custodians"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-HE7 (the "Trust") shall issue its Mortgage Pass-Through
Certificates, Series 2007-HE7 (the "Certificates"), representing beneficial
ownership interest in a trust, the assets of which include, but are not limited
to, the Mortgage Loans transferred by the Depositor to the Trust pursuant to the
Pooling and Servicing Agreement;
WHEREAS, in connection with the securitization of the Mortgage Loans
and the issuance of the Certificates, the parties hereto have determined it to
be necessary and appropriate for the Sponsor to make various representations and
warranties to the Depositor regarding the Mortgage Loans;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms.
(a) Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms in the Pooling and Servicing
Agreement. In the event of a conflict between any of the defined terms contained
in this Agreement and the Pooling and Servicing Agreement, the definitions
contained in the Pooling and Servicing Agreement shall control.
(b) The following capitalized terms shall have the meanings assigned
to such terms below:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
ALTA: The American Land Title Association, or any successor thereto.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the related Mortgagor and relating to a stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to
Appendix E of Standard & Poor's Glossary.
CLTA: California Land Title Association.
Deleted Mortgage Loan: A Mortgage Loan that is purchased or replaced
or to be replaced with a Qualified Substitute Mortgage Loan by the Sponsor in
accordance with the terms of this Agreement.
Delinquent: With respect to any Mortgage Loan, means any Monthly
Payment due on a Due Date that is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with respect to each Group I
Mortgage Loan secured by the related Mortgagor's primary residence with an
"annual percentage rate" or total "points and fees" (as each such term is
calculated under HOEPA) payable by the related Mortgagor that exceed the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R. ss. 226.32(a)(1)(i) and (ii), (c) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
was defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004), "high risk home," "predatory" or similar loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (d) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
such Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination and
(b) if such Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the Mortgagor or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Sponsor for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid by the
Sponsor to the Depositor or its designee in the month of substitution), (ii)
have a Mortgage Rate not less than, and not more than 1% greater than, the
Mortgage Rate of the Deleted Mortgage Loan, (iii) have a remaining term to
maturity not greater than, and not more than one year less than, that of the
Deleted Mortgage Loan, (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed-rate or adjustable-rate with the same Periodic Mortgage Rate Cap
and Index) and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 2 of this Agreement.
Standard & Poor's Glossary: Version 5.7 of the Standard & Poor's
LEVELS(R) Glossary Appendix E.
Section 2. Representations and Warranties of the Sponsor.
(a) The Sponsor represents and warrants to the Depositor
as of the date hereof that:
(i) Each Mortgage Loan at the time it was made complied
in all material respects with applicable local, state and
federal laws, including, but not limited to, all applicable
predatory and abusive lending laws.
(ii) No Mortgage Loan is a "High Cost Loan" or "Covered
Loan", as applicable (as such terms are defined in the then
current Standard & Poor's Glossary).
(iii) No Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act.
(b) As to each Original Loan Sellers Mortgage Loan, the Sponsor
hereby makes the representations and warranties set forth on Part A of Exhibit I
hereto to the Depositor as of the Closing Date (or such other date as set forth
herein). As to each Original Loan Sellers Mortgage Loan which is a Group I
Mortgage Loan, the Sponsor hereby makes the representations and warranties set
forth on Part B of Exhibit I hereto to the Depositor as of the Closing Date (or
such other date as set forth herein).
Section 3. Assignment and Assumption of EPD Provision.
(a) The Sponsor hereby assigns, conveys, transfers and sets over to
the Depositor all of the Sponsor's right, title and interest (except as
otherwise set forth in Section 3(b) below) in, to and under the Sponsor's rights
to require any Seller to repurchase a Mortgage Loan as a result of a scheduled
payment of principal and interest not being made during the period of time
specified in the early payment default provision (the "EPD Provision") specified
on Schedule III attached hereto in the related letter agreement listed on
Schedule III attached hereto (each a "Purchase Price and Terms Agreement"), each
between the Sponsor and the applicable Seller, but only to the extent such
provision relates to any Mortgage Loans that are the subject of this Agreement.
(b) Notwithstanding the foregoing set forth in Section 3(a), the
Sponsor specifically reserves and does not assign to the Depositor any and all
right, title and interest in, to and under the right to receive as part of the
repurchase price for any such Mortgage Loan repurchased pursuant to any EPD
Provision the excess (the "Repurchase Premium") of the Purchase Price Percentage
(as defined in the applicable Purchase Price and Terms Agreement) over 100%
multiplied by the unpaid principal balance of such Mortgage Loan. In the event
any Mortgage Loan is required to be repurchased by the applicable Seller
pursuant to the provisions of the applicable Purchase Price and Terms Agreement
specified in Section 3(a) above, the Depositor shall require the applicable
Seller to repurchase such Mortgage Loan at the Repurchase Price (as defined in
such Purchase Price and Terms Agreement), and the Depositor shall cause the
applicable Seller to pay such Repurchase Premium to the Sponsor or its designee
as instructed by the Sponsor.
Section 4. Remedies for Breach of Representations and Warranties of
the Sponsor; the Repurchase Price.
(a) Within ninety (90) days of the earlier of either discovery by or
notice to the Sponsor of any breach of a representation or warranty which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Depositor, the Certificateholders (or which materially and adversely
affects the value of the applicable Mortgage Loan or the interest of the
Depositor, the Certificateholders), the Sponsor shall cure such breach in all
material respects and, if such breach cannot be cured, the Sponsor shall, at the
Depositor's option, within ninety (90) calendar days of the Sponsor's receipt of
request from the Depositor, repurchase such Mortgage Loan at the Repurchase
Price. In the event that such a breach shall involve any representation or
warranty set forth in Section 2 of this Agreement, and such breach cannot be
cured within ninety (90) days of the earlier of either discovery by or notice to
the Sponsor of such breach, all of the Mortgage Loans materially and adversely
affected thereby shall, at the Depositor's option, be repurchased by the
Sponsor. Notwithstanding the above sentence, within ninety (90) days of the
earlier of either discovery by, or notice to, the Sponsor of any breach of the
representations or warranties set forth in clauses (e), (o) and (r) on Part A of
Exhibit I or on Part B of Exhibit I, the Sponsor shall repurchase the affected
Mortgage Loan or Mortgage Loans at the Repurchase Price, together with all
expenses incurred by the Depositor as a result of such repurchase. Any
repurchase of a Mortgage Loan or Mortgage Loans pursuant to the foregoing
provisions of this Section 4 shall be accomplished by direct remittance of the
Repurchase Price to the Depositor or its designee in accordance with the
Depositor's instructions.
However, if the breach shall involve a representation or warranty
set forth in Section 2 of this Agreement (other than the representations or
warranties set forth in clauses (e), (o) and (r) on Part A of Exhibit I and or
on Part B of Exhibit I) relating to any Mortgage Loan and the Sponsor discovers
or receives notice of any such breach within two years of the Closing Date, the
Sponsor shall, at the Depositor's option and provided that the Sponsor has a
Qualified Substitute Mortgage Loan, rather than repurchase such Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Qualified
Substitute Mortgage Loans, provided that any such substitution shall be effected
not later than two years after the Closing Date. If the Sponsor has no Qualified
Substitute Mortgage Loan, the Sponsor shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan or Mortgage Loans pursuant to the
foregoing provisions of this Section 4 shall be accomplished by direct
remittance of the Repurchase Price to the Depositor or its designee in
accordance with the Depositor's instructions.
At the time of repurchase or substitution, the Depositor and the
Sponsor shall arrange for the reassignment of the Deleted Mortgage Loan to the
Sponsor and the delivery to the Sponsor of any documents held by the Trustee (in
its custodial capacity) or the applicable Custodian, as applicable, relating to
the Deleted Mortgage Loan. In the event of a repurchase or substitution, the
Sponsor shall, simultaneously with such reassignment, give written notice to the
Depositor that such repurchase or substitution has taken place, amend the
applicable Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the applicable Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Sponsor shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Sponsor shall effect such substitution
by delivering to the Trustee (in its custodial capacity) or the applicable
Custodian, as applicable, or to such other party as the Depositor may designate
in writing for such Qualified Substitute Mortgage Loan the documents required by
the Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
by the Pooling and Servicing Agreement. No substitution will be made in any
calendar month after the initial Determination Date for such month. The Sponsor
shall remit directly to the Depositor, or its designee, in accordance with the
Depositor's instructions, the Monthly Payment less the Servicing Fee due, if
any, on such Qualified Substitute Mortgage Loan or Mortgage Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Sponsor. For the month of substitution, distributions to the
Depositor shall include the Monthly Payment due on any Deleted Mortgage Loan in
the month of substitution, and the Sponsor shall thereafter be entitled to
retain all amounts subsequently received by the Sponsor in respect of such
Deleted Mortgage Loan.
For any month in which the Sponsor substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the Sponsor shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall, together with one month's interest at the Mortgage
Rate on the Deleted Mortgage Loan, shall be distributed by the Sponsor directly
to the Depositor or its designee in accordance with the Depositor's instructions
within two (2) Business Days of such substitution.
Any cause of action against the Sponsor relating to or arising out
of the breach of any representations and warranties made in Section 2 shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Depositor or notice thereof by the Sponsor to the Depositor, (ii) failure by the
Sponsor to cure such breach, repurchase such Mortgage Loan or substitute a
Qualified Substitute Mortgage Loan as specified above and (iii) demand upon the
Sponsor by the Depositor for compliance with this Agreement.
If any tax is imposed on "prohibited transactions" as defined in
Section 860F(a)(2) of the Internal Revenue Code of 1986 (including any successor
or amendatory provisions, the "Code"), on the "net income from foreclosure
property" as defined in Section 860G(c) of the Code, on any contribution to any
"real estate mortgage investment conduit" within the meaning of Section 860D of
the Code (a "REMIC") after the start-up day pursuant to Section 860G(d) of the
Code, or any other tax is imposed, including, if applicable, any minimum tax
imposed on any REMIC pursuant to Sections 23153 and 24878 of the California
Revenue and Taxation Code, the Sponsor shall pay the Depositor any such tax
arising out of or resulting from the Sponsor's obligation to repurchase a
Mortgage Loan pursuant to this Agreement.
(b) The Sponsor shall deliver to the Depositor all documents and
instruments required under Section 2.01 of the Pooling and Servicing Agreement
with respect to the Original Loan Sellers Mortgage Loans. In the event any
document or instrument required to be delivered to the Depositor pursuant to
Section 2.01 of the Pooling and Servicing Agreement, including an original or
copy of any document submitted for recordation to the appropriate public
recording office, is not so delivered to the Depositor, and in the event that
the Sponsor does not cure such failure within ninety (90) days of discovery or
receipt of written notification of such failure from the Depositor, the Sponsor
shall, at the Depositor's option, repurchase such Original Loan Sellers Mortgage
Loan at the Repurchase Price, together with all expenses incurred by the
Depositor as a result of such purchase.
(c) It is understood and agreed that the obligation of the Sponsor
set forth in Section 4(a) to repurchase for a Mortgage Loan in breach of a
representation or warranty contained in Section 2 constitutes the sole remedy of
the Depositor or any other person or entity with respect to such breach.
(d) The representations and warranties of the Sponsor set forth in
Section 2 shall inure to the benefit of the Depositor and its successors and
assigns until all amounts payable to the holders of the Certificates under the
Pooling and Servicing Agreement have been paid in full.
Section 5. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
Section 6. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICTS OF LAWS
PRINCIPLES.
Section 7. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 8. Captions.
The captions in this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 9. Successors and Assigns.
This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns. Any entity into which the Sponsor or
the Depositor may be merged or consolidated shall, without the requirement for
any further writing, be deemed the Sponsor or the Depositor, respectively,
hereunder.
Section 10. Amendments
This Agreement may be amended from time to time by the parties
hereto.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
Original Loan Sellers Mortgage Loan Schedule
(Delivered to the Custodians and the Trustee and not attached to this Agreement)
SCHEDULE II
Accredited Mortgage Loan Schedule
(Delivered to the Custodians and the Trustee and not attached to this Agreement)
SCHEDULE III
List of Purchase Price and Terms Agreements and EPD Provisions
Purchase Price and Terms Agreements EPD Provision
1 Purchase Price and Terms Agreement, dated as of Third full paragraph
May 28, 2006, between Accredited and the Sponsor. of Section 6 (titled
"Purchase Agreements;
Interim Servicing
Agreements").
2. Purchase Price and Terms Agreement, dated as of Third full paragraph
October 27, 2006 between Accredited and the of Section 6 (titled
Sponsor. "Purchase Agreement;
Servicing Agreement").
3. Purchase Price and Terms Agreement, dated as of Third full paragraph
November 28, 2006, between Accredited and the of Section 6 (titled
Sponsor. "Purchase Agreement;
Servicing Agreement").
4. Purchase Price and Terms Agreement, dated as of Third full paragraph
March 23, 2007, between Accredited and the of Section 6 (titled
Sponsor. "Purchase Agreement;
Servicing Agreement").
5. Purchase Price and Terms Agreement, dated as of Third full paragraph
May 8, 2007, between Accredited and the Sponsor. of Section 6 (titled
"Purchase Agreement;
Servicing Agreement").
6. Purchase Price and Terms Agreement, dated as of Third full paragraph
May 9, 2007, between Decision One and the of Section 6 (titled
Sponsor. "Purchase Agreement;
Servicing Agreement").
7. Purchase Price and Terms Agreement, dated as of Section 9.04 of the
June 8, 2007, between Decision One and the Fourth Amended and
Sponsor. Restated Purchase and
Warranties Agreement
8. Purchase Price and Terms Agreement, dated as of Second and third full
March 23, 2007, between First NLC and the paragraph of Section
Sponsor. 6 (titled "Purchase
Agreement; Servicing
Agreement").
9. Purchase Price and Terms Agreement, dated as of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Seller
December 18, 2003, between MILA and the Sponsor. Agreement, dated as
of September 10, 2003
10. Purchase Price and Terms Agreement, dated as of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Seller
September 5, 2004, between MILA and the Sponsor. Agreement, dated as
of September 10, 2003
11. Purchase Price and Terms Agreement, dated as of Third full paragraph
November 7, 2006, between NC Capital and the of Section 6 (titled
Sponsor. "Purchase Agreement").
12. Purchase Price and Terms Agreement, dated as of Third full paragraph
December 1, 2006, between NC Capital and the of Section 6 (titled
Sponsor. "Purchase Agreement").
13. Purchase Price and Terms Agreement, dated as of First full paragraph
November 11, 2006, between WMC and the Sponsor. of Section 9.04 of
the Fifth Amended and
Restated Mortgage
Loan Purchase and
Warranties Agreement
14. Purchase Price and Terms Agreement, dated as of Section 9.04 of the
June 1, 2005, between Wilmington and the Sponsor. Amended and Restated
Mortgage Loan
Purchase and
Warranties Agreement
EXHIBIT I
For the purposes of this exhibit, "Mortgage Loan" refers to each
Original Loan Sellers Mortgage Loan, "Group I Mortgage Loan" refers to each
Original Loan Sellers Mortgage Loan which is a Group I Mortgage Loan and
"Mortgage Loan Schedule" refers to the Original Loan Sellers Mortgage Loan
Schedule.
Part A- Representations and Warranties with respect to each Mortgage Loan
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule relating to the Mortgage Loans is complete, true and
correct as of the Cut-off Date;
(b) Payments Current. Except with respect to the Mortgage Loans
identified on Exhibit I-A, (i) all payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days Delinquent, have been made and credited, (ii) no
payment required under the Mortgage Loan has been 30 days or more Delinquent at
any time since the origination of the Mortgage Loan, and (iii) the first Monthly
Payment was made with respect to the Mortgage Loan on its related Due Date or
within the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable (subject to bankruptcy, equitable
principles and laws affecting creditor rights generally), in whole or in part
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto, and no Mortgagor was a debtor in any state or
Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(d) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customarily insured against in the jurisdiction
where the related Mortgaged Property is located and acceptable to the Rating
Agencies;
(e) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Charges have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Sponsor shall maintain in its
possession, available for the Depositor's inspection, and shall deliver to the
Depositor upon demand, evidence of compliance with all such requirements;
(f) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to::
(1) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments not yet
due and payable;
(3) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal; and
(4) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected first lien (with respect
to a First Lien Loan) or second lien (with respect to a Second Lien Loan) and
first priority (with respect to a First Lien Loan) or second priority (with
respect to a Second Lien Loan) security interest on the property described
therein and the Sponsor has full right to sell and assign the same to the
Depositor;
(g) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Charges), subject to bankruptcy, equitable principles and laws affecting
creditor rights generally. All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of the Sponsor, or, to
the knowledge of the Sponsor, any other person, including without limitation,
the related Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan;
(h) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac with respect to mortgage loans, and each
such title insurance policy is issued by a generally accepted title insurer and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the mortgagee, its successors and assigns, as to the first
(with respect to a First-Lien Mortgage Loan) or second (with respect to a
Second-Lien Mortgage Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (1), (2) and (3) of paragraph (f) above, and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Rate and Monthly Payment;
(i) No Defaults. Except as set forth in paragraph (b) above, there
is no default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would permit
acceleration, and neither the Sponsor nor any of its Affiliates nor any of their
respective predecessors, have waived any default, breach, violation or event
which would permit acceleration;
(j) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the related Mortgagor is not entitled to any refund of
any amounts paid or due under the Mortgage Note or Mortgage;
(k) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(l) Customary Provisions. The Mortgage contains customary and
enforceable provisions subject to bankruptcy, equitable principles and laws
affecting creditor rights that render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a mortgage loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the mortgaged property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(m) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Sponsor's knowledge, such
provision is enforceable;
(n) Mortgaged Property Undamaged; No Condemnation Proceedings. There
is no proceeding pending or, to the Sponsor's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property;
(o) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(p) No Outstanding Charges. To the best of the Sponsor's knowledge,
there are no defaults in complying with the terms of the Mortgage, and all
taxes, governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable;
(q) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Depositor, and which has
been delivered to the Trustee or to such other Person as the Depositor shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the issuer of the title insurer, if any, to the extent required, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the title insurer, to the extent required by
the policy, and which assumption agreement is part of the mortgage loan file;
(r) Qualified Mortgage. The Mortgage Loan would be a "qualified
mortgage," within the meaning of Section 860G(a)(3) of the Code, if transferred
to a REMIC on its startup day in exchange for the regular or residual interests
in the REMIC;
(s) Ownership. The Sponsor is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Sponsor has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Depositor free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan and
following the sale of each Mortgage Loan, the Depositor will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest;
(t) Location of Improvements; No Encroachments. All improvements
which were considered in determining the appraised value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(u) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the mortgagee, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated; and
(v) LTV. No Mortgage Loan has an LTV greater than 100%.
Part B - Representations and Warranties with respect to each
Group I Mortgage Loan
(a) Fair Credit Reporting Act. The Sponsor has, or has caused the
applicable servicer to, fully furnished accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis and in accordance with the Fair Credit Reporting Act and its
implementing regulations;
(b) Mortgagor Selection. The related Mortgagor was not encouraged or
required to select a mortgage loan product offered by the Group I Mortgage
Loan's originator which is a higher cost product designed for less creditworthy
mortgagors, taking into account such facts as, without limitation, the Group I
Mortgage Loan's requirements and the related Mortgagor's credit history, income,
assets and liabilities. For a Mortgagor who seeks financing through a Mortgage
Loan originator's higher-priced subprime lending channel, the related Mortgagor
was directed towards or offered the Group I Mortgage Loan originator's standard
mortgage line if the related Mortgagor was able to qualify for one of the
standard products;
(c) Underwriting Methodology. The methodology used in underwriting the
extension of credit for each Group I Mortgage Loan does not rely on the extent
of the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed related
objective criteria that related such facts as, without limitation, the related
Mortgagor's income, assets, and liabilities to the proposed mortgage payment
and, based on such methodology, the Group I Mortgage Loan's originator made a
reasonable determination that at the time of origination the related Mortgagor
had the ability to make timely payments on the Group I Mortgage Loan;
(d) Group I Mortgage Loans with Prepayment Charges. With respect to any
Group I Mortgage Loan that contains a provision permitting imposition of a
prepayment charge upon a prepayment prior to maturity: (i) with respect to each
Group I Mortgage Loan secured by the related Mortgagor's primary residence, the
Group I Mortgage Loan provides some benefit to the related Mortgagor, including
but not limited to a rate or fee reduction, in exchange for accepting such
prepayment charge, (ii) with respect to each Group I Mortgage Loan secured by
the related Mortgagor's primary residence, the Group I Mortgage Loan's
originator had a written policy of offering the related Mortgagor, or requiring
third-party brokers to offer the related Mortgagor, the option of obtaining a
mortgage loan that did not require payment of such a prepayment charge, (iii)
the prepayment charge was adequately disclosed to the related Mortgagor in the
mortgage loan documents pursuant to applicable state, local and federal law, and
(iv) and no such prepayment charge may be imposed for a term in excess of five
(5) years with respect to Group I Mortgage Loans originated prior to October 1,
2002. With respect to Group I Mortgage Loans originated on or after October 1,
2002, the duration of the prepayment charge period shall not exceed three (3)
years from the date of the Mortgage Note unless the Group I Mortgage Loan was
modified to reduce the prepayment charge period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in prepayment charge period;
(e) ▇▇▇▇▇▇ Mae Loan Limits. The original principal balance of each Group I
Mortgage Loan was within ▇▇▇▇▇▇ Mae's dollar amount limits for conforming one-
to four-family mortgage loans and the original principal balance for each Group
I Mortgage Loan which is a Second-Lien Mortgage Loan was within one-half of
▇▇▇▇▇▇ Mae's dollar amount limits for one-unit conforming one-to four-family
mortgage loans for first-lien mortgage loans, without regard to the number of
units in the related Mortgaged Property;
(f) ▇▇▇▇▇▇ ▇▇▇ Loan Limits for Second-Lien Mortgage Loans. With respect to
each Group I Mortgage Loan which is a Second-Lien Mortgage Loan (A) such lien is
on a one-to four-family residence that is the principal residence of the related
Mortgagor, and (B) the original principal balance of the related First-Lien
Mortgage Loan plus the original principal balance of any subordinate lien
mortgage loans relating to the same Mortgaged Property was within ▇▇▇▇▇▇ Mae's
dollar amount limits for First-Lien Mortgage Loans for that property type;
(g) Points and Fees. With respect to each Group I Mortgage Loan secured by
the related Mortgagor's primary residence, no Mortgagor was charged "points and
fees" in an amount greater than (i) $1,000, or (ii) 5% of the principal amount
of such Group I Mortgage Loan, whichever is greater. For purposes of this
representation, "points and fees" (x) include origination, underwriting, broker
and finder fees and charges that the mortgagee imposed as a condition of making
the Group I Mortgage Loan, whether they are paid to the mortgagee or a third
party, and (y) exclude bona fide discount points, fees paid for actual services
rendered in connection with the origination of the Group I Mortgage Loan (such
as attorneys' fees, notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and tax certifications,
and home inspections), the cost of mortgage insurance or credit-risk price
adjustments, the costs of title, hazard, and flood insurance policies, state and
local transfer taxes or fees, escrow deposits for the future payment of taxes
and insurance premiums, and other miscellaneous fees and charges which
miscellaneous fees and charges, in total, do not exceed 0.25% of the principal
amount of such Group I Mortgage Loan;
(h) Fees and Charges. All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Group I Mortgage Loan has been
disclosed in writing to the related Mortgagor in accordance with applicable
state and federal law and regulation.
(i) Purchase of Insurance. No Mortgagor was required to purchase any
single-premium credit insurance policy (e.g. life, mortgage, disability,
property, accident unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health insurance) in
connection with the origination of the Group I Mortgage Loan. No proceeds from
any Group I Mortgage Loan were used to purchase single-premium credit insurance
policies or debt cancellation agreements as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(j) No Arbitration. No Group I Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Group I Mortgage Loan
transaction;
(k) No Group I Mortgage Loan is a balloon mortgage loan that has an
original stated maturity of less than seven (7) years; and
(l) No Group I Mortgage Loan has a loan application date on or after
September 13, 2007.
EXHIBIT VI-C
Schedule of Delinquent Mortgage Loans
[Available upon Request]
EXHIBIT EE
INTEREST RATE CAP AGREEMENT
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
DATE: September 28, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7,
Mortgage Pass-Through Certificates, Series 2007-HE7
ATTENTION: Client Manager--MSAC 2007-HE7
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HRWYR
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ Fargo Bank, National Association, not individually, but
solely as Securities Administrator (the "Securities Administrator") under the
Pooling and Servicing Agreement, dated and effective as of September 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Deutsche Bank National
Trust Company, as Trustee, Saxon Mortgage Services, Inc., as Servicer,
Countrywide Home Loans Servicing LP, as Servicer, and ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and Securities Administrator (the "PSA") for the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE7, Mortgage Pass-Through
Certificates, Series 2007-HE7 ("Party B").
The definitions and provisions contained in the 2006 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of September 28, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:......................... With respect to any Calculation
Period, the notional amount set
forth for such Calculation
Period in Schedule I attached
hereto.
Trade Date:.............................. September 27, 2007
Effective Date:.......................... September 28, 2007
Termination Date:........................ August 25, 2008
Fixed Amounts:
Fixed Rate Payer:.................. Party B
Fixed Rate Payer Payment Dates:.... September 28, 2007
Fixed Amount:...................... None
Floating Amounts:
Floating Rate Payer:............... Party A
Cap Rate:.......................... 6.750%
Floating Rate Payer Payment
Dates:.......................... Early Payment--For each
Calculation Period, the first
Business Day prior to each
Floating Rate Payer Period End
Date.
Floating Rate Payer Period End
Dates:.......................... The 25th calendar day of each
month during the Term of this
Transaction, commencing October
25, 2007, subject to adjustment
in accordance with the Business
Day Convention.
Floating Rate Option:.............. USD-LIBOR-BBA
Floating Amount:................... To be determined in accordance
with the following formula:
10 * Floating Rate * Notional
Amount * Floating Rate Day
Count Fraction.
Designated Maturity:............... One month
Floating Rate Day Count Fraction:.. Actual/360
Reset Dates:....................... The first day of each
Calculation Period.
Compounding:....................... Inapplicable
Business Days:........................... New York and Los Angeles
Business Day Convention:................. Following
2. Account Details and Settlement Information:
Payment to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank, National Association
ABA No.: 121 000 248
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. 2007-HE7 (cap)
3. Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Confirmation is executed by
▇▇▇▇▇ Fargo Bank, National Association (i) this Confirmation is executed
and delivered by ▇▇▇▇▇ Fargo Bank, National Association not in its
individual capacity but solely as Securities Administrator of the Trust
under the PSA in the exercise of the powers and authority conferred and
invested in it as Securities Administrator thereunder, (ii) each of the
representations, undertakings and agreements herein made on behalf of
Party B is made and intended not as personal representations of the
Securities Administrator but is made and intended for the purpose of
binding only the Trust, and (iii) under no circumstances shall ▇▇▇▇▇ Fargo
Bank, National Association in its individual capacity be personally liable
for the payment of any indebtedness or expenses or be personally liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken under this Confirmation.
4. Modifications to the Agreement. For purposes of this Transaction only, the
Agreement is modified as follows: Part 1(f)(ii), Part 1(h)(A) and Part
5(f) of the Schedule to the ISDA Master Agreement are hereby deleted in
their entirety.
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, not
individually, but solely as Securities
Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE7, Mortgage
Pass-Through Certificates, Series
2007-HE7
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
Line Calculation Period Notional Amount ($) Multiplier
---- ---------------------------------- ------------------- ----------
1 Effective Date 10/25/2007 137,350,300.82 10
2 10/25/2007 11/25/2007 131,636,543.68 10
3 11/25/2007 12/25/2007 126,514,658.25 10
4 12/25/2007 1/25/2008 121,531,383.68 10
5 1/25/2008 2/25/2008 116,674,880.96 10
6 2/25/2008 3/25/2008 111,954,982.00 10
7 3/25/2008 4/25/2008 107,381,177.25 10
8 4/25/2008 5/25/2008 102,980,614.06 10
9 5/25/2008 6/25/2008 98,714,751.73 10
10 6/25/2008 7/25/2008 94,582,862.13 10
11 7/25/2008 Termination Date 90,591,356.11 10
EXHIBIT FF
MONTHLY LOAN LEVEL DATA FILE
LOAN NUM
NEXT DUE DATE
PMT P&I CONTSTANT
RTE
BEG SCHED BAL
SCHED PRIN
CURTAIL
LIQUIDATED BALANCE
END SCHED BAL
NET INT
NEG AMORT AMOUNT
NEXT RATE CHANGE DATE
ACTION CODE STATUS
DEALID
LOSS ON LIQUIDATED PROP
MODIFICATION DATE
