MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., Depositor SUNTRUST MORTGAGE, INC., Transferor WELLS FARGO BANK, N.A., Master Servicer and Trust Administrator U.S. BANK NATIONAL ASSOCIATION, Trustee SUNTRUST BANK Custodian POOLING AND SERVICING...
Exhibit
4.1
MORTGAGE
ASSET SECURITIZATION TRANSACTIONS, INC.,
Depositor
SUNTRUST
MORTGAGE, INC.,
Transferor
XXXXX
FARGO BANK, N.A.,
Master
Servicer and Trust Administrator
U.S.
BANK
NATIONAL ASSOCIATION,
Trustee
SUNTRUST
BANK
Custodian
_____________________________________________
Dated
as
of July 1, 2007
_____________________________________________
MORTGAGE
PASS-THROUGH CERTIFICATES, Series 2007-S1
1
TABLE
OF
CONTENTS
|
ARTICLE
I DEFINITIONS
|
9
|
|
|
Section
1.01.
|
Definitions.
|
9
|
|
Section
1.02.
|
Certain
Calculations.
|
44
|
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
|
44
|
|
|
Section
2.01.
|
Conveyance
of Mortgage Loans.
|
44
|
|
Section
2.02.
|
Acceptance
by Trustee of the Mortgage Loans.
|
49
|
|
Section
2.03.
|
Remedies
for Breaches of Representations and Warranties.
|
51
|
|
Section
2.04.
|
Representations
and Warranties of the Depositor as to the Mortgage Loans.
|
53
|
|
Section
2.05.
|
[Reserved].
|
54
|
|
Section
2.06.
|
Execution
and Delivery of Certificates.
|
54
|
|
Section
2.07.
|
REMIC
Matters.
|
54
|
|
Section
2.08.
|
Covenants
of the Master Servicer.
|
54
|
|
Section
2.09.
|
Representations
and Warranties of the Master Servicer.
|
55
|
|
Section
2.10.
|
Representations
and Warranties of the Custodian.
|
56
|
|
ARTICLE
III ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
|
57
|
|
|
Section
3.01.
|
Master
Servicing of Mortgage Loans.
|
57
|
|
Section
3.02.
|
Monitoring
of Servicer.
|
58
|
|
Section
3.03.
|
Monitoring
of Custodian.
|
60
|
|
Section
3.04.
|
Rights
of the Depositor and the Trustee in Respect of the Master
Servicer.
|
60
|
|
Section
3.05.
|
Trustee
to Act as Master Servicer.
|
60
|
|
Section
3.06.
|
Protected
Accounts.
|
61
|
|
Section
3.07.
|
Collection
of Mortgage Loan Payments; Collection Account; Distribution
Account.
|
62
|
|
Section
3.08.
|
Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
|
65
|
|
Section
3.09.
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
65
|
|
Section
3.10.
|
Permitted
Withdrawals from the Collection Account and Distribution
Account.
|
66
|
|
Section
3.11.
|
Maintenance
of Hazard Insurance; Maintenance of Primary Insurance
Policies.
|
68
|
|
Section
3.12.
|
Presentment
of Claims and Collection of Proceeds.
|
68
|
|
Section
3.13.
|
Maintenance
of the Primary Insurance Policies.
|
68
|
|
Section
3.14.
|
Realization
upon Defaulted Mortgage Loans.
|
69
|
|
Section
3.15.
|
REO
Property.
|
69
|
i
|
Section
3.16.
|
Due-on-Sale
Clauses; Assumption Agreements.
|
70
|
|
Section
3.17.
|
Trustee
to Cooperate; Release of Mortgage Files.
|
71
|
|
Section
3.18.
|
Documents,
Records and Funds in Possession of Master Servicer and Custodian
to Be
Held for the Trustee.
|
71
|
|
Section
3.19.
|
Master
Servicing Compensation.
|
72
|
|
Section
3.20.
|
Access
to Certain Documentation.
|
72
|
|
Section
3.21.
|
Annual
Statement as to Compliance.
|
72
|
|
Section
3.22.
|
Report
on Assessment of Compliance and Attestation.
|
73
|
|
Section
3.23.
|
Errors
and Omissions Insurance; Fidelity Bonds.
|
76
|
|
ARTICLE
IV DISTRIBUTIONS AND SERVICING ADVANCES
|
77
|
|
|
Section
4.01.
|
Advances.
|
77
|
|
Section
4.02.
|
Priorities
of Distribution.
|
77
|
|
Section
4.03.
|
Allocation
of Realized Losses.
|
82
|
|
Section
4.04.
|
Distribution
Date Statements to Certificateholders.
|
85
|
|
ARTICLE
V THE CERTIFICATES
|
87
|
|
|
Section
5.01.
|
The
Certificates.
|
87
|
|
Section
5.02.
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
88
|
|
Section
5.03.
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
93
|
|
Section
5.04.
|
Persons
Deemed Owners.
|
94
|
|
Section
5.05.
|
Access
to List of Certificateholders’ Names and Addresses.
|
94
|
|
Section
5.06.
|
Maintenance
of Office or Agency.
|
94
|
|
Section
5.07.
|
Deposit
of Uncertificated REMIC Interests.
|
94
|
|
ARTICLE
VI THE DEPOSITOR, THE MASTER SERVICER AND THE CUSTODIAN
|
95
|
|
|
Section
6.01.
|
Respective
Liabilities of the Depositor, the Master Servicer and the
Custodian.
|
95
|
|
Section
6.02.
|
Merger
or Consolidation of the Depositor, the Master Servicer and the
Custodian.
|
95
|
|
Section
6.03.
|
Limitation
on Liability of the Depositor, the Transferor, the Master Servicer,
the
Custodian and Others.
|
95
|
|
Section
6.04.
|
Limitation
on Resignation of Master Servicer.
|
96
|
|
Section
6.05.
|
Sale
and Assignment of Master Servicing Rights.
|
96
|
|
Section
6.06.
|
Fees
of the Custodian.
|
97
|
|
ARTICLE
VII DEFAULT
|
97
|
|
|
Section
7.01.
|
Events
of Default.
|
97
|
|
Section
7.02.
|
Trustee
to Act; Appointment of Successor.
|
99
|
|
Section
7.03.
|
Notification
to Certificateholders.
|
101
|
ii
|
ARTICLE
VIII CONCERNING THE TRUSTEE
|
101
|
|
|
Section
8.01.
|
Duties
of Trustee.
|
101
|
|
Section
8.02.
|
Certain
Matters Affecting the Trustee.
|
102
|
|
Section
8.03.
|
Trustee
Not Liable for Certificates or Mortgage Loans.
|
104
|
|
Section
8.04.
|
Trustee
May Own Certificates.
|
104
|
|
Section
8.05.
|
Trustee’s
Fees and Expenses.
|
105
|
|
Section
8.06.
|
Eligibility
Requirements for Trustee.
|
105
|
|
Section
8.07.
|
Resignation
and Removal of Trustee.
|
106
|
|
Section
8.08.
|
Successor
Trustee.
|
106
|
|
Section
8.09.
|
Merger
or Consolidation of Trustee.
|
107
|
|
Section
8.10.
|
Appointment
of Co-Trustee or Separate Trustee.
|
107
|
|
ARTICLE
IX CONCERNING THE TRUST ADMINISTRATOR AND THE MASTER
SERVICER
|
109
|
|
|
Section
9.01.
|
Duties
of Trust Administrator.
|
109
|
|
Section
9.02.
|
Certain
Matters Affecting the Trust Administrator.
|
110
|
|
Section
9.03.
|
Trust
Administrator Not Liable for Certificates or Mortgage
Loans.
|
111
|
|
Section
9.04.
|
Trust
Administrator May Own Certificates.
|
112
|
|
Section
9.05.
|
Trust
Administrator’s Fees and Expenses.
|
112
|
|
Section
9.06.
|
Eligibility
Requirements for Trust Administrator.
|
113
|
|
Section
9.07.
|
Resignation
and Removal of Trust Administrator.
|
113
|
|
Section
9.08.
|
Successor
Trust Administrator.
|
115
|
|
Section
9.09.
|
Merger
or Consolidation of Trust Administrator.
|
115
|
|
Section
9.10.
|
[Reserved].
|
116
|
|
Section
9.11.
|
Tax
Matters.
|
116
|
|
Section
9.12.
|
Periodic
Filings.
|
118
|
|
ARTICLE
X TERMINATION
|
126
|
|
|
Section
10.01.
|
Termination
upon Liquidation or Purchase of All Mortgage Loans.
|
126
|
|
Section
10.02.
|
Final
Distribution on the Certificates.
|
127
|
|
Section
10.03.
|
Additional
Termination Requirements.
|
128
|
|
ARTICLE
XI MISCELLANEOUS PROVISIONS
|
130
|
|
|
Section
11.01.
|
Amendment.
|
130
|
|
Section
11.02.
|
Recordation
of Agreement; Counterparts.
|
132
|
|
Section
11.03.
|
Governing
Law.
|
132
|
|
Section
11.04.
|
Intention
of Parties.
|
132
|
|
Section
11.05.
|
Notices.
|
133
|
|
Section
11.06.
|
Severability
of Provisions.
|
134
|
|
Section
11.07.
|
Assignment.
|
134
|
|
Section
11.08.
|
Limitation
on Rights of Certificateholders.
|
134
|
|
Section
11.09.
|
Inspection
and Audit Rights.
|
135
|
iii
|
Section
11.10.
|
Certificates
Nonassessable and Fully Paid.
|
135
|
|
Section
11.11.
|
Compliance
With Regulation AB.
|
136
|
|
Section
11.12.
|
Appointment
of a Special Servicer.
|
136
|
SCHEDULES
|
Schedule
I
|
Mortgage
Loan Schedule
|
|
Schedule
II
|
Representations
and Warranties as to the Mortgage
Loans
|
EXHIBITS
|
Exhibit
A:
|
[Reserved]
|
|
Exhibit
B
|
[Reserved]
|
|
Exhibit
C
|
Form
of Class A-R Certificate
|
|
Exhibit
D:
|
Form
of Class B Certificate
|
|
Exhibit
E:
|
Form
of Senior Certificate
|
|
Exhibit
F:
|
Form
of Reverse of Certificates
|
|
Exhibit
G:
|
Form
of Initial Certification of Custodian
|
|
Exhibit
H:
|
Form
of Final Certification of Custodian
|
|
Exhibit
I:
|
Form
of Transfer Affidavit
|
|
Exhibit
J:
|
Form
of Transferor Certificate
|
|
Exhibit
K:
|
Form
of Investment Letter (Non Rule 144A)
|
|
Exhibit
L:
|
Form
of Rule 144A Letter
|
|
Exhibit
M:
|
Form
of Request for Release
|
|
Exhibit
N:
|
Form
of Xxxxxxxx-Xxxxx Certification
|
|
Exhibit
O:
|
[Reserved]
|
|
Exhibit
P:
|
[Reserved]
|
|
Exhibit
Q:
|
Form
of Assessment of Compliance
|
|
Exhibit
R:
|
[Reserved]
|
|
Exhibit
S:
|
Additional
Disclosure Notification
|
|
Exhibit
T:
|
Additional
Form 10-D Disclosure
|
|
Exhibit
U:
|
Additional
Form 10-K Disclosure
|
|
Exhibit
V:
|
Form
8-K Disclosure Information
|
|
Exhibit
W:
|
[Reserved]
|
|
Exhibit
X:
|
Assessments
of Compliance and Attestation Reports Servicing
Criteria
|
iv
THIS
POOLING AND SERVICING AGREEMENT, dated as of July 1, 2007, among MORTGAGE ASSET
SECURITIZATION TRANSACTIONS, INC., a Delaware corporation, as depositor (the
“Depositor”), SUNTRUST MORTGAGE, INC., a Virginia corporation, as transferor
(the “Transferor”), XXXXX FARGO BANK, N.A., a national banking association
(“Xxxxx Fargo”), as master servicer (in such capacity, the “Master Servicer”)
and as trust administrator (in such capacity, the “Trust Administrator”),
SunTrust Bank, as custodian (the “Custodian”) and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (in such capacity,
the
“Trustee”).
In
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
PRELIMINARY
STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
in return for the Certificates. For federal income tax purposes, the Trust
Fund
will consist of three real estate mortgage investment conduits (each a “REMIC”
or, in the alternative, the “Sub-WAC REMIC,” the “Strip REMIC” and the “Master
REMIC,” respectively). Each Certificate, other than the
Class A-LR and Class A-UR Certificates, will represent ownership of one or
more regular interests in the Master REMIC for purposes of the REMIC Provisions.
The Class A-LR Certificate will represent ownership of the sole class of
residual interest in the Sub-WAC REMIC. The Class A-UR
Certificate will represent ownership of the sole class of residual interest
in
each of the Strip REMIC and the Master REMIC. The Master REMIC will
hold as assets the several classes of uncertificated Strip REMIC Interests
(other than the ST-A-UR Interest). The Strip REMIC will hold as
assets the several classes of uncertificated Sub-WAC REMIC Interests (other
than
the SW-A-LR Interest). The Sub-WAC REMIC will hold as assets all the
property of the Trust Fund. For federal income tax purposes, each
Sub-WAC REMIC Interest, Strip REMIC Interest and Master REMIC Interest (except
the SW-A-LR Interest, the ST-A-UR Interest and the A-UR Interest) is hereby
designated as a regular interest in its issuing REMIC. The latest
possible maturity date of all REMIC regular interests created hereby shall
be
the Latest Possible Maturity Date.
Sub
WAC REMIC:
The
Sub-WAC REMIC Interests will have the initial balances, pass-through rates
and
corresponding Loan Groups (as designated in the fourth column of the table
below, hereafter, the “Corresponding Loan Groups”) as set forth in the following
table:
|
The
Sub-WAC REMIC Interests
|
Initial
Principal Balance
|
Pass-Through
Rate
|
Corresponding
Loan Group
|
|
SW-A-1
|
(1)
|
(2)
|
1
|
|
SW-B-1
|
(1)
|
(2)
|
1
|
|
SW-C-1
|
(1)
|
(2)
|
1
|
|
SW-A-2
|
(1)
|
(2)
|
2
|
|
SW-B-2
|
(1)
|
(2)
|
2
|
|
SW-C-2
|
(1)
|
(2)
|
2
|
|
SW-A-3
|
(1)
|
(2)
|
3
|
|
SW-B-3
|
(1)
|
(2)
|
3
|
|
SW-C-3
|
(1)
|
(2)
|
3
|
|
SW-A-4
|
(1)
|
(2)
|
4
|
|
SW-B-4
|
(1)
|
(2)
|
4
|
|
SW-C-4
|
(1)
|
(2)
|
4
|
|
SW-A-5
|
(1)
|
(2)
|
5
|
|
SW-B-5
|
(1)
|
(2)
|
5
|
|
SW-C-5
|
(1)
|
(2)
|
5
|
|
SW-A-LR
|
$50
(3)
|
(3)
|
N/A
|
1
_______________
|
(1)
|
Each
Class A Sub-WAC REMIC Interest will have an initial Certificate Principal
Balance equal to 0.9% of the Subordinate Portion of its Corresponding
Loan
Group. Each Class B Sub-WAC REMIC Interest will have an initial
Certificate Principal Balance equal to 0.1% of the Subordinate Portion
of
its Corresponding Loan Group. Each Class C Sub-WAC REMIC
Interest will have an initial Certificate Principal Balance equal
to the
excess of the initial aggregate Stated Principal Balance of the Mortgage
Loans in its Corresponding Loan Group over the initial aggregate
principal
balances of the Class A and Class B Sub-WAC REMIC Interests corresponding
to such Loan Group.
|
|
(2)
|
This
Sub-WAC REMIC Interest will have an interest rate equal to the Weighted
Average Adjusted Net Mortgage Rate of the Mortgage Loans in the
Corresponding Loan Group.
|
|
(3)
|
The
Class SW-A-LR Interest is the sole class of residual interest in
the
Sub-WAC REMIC. It pays interest at a a per annum rate equal to
the Weighted Average Adjusted Net Mortgage Rate of the Group 1 Mortgage
Loans. The Certificate Principal Balance of the SW-C-5 Strip
REMIC Interest will be adjusted if necessary to reflect the Certificate
Principal Balance of the SW-A-LR Strip REMIC
Interest.
|
On
each
Distribution Date, the interest funds and the principal distribution amounts
of
the Corresponding Loan Groups will be distributed with respect to the
corresponding Sub-WAC REMIC Interests in the following manner:
(1) Interest. Interest
is to be distributed with respect to each Sub-WAC REMIC Interest at the rate,
or
according to the formulas, described above;
(2)
Principal, if no Cross-Over Situation Exists. If no Cross-Over
Situation exists with respect to any Class of Sub-WAC REMIC Interests,
principal amounts arising with respect to each of Loan Group will be allocated:
first to cause the Loan Group’s corresponding Class A and Class B Interests to
equal, respectively, 0.9% of the Subordinate Portion of such Loan Group and
0.1%
of the Subordinate Portion of such Loan Group; and second to the Loan Group’s
corresponding Class C Interest;
(3)
Principal, if a Cross-Over Situation Exists. If a Cross-Over
Situation exists with respect to the Class A and Class B Interests:
(a)
If
the Calculation Rate in respect of the outstanding Class A and Class B Interests
is less than the Subordinate Pass-Through Rate, then Principal Relocation
Payments will be made proportionately to the outstanding Class A Interests
prior
to any other principal distributions from each such Loan Group.
2
(b)
If
the Calculation Rate in respect of the outstanding Class A and Class B Interests
is greater than the Subordinate Pass-Through Rate, then Principal Relocation
Payments will be made to the outstanding Class B Interests prior to any other
principal distributions from each such Loan Group.
In
each
case, Principal Relocation Payments will be made so as to cause the Calculation
Rate in respect of the outstanding Class A and Class B Interests to equal the
Subordinate Pass-Through Rate. With respect to each Corresponding
Loan Group, if (and to the extent that) the sum of (a) the principal payments
received during the due period and (b) the realized losses, are insufficient
to
make the necessary reductions of principal on the Class A and Class B Interests,
then interest will be added to the Loan Group’s Class C Interest.
(c)
Unless required to achieve the Calculation Rate, the outstanding aggregate
Class
A and Class B Interests for all Loan Groups will not be reduced below 1 percent
of the excess of (i) the aggregate outstanding principal balances of all Loan
Groups as of the end of any due period (reduced by principal prepayments
received after the due period that are to to be distributed on the Disribution
Date related to the due period) over (ii) the aggregate Certificate Principal
Balance of the Senior Certificates for all Loan Groups as of the related
Distribution Date (after taking into account distributions of principal on
such
Distribution Date).
If
(and
to the extent that) the limitation in paragraph (c) prevents the distribution
of
principal to the corresponding Class A and Class B Interests of a Loan Group,
and if the Loan Group’s Class C Interest has already been reduced to zero, then
the excess principal from that Loan Group will be paid to the Class C Interests
of the other Corresponding Loan Groups, the aggregate Class A and Class B
Interests of which are less than 1% of the Subordinated Portion of such Loan
Groups. If the Loan Group corresponding to the Class C Interest that
receives such payment has a Weighted Average Adjusted Net Mortgage Rate below
the Weighted Average Adjusted Net Mortgage Rate of the Loan Group making the
payment, then the payment will be treated by Sub-WAC REMIC as a Realized
Loss. Conversely, if a Loan Group corresponding to the Class
C Interest that receives such payment has a Weighted Average Adjusted Net
Mortgage Rate above the Weighted Average Adjusted Net Mortgage Rate of the
Loan
Group making the payment, then the payment will be treated by Sub-WAC REMIC
as a
reimbursement for prior Realized Losses.
3
The
following table specifies the class designation, interest rate, and principal
amount for each class of Strip REMIC Interest:
|
Strip
REMIC Interest
|
Initial
Principal Balance
|
Interest
Rate
|
Corresponding
Certificates
|
|
ST-1-A
|
$136,150,000.00
|
(1)
|
Class
1-A
|
|
ST-2-A-1
|
$80,525,000.00
|
(2)
|
Class
0-X-0
|
|
XX-0-X-0
|
$2,150,000.00
|
(2)
|
Class
0-X-0
|
|
XX-0-X-0
|
$182,679,000.00
|
(3)
|
Class
0-X-0
|
|
XX-0-X-0
|
$4,876,000.00
|
(3)
|
Class
0-X-0
|
|
XX-0-X-0
|
$115,325,000.00
|
(4)
|
Class
0-X-0
|
|
XX-0-X-0
|
$3,079,000.00
|
(4)
|
Class
0-X-0
|
|
XX-0-X-0
|
$54,885,000.00
|
(5)
|
Class
0-X-0
|
|
XX-0-X-0
|
$1,465,000.00
|
(5)
|
Class
0-X-0
|
|
XX-x00-XX
|
$50.00
|
(1)
|
Class
A-UR
|
|
ST-B-1
|
$7,160,000.00
|
(6)
|
Class
B-1
|
|
ST-B-2
|
$2,984,000.00
|
(6)
|
Class
B-2
|
|
ST-B-3
|
$1,790,000.00
|
(6)
|
Class
B-3
|
|
ST-B-4
|
$1,789,000.00
|
(6)
|
Class
B-4
|
|
ST-B-5
|
$895,000.00
|
(6)
|
Class
B-5
|
|
ST-B-6
|
$895,901.64
|
(6)
|
Class
B-6
|
|
ST-A-UR
|
(7)
|
(7)
|
N/A
|
_____________________
(1) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Weighted Average Adjusted Net Mortgage Rate of the Group 1 Mortgage
Loans.
(2) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Weighted Average Adjusted Net Mortgage Rate of the Group 2 Mortgage
Loans.
(3) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Weighted Average Adjusted Net Mortgage Rate of the Group 3 Mortgage
Loans.
(4) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Weighted Average Adjusted Net Mortgage Rate of the Group 4 Mortgage
Loans.
(5) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Weighted Average Adjusted Net Mortgage Rate of the Group 5 Mortgage
Loans.
4
(6) The
interest rate with respect to any Distribution Date (and the related Interest
Accrual Period) for this Strip REMIC Interest is a per annum rate equal to
the
Subordinate Pass-Through Rate.
(7) The
Class ST-A-UR Interest is the sole class of residual interest in Sub-WAC
REMIC. It has no principal balance and pays no principal or
interest.
On
each
Distribution Date, the Available Funds shall be distributed with respect to
the
Subsidiary REMIC interests in the following manner:
(1) Interest
is to be distributed with respect to each Strip REMIC Interest at the rate,
or
according to the formulas, described above; and
(2) Principal
is to be distributed with respect to each Strip REMIC Interest in the same
manner and in the same amount as principal is distributed with respect to each
Strip REMIC Interest’s Corresponding Class or Classes of
Certificates.
On
each
Distribution Date, realized losses (and increases in principal balances
attributable to subsequent recoveries) shall be allocated among the Strip REMIC
Interests in the same manner that realized losses (and increases in Class
Certificate Balances attributable to subsequent recoveries) are allocated among
each Strip REMIC Interest’s Corresponding Class or Classes of
Certificates.
5
Master
REMIC:
The
following table sets forth characteristics of the Certificates, together with
the minimum denominations and integral multiples in excess thereof in which
such
Classes shall be issuable (except that one Certificate of each Class of
Certificates may be issued in a different amount):
|
Class
|
Initial
Certificate Principal Balance
|
Initial
Pass-Through Rate
|
Minimum
Denomination
|
Integral
Multiples
in
Excess of Minimum
|
|
Class
1-A
|
$136,150,000.00
|
4.9701%
(1)
|
$25,000
|
$1
|
|
Class
2-A-1
|
$80,525,000.00
|
4.7935%
(2)
|
$25,000
|
$1
|
|
Class
2-A-2
|
$2,150,000.00
|
4.7935%
(2)
|
$25,000
|
$1
|
|
Class
3-A-1
|
$182,679,000.00
|
5.0056%
(3)
|
$25,000
|
$1
|
|
Class
3-A-2
|
$4,876,000.00
|
5.0056%
(3)
|
$25,000
|
$1
|
|
Class
4-A-1
|
$115,325,000.00
|
5.0171%(4)
|
$25,000
|
$1
|
|
Class
4-A-2
|
$3,079,000.00
|
5.0171%(4)
|
$25,000
|
$1
|
|
Class
5-A-1
|
$54,885,000.00
|
4.8634%(5)
|
$25,000
|
$1
|
|
Class
5-A-2
|
$1,465,000.00
|
4.8634%(5)
|
$25,000
|
$1
|
|
Class
A-UR
|
$50
|
4.9701%(6)
|
100%
|
$1
|
|
Class
B-1
|
$7,160,000.00
|
4.9557%(7)
|
$25,000
|
$1
|
|
Class
B-2
|
$2,984,000.00
|
4.9557%(7)
|
$25,000
|
$1
|
|
Class
B-3
|
$1,790,000.00
|
4.9557%(7)
|
$25,000
|
$1
|
|
Class
B-4
|
$1,789,000.00
|
4.9557%(7)
|
$25,000
|
$1
|
|
Class
B-5
|
$895,000.00
|
4.9557%(7)
|
$25,000
|
$1
|
|
Class
B-6
|
$895,901.64
|
4.9557%(7)
|
$25,000
|
$1
|
___________
(1) The
pass-through rate for the Class 1-A certificates for the interest accrual period
related to each Distribution Date will equal the Weighted Average Net Mortgage
Rate of Loan Group 1. The pass-through rate for those certificates
for the interest accrual period related to the first Distribution Date is
expected to be 4.9701% per annum.
(2) The
pass-through rate for the Class 2-A-1 and Class 2-A-2 certificates for the
interest accrual period related to each Distribution Date will equal the
Weighted Average Net Mortgage Rate of Loan Group 2. The pass-through
rate for those certificates for the interest accrual period related to the
first
Distribution Date is expected to be 4.7935% per annum.
(3) The
pass-through rate for the Class 3-A-1 and Class 3-A-2 certificates for the
interest accrual period related to each Distribution Date will equal the
Weighted Average Net Mortgage Rate of Loan Group 3. The pass-through
rate for those certificates for the interest accrual period related to the
first
Distribution Date is expected to be 5.0056% per annum.
6
(4) The
pass-through rate for the Class 4-A-1 and Class 4-A-2 certificates for the
interest accrual period related to each Distribution Date will equal the
Weighted Average Net Mortgage Rate of Loan Group 4. The pass-through
rate for those certificates for the interest accrual period related to the
first
Distribution Date is expected to be 5.0171% per annum.
(5) The
pass-through rate for the Class 5-A-1 and Class 5-A-2 certificates for the
interest accrual period related to each Distribution Date will equal the
Weighted Average Net Mortgage Rate of Loan Group 5. The pass-through
rate for those certificates for the interest accrual period related to the
first
Distribution Date is expected to be 4.8634% per annum.
(6) The
Class A-UR certificate will be the sole class of residual interests in the
Master REMIC.
(7) For
the interest accrual period for any distribution date, the pass-through rate
for
each class of subordinated certificates will be the Subordinate Pass-Through
Rate, which will be equal to (i) the sum of the following for each loan group:
the product of (x) the weighted average adjusted net mortgage rate of the loans
in that loan group as of the first day of the prior calendar month and (y)
the
aggregate stated principal balance of the mortgage loans in that loan group
as
of the first day of the related due period, minus the aggregate certificate
principal balance of the senior certificates related to that loan group
immediately prior to that distribution date, divided by (ii) the aggregate
certificate principal balance of the subordinated certificates immediately
prior
to that distribution date.
The
foregoing REMIC structure is intended to cause all of the cash from the Mortgage
Loans to flow through to the Master REMIC as cash flow on a REMIC regular
interest, without creating any shortfall—actual or potential (other than for
credit losses)—to any REMIC regular interest.
7
Set
forth
below are designations of Classes of Certificates to the categories used
herein:
|
Book-Entry
Certificates
|
All
Classes of Offered Certificates other than the Physical
Certificates.
|
|
ERISA-Restricted
Classes
|
The
Residual Certificates and the Private Certificates, and any Certificates
that do not satisfy the applicable ratings requirement under the
Underwriter’s Exemption.
|
|
Group
1 Certificates
|
The
Class 1-A, Class A-LR and Class A-UR Certificates.
|
|
Group
2 Certificates
|
The
Class 2-A-1 and Class 2-A-2 Certificates.
|
|
Group
3 Certificates
|
The
Class 3-A-1 and Class 3-A-2 Certificates.
|
|
Group
4 Certificates
|
The
Class 4-A-1 and Class 4-A-2 Certificates.
|
|
Group
5 Certificates
|
The
Class 5-A-1 and Class 5-A-2 Certificates.
|
|
Interest
Only Certificates
|
Not
applicable.
|
|
Offered
Certificates
|
All
Classes of Certificates other than the Private
Certificates.
|
|
Physical
Certificates
|
The
Private Certificates and the Residual Certificates.
|
|
Private
Certificates
|
The
Class B-4, Class B-5 and Class B-6 Certificates.
|
|
Rating
Agencies
|
S&P
and Fitch.
|
|
Regular
Certificates
|
The
Certificates, other than the Residual Certificates.
|
|
Residual
Certificates
|
The
Class A-LR and Class A-UR Certificates.
|
|
Senior
Certificates
|
The
Group 1, Group 2, Group 3, Group 4, Group 5, Class A-LR and Class
A-UR
Certificates.
|
|
Subordinate
Certificates
|
The
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6
Certificates.
|
Defined
terms and provisions herein relating to statistical rating agencies not
designated above as Rating Agencies shall be of no force or effect.
8
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions.
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
10-K
Filing Deadline: As defined in Section 9.12.
Accountant’s
Attestation: As defined in Section 3.22(b)(i).
Accrued
Certificate Interest: With respect to any Distribution Date and
any interest bearing Class of Certificates, the sum of (i) one month’s interest
accrued during the related Interest Accrual Period at the Pass-Through Rate
for
such Class on the related Certificate Principal Balance subject to reduction
as
provided in Section 4.02(b) plus (ii) any Class Unpaid Interest Amounts for
such
Class.
Additional
Form 10-D Disclosure: As defined in Section 9.12.
Additional
Form 10-K Disclosure: As defined in Section 9.12.
Additional
Servicer: Each Affiliate of the Servicer that services any of the
Mortgage Loans and each person that is not an Affiliate of the Servicer that
services 10% or more of the Mortgage Loans.
Adjusted
Net Mortgage Rate: As to each Mortgage Loan and any Distribution
Date, the per annum rate equal to the Net Mortgage Rate of that Mortgage Loan
(as of the Due Date in the month preceding the month in which such Distribution
Date occurs).
Adjustment
Amount: With respect to the Special Hazard Loss Coverage Amount
and, with respect to each anniversary of July 1, 2007, the amount, if any,
by
which the Special Hazard Loss Coverage Amount (without giving effect to the
deduction of the Adjustment Amount for such anniversary) exceeds the greatest
of
(x) the product of 1% and the outstanding principal balance of all the
Mortgage Loans on the Distribution Date immediately preceding such anniversary,
(y) the outstanding principal balance of Mortgage Loans secured by
Mortgaged Properties in the highest California zip code concentration on the
Distribution Date immediately preceding such anniversary, and (z) twice the
outstanding principal balance of the Mortgage Loan which has the largest
outstanding principal balance on the Distribution Date immediately preceding
such anniversary.
Advance: An
advance of principal or interest required to be made by the Servicer pursuant
to
the Servicing Agreement or required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.01.
9
Affiliate: When
used with reference to a specified Person, another Person that (i) directly
or
indirectly controls or is controlled by or is under common control with the
specified Person, (ii) is an officer of, partner in or trustee of, or serves
in
a similar capacity with respect to, the specified Person or of which the
specified Person is an officer, partner or trustee, or with respect to which
the
specified Person serves in a similar capacity, or (iii) directly or indirectly
is the beneficial owner of 10% or more of any class of equity securities of
the
specified Person or of which the specified Person is directly or indirectly
the
owner of 10% or more of any class of equity securities.
Aggregate
Pool Principal Balance: As to any Distribution Date, the
aggregate of the Scheduled Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month
of
such Distribution Date.
Aggregate
Subordinate Optimal Principal Amount: For any Distribution Date,
the sum of the Subordinate Optimal Principal Amounts for each Loan
Group.
Aggregate
Subordinate Percentage: With respect to the Subordinate
Certificates and as of any Distribution Date, the aggregate Certificate
Principal Balance for the Subordinate Certificates divided by the
Aggregate Pool Principal Balance.
Agreement: This
Pooling and Servicing Agreement and all amendments or supplements
hereto.
Allocable
Share: For any Distribution Date and with respect to each Class
of Subordinate Certificates, the portion of the Aggregate Subordinate Optimal
Principal Amount allocable to such Class, equal to the product of the Aggregate
Subordinate Optimal Principal Amount on such Distribution Date and a fraction,
the numerator of which is the related Certificate Principal Balance thereof
and
the denominator of which is the aggregate of the Certificate Principal Balances
of the Subordinate Certificates.
Amount
Available for Group 1 Principal: As to any Distribution Date,
Group 1 Available Funds for such Distribution Date reduced by the aggregate
amount distributable on such Distribution Date in respect of interest on the
Group 1 Certificates pursuant to Section 4.02(a)(i) priority first
sub-clause (A).
Amount
Available for Group 2 Principal: As to any Distribution Date,
Group 2 Available Funds for such Distribution Date reduced by the aggregate
amount distributable on such Distribution Date in respect of interest on the
Group 2 Certificates pursuant to Section 4.02(a)(i) priority first
sub-clause (B).
Amount
Available for Group 3 Principal: As to any Distribution Date,
Group 3 Available Funds for such Distribution Date reduced by the aggregate
amount distributable on such Distribution Date in respect of interest on the
Group 3 Certificates pursuant to Section 4.02(a)(i) priority first
sub-clause (C).
Amount
Available for Group 4 Principal: As to any Distribution Date,
Group 4 Available Funds for such Distribution Date reduced by the aggregate
amount distributable on such Distribution Date in respect of interest on the
Group 4 Certificates pursuant to Section 4.02(a)(i) priority first
sub-clause (D).
10
Amount
Available for Group 5 Principal: As to any Distribution Date,
Group 5 Available Funds for such Distribution Date reduced by the aggregate
amount distributable on such Distribution Date in respect of interest on the
Group 5 Certificates pursuant to Section 4.02(a)(i) priority first
sub-clause (E).
Amount
Held for Future Distribution: As to any related Distribution Date
and any Mortgage Loan or Loan Group, the aggregate amount held in the Collection
Account at the close of business on the Servicer Remittance Date with respect
to
such Mortgage Loan or Loan Group on account of (i) Principal Prepayments
received after the related Prepayment Period, Liquidation Proceeds and Insurance
Proceeds received in the month of such Distribution Date and (ii) all Scheduled
Payments due after the related Due Date.
Annual
Statement of Compliance: As defined in Section
3.21(a).
Apportioned
Subordinate Principal Distribution Amount: For any Distribution
Date and the Subordinate Certificates, the product of (i) the Subordinate
Principal Distribution Amount for the Subordinate Certificates and (ii) the
Apportionment Fraction.
Apportionment
Fraction: With respect to the Subordinate Certificates and for
any Distribution Date, in the event that the Certificate Principal Balances
of
the Senior Certificates of any Certificate Group have been reduced to zero,
a
fraction, the numerator of which is equal to the Subordinate Optimal Principal
Amount of the Loan Group related to such Certificate Group, and the denominator
of which is equal to the Aggregate Subordinate Optimal Principal
Amount.
Appraised
Value: With respect to any Mortgage Loan, the Appraised Value of
the related Mortgaged Property shall be: (i) with respect to a
Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a) the
value of the Mortgaged Property based upon the appraisal made at the time of
the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; and (ii) with
respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such Refinancing
Mortgage Loan as modified by an updated appraisal.
Assessment
of Compliance: As defined in Section 3.22(a)(i).
Assignment: An
individual assignment of a 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 of record the sale or transfer
of the Mortgage Loan.
Assignment
Agreement: The Reconstituted Purchase, Warranties and Servicing
Agreement, dated as of July 17, 2007, among SunTrust, the Depositor and the
Trustee, whereby the SunTrust recognized the transfer of the Mortgage Loans
from
the Depositor to the Trustee and the SunTrust Servicing Agreement, to the extent
it relates to the servicing of the Mortgage Loans, was amended for the benefit
of the Certificateholders.
11
Assignment
of Proprietary Lease: With respect to a Cooperative Loan, the
assignment or mortgage of the related Proprietary Lease from the Mortgagor
to
the originator of the Cooperative Loan.
Back-Up
Certification: As defined in Section 9.12.
Bankruptcy
Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy
Coverage Termination Date: With respect to any Loan Group, the
point in time at which the Bankruptcy Loss Coverage Amount is reduced to
zero.
Bankruptcy
Loss: With respect to any Mortgage Loan, a Deficient Valuation or
Debt Service Reduction as reported by the Servicer to the Master Servicer;
provided, however, that a Bankruptcy Loss shall not be deemed a
Bankruptcy Loss hereunder so long as the Master Servicer has notified the
Trustee in writing that either the Master Servicer or the Servicer is diligently
pursuing any remedies that may exist in connection with the related Mortgage
Loan and either (A) the related Mortgage Loan is not in default with regard
to
payments due thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any related escrow payments in respect
of
such Mortgage Loan are being advanced on a current basis by either the Master
Servicer or the Servicer, in either case without giving effect to any Debt
Service Reduction or Deficient Valuation.
Bankruptcy
Loss Coverage Amount: With respect to any Distribution Date, the
Bankruptcy Loss Coverage Amount shall equal the related Initial Bankruptcy
Coverage Amount as reduced by (i) the aggregate amount of Bankruptcy Losses
relating to the Mortgage Loans since July 1, 2007 and (ii) any permissible
reductions in the Bankruptcy Loss Coverage Amount as evidenced by a letter
of
each Rating Agency to the Trust Administrator to the effect that any such
reduction or modification will not adversely affect the then current ratings
assigned to the Senior Certificates rated by it.
Book-Entry
Certificates: As specified in the Preliminary
Statement.
Business
Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the City of New York, New York, Minnesota,
Maryland, Virginia or any city in which the Corporate Trust Office of the
Trustee or Trust Administrator is located are authorized or obligated by law
or
executive order to be closed.
Calculation
Rate: For each Distribution Date, in the case of the Class A and
Class B Sub-WAC REMIC Interests, the product of (i) 10 and (ii) the weighted
average rate of the outstanding Class A and Class B Interests, treating each
Class A Interest as having an interest rate of 0.00%.
12
Certificate: Any
one of the Certificates executed by the Trust Administrator on behalf of the
Issuing Entity and authenticated by the Trust Administrator in substantially
the
forms attached hereto as Exhibits C through F.
Certificate
Group: Any of the Group 1, Group 2, Group 3, Group 4 or Group 5
Certificates, as applicable.
Certificate
Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.
Certificate
Principal Balance: With respect to any Certificate 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 the sum of (i) all distributions of principal previously made
with respect thereto and (ii) all Realized Losses allocated thereto and, in
the
case of any Subordinate Certificates, all other reductions in Certificate
Principal Balance previously allocated thereto pursuant to Section 4.03;
provided, however, that pursuant to Section 4.03(d), the
Certificate Principal Balance of a Class of Certificates may be increased up
to
the amount of Realized Losses previously allocated to such Class in the event
that there is a Recovery on a related Mortgage Loan, and the Certificate
Principal Balance of any individual Certificate of such Class will be increased
by its pro rata share of the increase to such Class.
Certificate
Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder
or Holder: The person in whose name a Certificate is registered
in the Certificate Register, except that, solely for the purpose of giving
any
consent pursuant to this Agreement, any Certificate registered in the name
of
the Transferor, the Master Servicer or the Depositor or any affiliate of the
Transferor, the Master Servicer or the Depositor, as applicable, shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided,
however, that if any such Person (including the Master Servicer or
the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action
hereunder. The Trust Administrator is entitled to rely conclusively
on a certification of the Master Servicer or the Depositor or any affiliate
of
the Master Servicer or the Depositor, as applicable, in determining which
Certificates are registered in the name of an affiliate of the Master Servicer
or the Depositor.
Certification
Parties: As defined in Section 9.12.
Certifying
Person: As defined in Section 9.12.
Class: All
Certificates bearing the same class designation as set forth in the Preliminary
Statement.
Class
Interest Shortfall: As to any Distribution Date and any
interest-bearing Class of Certificates, the amount by which the amount described
in clause (i) of the definition of “Accrued Certificate Interest” for such Class
exceeds the amount of interest actually distributed on such Class on such
Distribution Date pursuant to such clause (i).
13
Class
Principal Balance: With respect to any Class of Certificates and
as to any date of determination, the aggregate of the Certificate Principal
Balances of all Certificates of such Class as of such date.
Class
Prepayment Distribution Trigger: This trigger is satisfied with
respect to any Class of Subordinate Certificates and any Distribution Date,
if
either (i) the fraction, the numerator of which is the aggregate Certificate
Principal Balance of such Class and each Class of Subordinate Certificates
subordinate thereto, immediately prior to such Distribution Date, and the
denominator of which is the Aggregate Pool Principal Balance with respect to
that Distribution Date, equals or exceeds such percentage calculated as of
the
Closing Date or (ii) such Class of Subordinate Certificates is the only Class
of
Subordinate Certificates then outstanding.
Class
Unpaid Interest Amounts: As to any Distribution Date and any
interest-bearing Class of Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to clause
(ii) of the definition of “Accrued Certificate Interest” for such
Class.
Clean-up
Call Mortgage Loan Price: With respect to each Mortgage Loan (not
including REO Properties) to be purchased pursuant to Section 10.01(a), the
greater of (x) the Par Call Price for such Mortgage Loan and (y) the Fair Market
Value Call Price for such Mortgage Loan.
Clean-up
Call REO Property Price: With respect to each REO Property to be
purchased pursuant to Section 10.01(a), the lesser of (x) the appraised value
of
such REO Property as determined by the higher of two appraisals completed by
two
independent appraisers selected by the Master Servicer at the expense of the
Master Servicer and (y) the unpaid principal balance of each Mortgage Loan
related to such REO Property plus accrued and unpaid interest thereon at the
applicable Net Mortgage Rate.
Closing
Date: July 17, 2007.
Code: The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Collection
Account: The separate Eligible Account or Accounts created and
maintained by the Master Servicer pursuant to Section 3.07 with a depository
institution in the name of the Master Servicer for the benefit of the Trustee
on
behalf of Certificateholders and designated “Xxxxx Fargo Bank, N.A., as Master
Servicer for the benefit of U.S. Bank National Association, in trust for the
registered Holders of STARM Mortgage Loan Trust 2007-S1, Mortgage Pass-Through
Certificates Series 2007-S1”. The Collection Account may be deemed to
be a sub-account of the Distribution Account.
14
Commission: The
U.S. Securities and Exchange Commission.
Compensating
Interest: With respect to any Distribution Date and the Servicer,
the amount required to be paid by the Servicer under the Servicing Agreement
in
connection with Prepayment Interest Shortfalls that occur on Mortgage Loans
serviced by the Servicer for the related Distribution Date. If the
Servicer fails to make its required payment of Compensating Interest on any
Distribution Date, the Master Servicer will be required to make such payment
of
Compensating Interest to the same extent that the Servicer was required to
make
such payment of Compensating Interest.
Cooperative
Corporation: With respect to any Cooperative Loan, the cooperative apartment
corporation that holds legal title to the related Cooperative Property and
grants occupancy rights to units therein to stockholders through Proprietary
Leases or similar arrangements.
Cooperative
Lien Search: A search for (a) federal tax liens, mechanics’
liens, lis pendens, judgments of record or otherwise against (i) the Cooperative
Corporation and (ii) the seller of the Cooperative Unit, (b) filings of
Financing Statements and (c) the deed of the Cooperative Property into the
Cooperative Corporation.
Cooperative
Loan: A Mortgage Loan that is secured by a first lien on and a
perfected security interest in Cooperative Shares and the related Proprietary
Lease granting exclusive rights to occupy the related Cooperative Unit in the
building owned by the related Cooperative Corporation.
Cooperative
Property: With respect to any Cooperative Loan, all real property
and improvements thereto and rights therein and thereto owned by a Cooperative
Corporation including without limitation the land, separate dwelling units
and
all common elements.
Cooperative
Shares: With respect to any Cooperative Loan, the shares of stock
issued by a Cooperative Corporation and allocated to a Cooperative Unit and
represented by stock certificates.
Cooperative
Unit: With respect to any Cooperative Loan, a specific unit in a
Cooperative Property.
Corporate
Trust Office: With respect to the Trustee, the designated office
of the Trustee at which at any particular time its corporate trust business
with
respect to this Agreement shall be administered, which office at the date of
the
execution of this Agreement is located at EP-MN-WS3D, 00 Xxxxxxxxxx Xxxxxx,
Xx.
Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance—STARM Mortgage Loan Trust
2007-S1, which is the address to which appropriate notices to and correspondence
with the Trustee should be directed.
With
respect to the Trust Administrator, the designated office of the Trust
Administrator at which at any particular time its corporate trust business
with
respect to this Agreement shall be administered, which office at the date of
the
execution of this Agreement is located for certificate transfer purposes at
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust Services—STARM 2007-S1, and for all other purposes at 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Manager—STARM
2007-S1.
15
Covered
Loan: A Mortgage Loan categorized as Covered pursuant to Appendix
E of Standard & Poor’s Glossary.
Cross-Over
Date: The Distribution Date on which the aggregate Certificate
Principal Balance of the Subordinate Certificates has been reduced to
zero.
Cross-Over
Situation: For any Distribution Date and for each Loan Group
(after taking into account principal distributions on such Distribution Date)
with respect to the Class A and Class B Sub-WAC REMIC Interests, a situation
in
which the Class A and Class B Interests corresponding to any Loan Group are
in
the aggregate less than 1% of the Subordinated Portion of the Loan Group to
which they correspond.
Custodian: SunTrust
Bank, and any successor thereto appointed hereunder.
Cut-off
Date: July 1, 2007.
Cut-off
Date Pool Balance: $596,648,002.
Cut-off
Date Principal Balance: As to any Mortgage Loan, the Scheduled
Principal Balance thereof as of the close of business on the Cut-off
Date.
Debt
Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the 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.
Deficient
Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less
than
the then outstanding indebtedness under the Mortgage Loan, or any reduction
in
the amount of principal to be paid in connection with any Scheduled Payment
that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court which is final and non-appealable in a
proceeding under the 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).
Deleted
Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Denomination: With
respect to each Certificate, the amount set forth on the face thereof as the
“Initial Certificate Principal Balance of this Certificate” or, if not the
foregoing, the Percentage Interest appearing on the face thereof.
16
Depositor: Mortgage
Asset Securitization Transactions, Inc., a Delaware corporation, or its
successor 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
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: The date on which the Servicer is required to determine the
amount it is required to advance pursuant to the Servicing
Agreement.
Distribution
Account: The separate Eligible Account created and maintained by
the Trust Administrator pursuant to Section 3.07 in the name of the Trust
Administrator for the benefit of the Certificateholders and designated “Xxxxx
Fargo Bank, N.A., as Trust Administrator in trust for the registered Holders
of
STARM Mortgage Loan Trust 2007-S1, Mortgage Pass-Through Certificates, Series
2007-S1.” 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, one Business
Day prior to such Distribution Date.
Distribution
Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in August 2007.
Distribution
Date Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
Due
Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution Date occurs.
Eligible
Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest short
term ratings of each Rating Agency at the time any amounts are held on deposit
therein (provided, that if such rating falls below “A-2” by S&P, funds in
such account shall be transferred to an otherwise Eligible Account pursuant
to
Section 3.07(e)), or, or (ii) a non-interest bearing segregated trust account
or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a trust company, acting in its fiduciary
capacity (provided, that if such rating falls below the highest short-term
rating by such Rating Agency, funds in such account shall be transferred to
an
otherwise Eligible Account pursuant to Section 3.07(e)) or (iii) any other
account acceptable to each Rating Agency, as stated by each such Rating Agency
in writing. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trust
Administrator.
17
Eligible
Substitute Mortgage Loan: With respect to a Mortgage Loan
substituted by the Transferor for a Deleted Mortgage Loan, a Mortgage Loan
which
must, on the date of such substitution, (i) have a Scheduled Principal Balance,
after deduction of the principal portion of the Scheduled Payment 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, and not more than 10% less than the Scheduled Principal Balance
of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than
and
not more than 1% per annum higher than that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; (v) comply with each
representation and warranty set forth in Section 2.04 hereof; (vi) be the same
credit grade category as the Deleted Mortgage Loan; (vii) have the same
prepayment penalty term; and (viii) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative Loan.
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 (without regard
to
the ratings requirements) of an Underwriter’s Exemption.
ERISA-Restricted
Certificate: As specified in the Preliminary
Statement.
Escrow
Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.08 hereof.
Excess
Loss: With respect to any Mortgage Loan, the amount of any (i)
Fraud Loss realized after the Fraud Loss Coverage Termination Date, (ii) Special
Hazard Loss realized after the Special Hazard Coverage Termination Date or
(iii)
Deficient Valuation realized after the Bankruptcy Coverage Termination
Date.
Excess
Proceeds: With respect to any Liquidated Loan, the amount, if
any, by which the sum of any Liquidation Proceeds of such Mortgage Loan received
in the calendar month in which such Mortgage Loan became a Liquidated Loan,
exceeds (i) the Scheduled Principal Balance of such Liquidated Loan as of the
Due Date in the month in which such Mortgage Loan became a Liquidated Loan
plus (ii) accrued interest at the Mortgage Rate from the Due Date as
to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date applicable to the Distribution Date
immediately following the calendar month during which such liquidation
occurred.
Exchange
Act: The Securities Exchange Act of 1934, as amended from time to
time, and the rules and regulations promulgated thereunder.
Fair
Market Value Call Price: With respect to each Mortgage Loan (not
including REO Properties) to be purchased pursuant to Section 10.01(a) hereof,
the fair market value of such Mortgage Loan (to be determined pursuant to a
bid
procedure set forth in Section 10.01(b) hereof) plus accrued and unpaid interest
thereon at the applicable Net Mortgage Rate.
18
Fair
Market Value Excess: With respect to each Mortgage Loan to be
purchased pursuant to Section 10.01(a) hereof, the excess, if any, of the Fair
Market Value Call Price for such Mortgage Loan, over the Par Call Price for
such
Mortgage Loan. Any Fair Market Value Excess will not become part of the Group
1
Available Funds, Group 2 Available Funds, Group 3 Available Funds, Group 4
Available Funds or Group 5 Available Funds, but shall instead be distributed
directly to the Holders of the Class A-LR Certificates pursuant to Section
4.02(h) hereof.
Xxxxxx
Xxx: Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor thereto.
Final
Certification: The certification required to be delivered by the
Custodian not later than 90 days after the Closing Date to the Depositor, the
Trustee and the Transferor in the form annexed hereto as Exhibit H pursuant
to
Section 2.02 of this Agreement.
Final
Scheduled Distribution Date: The Distribution Date in January
2037.
Financing
Statement: A financing statement in the form of a UCC-1 or UCC-3,
as applicable, filed pursuant to the Uniform Commercial Code to perfect a
security interest in the Cooperative Shares and Pledge Instruments.
Fitch: Fitch,
Inc., or any successor thereto. If Fitch is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 11.05(b), the
address for notices to Fitch shall be Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX
00000, Attention: MBS Monitoring STARM Mortgage Loan Trust 2007-S1,
or such other address as Fitch may hereafter furnish to each party to this
Agreement.
Form
8-K Disclosure Information: As defined in Section
9.12.
Fraud
Loan: A Liquidated Loan as to which a Fraud Loss has
occurred.
Fraud
Loss Coverage Amount: As of the Closing Date, $5,966,480.01
subject to reduction from time to time by the aggregate amount of Fraud Losses
that would have been previously allocated to the Subordinate Certificates in
the
absence of the Loss Allocation Limitation since the Cut-off Date. In
addition, such Fraud Loss Coverage Amount will be reduced on August 1, 2010,
to
an amount equal to $2,983,240.01 less the aggregate amount of Fraud Losses
that
would have been previously allocated to the Subordinate Certificates in the
absence of the Loss Allocation Limitation since the Cut-off Date and (c) after
the earlier to occur of the Cross-Over Date and August 1, 2012, to
zero.
19
Fraud
Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud
Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a
loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation as reported by the
Servicer to the Master Servicer.
Xxxxxxx
Mac: Xxxxxxx Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act
of
1970, as amended, or any successor thereto.
Group
1 Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Collection Account at the close of business
on
the Servicer Remittance Date and, without duplication, on deposit in the
Distribution Account at the close of business of the related Distribution
Account Deposit Date, attributable to the Group 1 Mortgage Loans net of (i)
the
Amount Held for Future Distribution related to the Group 1 Mortgage Loans,
(ii)
amounts related to the Group 1 Mortgage Loans permitted to be withdrawn from
the
Collection Account pursuant to clauses (i)-(viii) inclusive and clauses
(ix)(a)(ii), (x) and (xi) of Section 3.10(a), (iii) after giving effect to
all
amounts deposited to the Distribution Account from the Collection Account,
amounts related to each of the Group 1 Mortgage Loans permitted to be withdrawn
from the Distribution Account pursuant to clauses (i)-(iv) inclusive of Section
3.10(b) each as it relates to the Applicable Fraction of each of the Group
1
Mortgage Loans, and (iv) any amounts representing Fair Market Value Excess
with
respect to the Applicable Fraction of each Group 1 Mortgage Loan received in
connection with the termination of the Trust Fund pursuant to Section 10.01
hereof, (b) the amount of the related Advances related to the Applicable
Fraction of each of the Group 1 Mortgage Loans and (c) in connection with each
Deleted Mortgage Loan in Loan Group 1, the Purchase Price and Substitution
Adjustment Amount of each such Mortgage Loan to be deposited on the related
Distribution Account Deposit Date.
Group
1 Certificates: As specified in the Preliminary
Statement.
Group
1 Mortgage Loans: The Mortgage Loans in Loan Group
1.
Group
1 Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balance of each Group 1 Mortgage Loan which was
an
Outstanding Mortgage Loan on the Due Date in the month preceding the month
of
such Distribution Date.
Group
1 Subordinate Amount: As to any Distribution Date, the excess of
(i) the sum of the Scheduled Principal Balance of each of the Group 1 Mortgage
Loans over (ii) the Certificate Principal Balance of the Group 1
Certificates.
Group
2 Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Collection Account at the close of business
on
the Servicer Remittance Date and, without duplication, on deposit in the
Distribution Account at the close of business of the related Distribution
Account Deposit Date, attributable to each of the Group 2 Mortgage Loans net
of
(i) the Amount Held for Future Distribution related to the Group 2 Mortgage
Loans, (ii) amounts related to the Group 2 Mortgage Loans permitted to be
withdrawn from the Collection Account pursuant to clauses (i)-(viii) inclusive
and clauses (ix)(a)(ii), (x) and (xi) of Section 3.10(a), (iii) after giving
effect to all amounts deposited to the Distribution Account from the Collection
Account, amounts related to each of the Group 2 Mortgage Loans permitted to
be
withdrawn from the Distribution Account pursuant to clauses (i)-(iv) inclusive
of Section 3.10(b) each as it relates to each of the Group 2 Mortgage Loans,
and
(iv) any amounts representing Fair Market Value Excess with respect to each
Group 2 Mortgage Loan received in connection with the termination of the Trust
Fund pursuant to Section 10.01 hereof, (b) the amount of the related Advances
related to each of the Group 2 Mortgage Loans and (c) in connection with each
Deleted Mortgage Loan in Loan Group 2, the Purchase Price and Substitution
Adjustment Amount of each such Mortgage required to be deposited on the related
Distribution Account Deposit Date.
20
Group
2 Certificates: As specified in the Preliminary
Statement.
Group
2 Mortgage Loans: The Mortgage Loans in Loan Group
2.
Group
2 Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balance of each Group 2 Mortgage Loan which was
an
Outstanding Mortgage Loan on the Due Date in the month preceding the month
of
such Distribution Date.
Group
2 Subordinate Amount: As to any Distribution Date, the excess of
(i) the sum of the Scheduled Principal Balance of each of the Group 2 Mortgage
Loans over (ii) the Certificate Principal Balance of the Group 2
Certificates.
Group
3 Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Collection Account at the close of business
on
the Servicer Remittance Date and, without duplication, on deposit in the
Distribution Account at the close of business of the related Distribution
Account Deposit Date, attributable to the Group 3 Mortgage Loans net of (i)
the
Amount Held for Future Distribution related to the Group 3 Mortgage Loans,
(ii)
amounts related to the Group 3 Mortgage Loans permitted to be withdrawn from
the
Collection Account pursuant to clauses (i)-(viii) inclusive and clauses
(ix)(a)(ii), (x) and (xi) of Section 3.10(a), (iii) after giving effect to
all
amounts deposited to the Distribution Account from the Collection Account,
amounts related to the Group 3 Mortgage Loans permitted to be withdrawn from
the
Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b)
each as it relates to the Group 3 Mortgage Loans, and (iv) any amounts
representing Fair Market Value Excess with respect to a Group 3 Mortgage Loan
received in connection with the termination of the Trust Fund pursuant to
Section 10.01 hereof, (b) the amount of the related Advances related to the
Group 3 Mortgage Loans and (c) in connection with any Deleted Mortgage Loan
in
Loan Group 3, the aggregate of the Purchase Price and Substitution Adjustment
Amount of each such Mortgage Loan required to be deposited on the related
Distribution Account Deposit Date.
Group
3 Certificates: As specified in the Preliminary
Statement.
21
Group
3 Mortgage Loans: The Mortgage Loans in Loan Group
3.
Group
3 Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balance of each Group 3 Mortgage Loan which was
an
Outstanding Mortgage Loan on the Due Date in the month preceding the month
of
such Distribution Date.
Group
3 Subordinate Amount: As to any Distribution Date, the excess of
(i) the aggregate Scheduled Principal Balance of each of the Group 3 Mortgage
Loans over (ii) the Certificate Principal Balance of the Group 3
Certificates.
Group
4 Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Collection Account at the close of business
on
the Servicer Remittance Date and, without duplication, on deposit in the
Distribution Account at the close of business of the related Distribution
Account Deposit Date, attributable to the Group 4 Mortgage Loans net of (i)
the
Amount Held for Future Distribution related to the Group 4 Mortgage Loans,
(ii)
amounts related to the Group 4 Mortgage Loans permitted to be withdrawn from
the
Collection Account pursuant to clauses (i)-(viii) inclusive and clauses
(ix)(a)(ii), (x) and (xi) of Section 3.10(a), (iii) after giving effect to
all
amounts deposited to the Distribution Account from the Collection Account,
amounts related to the Group 4 Mortgage Loans permitted to be withdrawn from
the
Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b)
each as it relates to the Group 4 Mortgage Loans, and (iv) any amounts
representing Fair Market Value Excess with respect to a Group 4 Mortgage Loan
received in connection with the termination of the Trust Fund pursuant to
Section 10.01 hereof, (b) the amount of the related Advances related to the
Group 4 Mortgage Loans and (c) in connection with any Deleted Mortgage Loan
in
Loan Group 4, the aggregate of the Purchase Price and Substitution Adjustment
Amount of each such Mortgage Loan required to be deposited on the related
Distribution Account Deposit Date.
Group
4 Certificates: As specified in the Preliminary
Statement.
Group
4 Mortgage Loans: The Mortgage Loans in Loan Group
4.
Group
4 Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balance of each Group 4 Mortgage Loan which was
an
Outstanding Mortgage Loan on the Due Date in the month preceding the month
of
such Distribution Date.
Group
4 Subordinate Amount: As to any Distribution Date, the excess of
(i) the aggregate Scheduled Principal Balance of each of the Group 4 Mortgage
Loans over (ii) the Certificate Principal Balance of the Group 4
Certificates.
Group
5 Available Funds: As to any Distribution Date, the sum of (a)
the aggregate amount held in the Collection Account at the close of business
on
the Servicer Remittance Date and, without duplication, on deposit in the
Distribution Account at the close of business of the related Distribution
Account Deposit Date, attributable to the Group 5 Mortgage Loans net of (i)
the
Amount Held for Future Distribution related to the Group 5 Mortgage Loans,
(ii)
amounts related to the Group 5 Mortgage Loans permitted to be withdrawn from
the
Collection Account pursuant to clauses (i)-(viii) inclusive and clauses
(ix)(a)(ii), (x) and (xi) of Section 3.10(a), (iii) after giving effect to
all
amounts deposited to the Distribution Account from the Collection Account,
amounts related to the Group 5 Mortgage Loans permitted to be withdrawn from
the
Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b)
each as it relates to the Group 5 Mortgage Loans, and (iv) any amounts
representing Fair Market Value Excess with respect to a Group 5 Mortgage Loan
received in connection with the termination of the Trust Fund pursuant to
Section 10.01 hereof, (b) the amount of the related Advances related to the
Group 5 Mortgage Loans and (c) in connection with any Deleted Mortgage Loan
in
Loan Group 5, the aggregate of the Purchase Price and Substitution Adjustment
Amount of each such Mortgage Loan required to be deposited on the related
Distribution Account Deposit Date.
22
Group
5 Certificates: As specified in the Preliminary
Statement.
Group
5 Mortgage Loans: The Mortgage Loans in Loan Group
5.
Group
5 Principal Balance: As to any Distribution Date, the aggregate
of the Scheduled Principal Balance of each Group 5 Mortgage Loan which was
an
Outstanding Mortgage Loan on the Due Date in the month preceding the month
of
such Distribution Date.
Group
5 Subordinate Amount: As to any Distribution Date, the excess of
(i) the aggregate Scheduled Principal Balance of each of the Group 5 Mortgage
Loans over (ii) the Certificate Principal Balance of the Group 5
Certificates.
Group
Available Funds: Any of the Group 1 Available Funds, Group 2
Available Funds, Group 3 Available Funds, Group 4 Available Funds or Group
5
Available Funds, as applicable.
Group
Balance: Any of the Group 1 Principal Balance, Group 2 Principal
Balance, Group 3 Principal Balance, Group 4 Principal Balance or Group 5
Principal Balance, as applicable.
Group
Subordinate Amount: Any of the Group 1 Subordinate Amount, Group
2 Subordinate Amount, Group 3 Subordinate Amount, Group 4 Subordinate Amount
or
Group 5 Subordinate Amount as applicable.
High
Cost Loan: A Mortgage Loan classified as (a) a “high cost” loan
under the Home Ownership and Equity Protection Act of 1994, (b) a “high cost
home,” “threshold,” “covered,” (excluding New Jersey “Covered Home Loans” as
that term is defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002), “high risk home,” “predatory” or
similar loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) or (c) a Mortgage
Loan categorized as High Cost pursuant to Appendix E of Standard and Poor’s
Glossary.
23
Home
Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor’s Glossary.
Independent: When
used with respect to any accountants, a Person who is “independent” within the
meaning of Rule 2-01(B) of the Commission’s Regulation S-X; when used with
respect to any other Person, a Person who (a) is in fact independent of another
specified Person and any affiliate of such other Person, (b) does not have
any
material direct or indirect financial interest in such other Person or any
affiliate of such other Person, (c) is not connected with such other Person
or
any affiliate of such other Person as an officer, employee, promoter,
underwriter, trust administrator, trustee, partner, director or Person
performing similar functions and (d) is not a member of the immediate family
of
a Person defined in clause (b) or (c) above.
Indirect
Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial
Bankruptcy Coverage Amount: $188,727.32.
Initial
Certification: The certification required to be executed by the
Custodian and delivered on the Closing Date to the Depositor and the Trustee
in
the form annexed hereto as Exhibit G pursuant to Section 2.02 of this
Agreement.
Insolvency
Proceeding: With respect to any Person: (i) any case,
action, or proceeding with respect to such Person before any court or other
governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding up, or relief of debtors; or
(ii) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect
of
the creditors generally of such Person or any substantial portion of such
Person’s creditors, in any case undertaken under federal, state or foreign law,
including the Bankruptcy Code.
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: Proceeds paid by an insurer pursuant to any Insurance
Policy, in each case other than any amount included in such Insurance Proceeds
in respect of insured expenses, to the extent such proceeds are not applied
to
the restoration of the related Mortgaged Property or released to the borrower
in
accordance with the Servicer’s normal servicing procedures.
Interest
Accrual Period: With respect to each Class of Certificates, the
Subsidiary REMIC Regular Interests, the Middle REMIC Regular Interests and
any
Distribution Date, the period from and including the first day of the month
immediately preceding the month in which such Distribution Date occurs,
commencing July 1, 2007, to and including the last day of such immediately
preceding month, on the basis of a 360-day year consisting of twelve 30-day
months.
24
Interest
Only Certificates: As specified in the Preliminary
Statement.
Issuing
Entity: As defined in Section 2.01(c).
Latest
Possible Maturity Date: The Distribution Date following the third
anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
Liquidated
Loan: With respect to any Distribution Date, a defaulted Mortgage
Loan (including any REO Property) which was liquidated in the calendar month
preceding the month of such Distribution Date and as to which the Servicer
or
the Master Servicer, as the case may be, has determined (in accordance with
the
Servicing Agreement and this Agreement) 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.
Liquidation
Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee’s sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Servicing Fees, Servicing Advances
and Advances.
Loan-to-Value
Ratio: With respect to any Mortgage Loan and as to any date of
determination, the fraction (expressed as a percentage) the numerator of which
is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property. For purposes of representation (xxxi) of Schedule
II, the Loan-to-Value Ratio will be the loan-to-value ratio calculated in
accordance with applicable state laws regarding primary mortgage
insurance.
Loan
Group: Any of Loan Group 1, Loan Group 2. Loan Group 3, Loan
Group 4 or Loan Group 5, as applicable.
Loan
Group 1: Those Mortgage Loans identified on the Mortgage Loan
Schedule as Loan Group 1 Mortgage Loans.
Loan
Group 2: Those Mortgage Loans identified on the Mortgage Loan
Schedule as Loan Group 2 Mortgage Loans.
Loan
Group 3: Those Mortgage Loans identified on the Mortgage Loan Schedule as
Loan Group 3 Mortgage Loans.
Loan
Group 4: Those Mortgage Loans identified on the Mortgage Loan Schedule as
Loan Group 4 Mortgage Loans.
Loan
Group 5: Those Mortgage Loans identified on the Mortgage Loan Schedule as
Loan Group 5 Mortgage Loans.
25
Loan
Seller: With respect to any Mortgage Loan, the entity that sold
such Mortgage Loan to the Transferor.
Loss
Allocation Limitation: As defined in Section 4.03(c)
hereof.
Lost
Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Majority
in Interest: As to any Class of Regular Certificates, the Holders
of Certificates of such Class evidencing, in the aggregate, at least 51% of
the
Percentage Interests evidenced by all Certificates of such Class.
Master
REMIC: As specified in the Preliminary Statement.
Master
Servicer: Xxxxx Fargo Bank, N.A., a national banking association,
and its successors and assigns, in its capacity as Master Servicer
hereunder.
Master
Servicer Event of Termination: As defined in Section 7.01
hereof.
Master
Servicing Compensation: For any Distribution Date, all investment
earnings on amounts on deposit in the Collection Account plus a monthly fee
of
0.0115% per annum.
Master
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and master servicing of the Mortgage
Loans.
MERS: As
defined in Section 2.01.
Moody’s: Xxxxx’x
Investors Service, Inc., or any successor thereto. If Xxxxx’x is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 11.05(b), the address for notices to Moody’s shall be Xxxxx’x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Mortgage Monitoring Group, or such other
address as Moody’s may hereafter furnish to each other party to this
Agreement.
Mortgage: The
mortgage, deed of trust or other instrument creating a first lien on an estate
in fee simple or leasehold interest in real property securing a Mortgage
Note.
Mortgage
File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Custodian to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Custodian to reflect the addition of Eligible Substitute Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions
of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Schedule I, setting
forth the following information with respect to each Mortgage
Loan: (1) the Mortgage Loan identifying number; (2) the Mortgagor’s
first and last name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) the original principal balance of the Mortgage
Loan; (5) the Scheduled Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date; (6) the unpaid principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date; (7) the last
scheduled Due Date on which a Scheduled Payment was applied to the Scheduled
Principal Balance; (8) the last Due Date on which a Scheduled Payment was
actually applied to the unpaid principal balance; (9) the Mortgage Rate in
effect immediately following origination; (10) the Mortgage Rate in effect
immediately following the Cut-off Date (if different from (9)); (11) the amount
of the Scheduled Payment at origination; (12) the amount of the Scheduled
Payment as of the Cut-off Date (if different from (11)); (13) a code indicating
whether the Mortgaged Property is owner occupied, a second home or an investor
property at origination; (14) a code indicating whether the Mortgaged Property
is a single family residence, a two-family residence, a three-family residence,
a four-family residence, a planned unit development, a condominium or a
Cooperative Unit; (15) a code indicating the loan purpose (i.e., purchase,
rate/term refinance, cash out refinance); (16) the stated maturity date; (17)
the original months to maturity; (18) the remaining months to maturity from
the
Cut-off Date based on the original amortization schedule and, if different,
the
remaining months to maturity expressed in the same manner but based on the
actual amortization schedule; (19) the origination date of the Mortgage Loan;
(20) the Loan-to-Value Ratio at origination; (21) the date on which the first
Scheduled Payment was due on the Mortgage Loan after the origination date;
(22)
a code indicating the documentation style of the Mortgage Loan; (23) a code
indicating if the Mortgage Loan is subject to a Primary Insurance Policy and,
if
so, the name of the Qualified Mortgage Insurer, the certificate number and
the
coverage amount of the Primary Insurance Policy; (24) the Servicing Fee Rate;
(25) a code indicating whether the Mortgage Loan is subject to a prepayment
penalty and, if so, the term of such prepayment penalty; (26) the credit score
(or mortgage score) of the Mortgagor; (27) the debt-to-income ratio of the
Mortgage Loan; (28) a code indicating the originator of the Mortgage Loan;
(29)
a code indicating which Loan Pool such Mortgage Loan is included in; (30) the
date on which the Loan was transferred to the Transferor; (31) the initial
Servicer; (32) a code indicating whether the Mortgage Loan is a Cooperative
Loan; and (33) a code indicating if the Mortgage Loan is subject to a
“lender-paid” Primary Insurance Policy, and if so, the name of the Qualified
Mortgage Insurer, the certificate number and the coverage amount of the Primary
Insurance Policy, and the Lender-Paid Mortgage Insurance Rate.
26
Mortgage
Loans: Such of the mortgage loans and cooperative loans
transferred and assigned to the Trustee pursuant to the provisions hereof as
from time to time are held as a part of the Trust Fund (including any REO
Property), the mortgage loans so held being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or other acquisition of title of the
related Mortgaged Property. With respect to each Mortgage Loan that
is a Cooperative Loan, if any, “Mortgage Loan” shall include, but not be limited
to, the related Mortgage Note, Security Agreement, Assignment of Proprietary
Lease, Recognition Agreement, Cooperative Shares and Proprietary Lease and,
with
respect to each Mortgage Loan other than a Cooperative Loan, “Mortgage Loan”
shall include, but not be limited to the related Mortgage and the related
Mortgage Note.
Mortgage
Note: The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
27
Mortgage
Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgaged
Property: The underlying real property securing a Mortgage Loan
or, with respect to a Cooperative Loan, the related Cooperative Shares and
Proprietary Lease.
Mortgagor: The
obligor(s) on a Mortgage Note.
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the related Servicing Fee
Rate.
Net
Prepayment Interest Shortfalls: As to any Distribution Date and
Loan Group, the amount by which the aggregate of Prepayment Interest Shortfalls
for that Loan Group during the related Prepayment Period exceeds the amount
of
Compensating Interest available to such Loan Group for such Distribution
Date.
Nonrecoverable
Advance: Any portion of an Advance previously made or proposed to
be made by the Servicer or the Master Servicer, as the case may be, that, in
the
good faith judgment of the Servicer or the Master Servicer, will not be
ultimately recoverable by the Servicer or the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice
of Final Distribution: The notice to be provided pursuant to
Section 10.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Notional
Amount: Not applicable.
Offered
Certificates: As specified in the Preliminary
Statement.
Officer’s
Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director,
a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii) if provided for
in
this Agreement, signed by a Master Servicing Officer, as the case may be, and
delivered to the Depositor, the Trustee and the Trust Administrator, as the
case
may be, as required by this Agreement.
Opinion
of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Master Servicer, including in house counsel, reasonably
acceptable to the Trustee or the Trust Administrator, as applicable;
provided, however, that, with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and the Master Servicer, (ii) not have any direct
financial interest in the Depositor or the Master Servicer or in any affiliate
of either, and (iii) not be connected with the Depositor or the Master Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director
or
person performing similar functions.
28
Optional
Termination: The termination of the Issuing Entity created
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 10.01(a) hereof.
Original
Subordinate Principal Balance: The aggregate of the Certificate
Principal Balances of the Subordinate Certificates as of the Closing
Date.
OTS: The
Office of Thrift Supervision.
Outstanding: With
respect to the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Trust Administrator or delivered to the Trust
Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have been executed
and delivered by the Trust Administrator pursuant to this
Agreement.
Outstanding
Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Scheduled Principal Balance greater than zero that was not the subject of a
Principal Prepayment in Full prior to such Due Date and that did not become
a
Liquidated 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.
Par
Call Price: With respect to each Mortgage Loan (not including REO
Properties) to be purchased pursuant to Section 10.01(a) hereof, 100% of the
unpaid principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon at the applicable Net Mortgage Rate and any unreimbursed Advances,
fees
and expenses of the Master Servicer, Trust Administrator and
Trustee.
Pass-Through
Rate: For any interest bearing Class of Certificates, the per
annum rate set forth or calculated in the manner described in the Preliminary
Statement.
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.
Permitted
Investments: At any time, any one or more of the following
obligations and securities:
(a) obligations
of the United States or any agency thereof, provided such obligations are backed
by the full faith and credit of the United States;
(b) general
obligations of or obligations guaranteed by any state of the United States
or
the District of Columbia receiving the highest long-term debt rating of each
Rating Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by either Rating
Agency;
29
(c) commercial
or finance company paper which is then receiving the highest commercial or
finance company paper rating of each Rating Agency, or such lower rating as
will
not result in the downgrading or withdrawal of the ratings then assigned to
the
Certificates by either Rating Agency;
(d) certificates
of deposit, demand or time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository institution
or
trust company are then rated in one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or such lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency;
(e) demand
or time deposits or certificates of deposit issued by any bank or trust company
or savings institution to the extent that such deposits are fully insured by
the
FDIC and are then rated in the highest long-term and the highest short-term
ratings of each Rating Agency for such securities, or such lower ratings as
will
not result in the downgrading or withdrawal of the ratings then assigned to
the
Certificates by either Rating Agency;
(f) guaranteed
reinvestment agreements issued by any bank, insurance company or other
corporation containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by either Rating Agency;
(g) repurchase
obligations with respect to any security described in clauses (a) and (b) above,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (d) above;
(h) securities
(other than stripped bonds, stripped coupons or instruments sold at a purchase
price in excess of 115% of the face amount thereof) bearing interest or sold
at
a discount issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment, have the
highest rating of each Rating Agency, or such lower rating as will not result
in
the downgrading or withdrawal of the rating then assigned to the Certificates
by
either Rating Agency, as evidenced by a signed writing delivered by each Rating
Agency;
(i) units
of a taxable money market portfolio having the highest rating assigned by each
Rating Agency and restricted to obligations issued or guaranteed by the United
States of America or entities whose obligations are backed by the full faith
and
credit of the United States of America and repurchase agreements collateralized
by such obligations;
30
(j) any
mutual fund, money market fund, common trust fund or other pooled investment
vehicle, the assets of which are limited to instruments that otherwise would
constitute Permitted Investments hereunder, including any such fund that is
managed by the Trust Administrator or Master Servicer or any affiliate of the
Trust Administrator or Master Servicer or for which the Trust Administrator
or
Master Servicer or any affiliate of the Trust Administrator or Master Servicer
acts as an adviser as long as such fund is rated in the highest rating category
by each Rating Agency, if so rated; and
(k) such
other investments bearing interest or sold at a discount acceptable to each
Rating Agency as will not result in the downgrading or withdrawal of the rating
then assigned to the Certificates by either Rating Agency, as evidenced by
a
signed writing delivered by each Rating Agency;
provided
that no instrument described hereunder shall (a) evidence either the right
to
receive only interest with respect to the obligations underlying such
instrument, (b) be sold or disposed of before its maturity or (c) be any
obligation of the Transferor or any of its Affiliates. Any Permitted
Investment shall be relatively risk free and no options or voting rights shall
be exercised with respect to any Permitted Investment. Any Permitted
Investment shall be sold or disposed of in accordance with Statement of
Financial Accounting Standards No.140, paragraph 35c(6), in effect as of the
Closing Date.
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)(l) 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
citizen or resident of the United States, a corporation, partnership (except
as
provided in applicable Treasury Regulations), or other entity created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, an estate whose income is subject to United States federal
income tax regardless of its source or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
Issuing Entity and one or more Persons described in this clause (v) have the
authority to control all substantial decisions of the Issuing Entity (or, to
the
extent provided in applicable Treasury Regulations, certain trusts in existence
on August 20, 1996 which are eligible to elect to be treated as United States
persons) unless such Person has furnished the transferor and the Trust
Administrator with a duly completed Internal Revenue Service Form W-8ECI or
any
applicable successor form, (vi) any Person with respect to whom income on any
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 Person 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 REMIC hereunder
to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms “United States,” “State” and “international
organization” shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
31
Person: Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Physical
Certificate: As specified in the Preliminary
Statement.
Pledge
Instruments: With respect to each Cooperative Loan, the Stock
Power, the Assignment of Proprietary Lease and the Security
Agreement.
Prepayment
Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment received or, in the case of partial Principal
Prepayments, applied, during the applicable Prepayment Period, the amount,
if
any, by which one month’s interest at the related Net Mortgage Rate on such
Principal Prepayment exceeds the amount of interest at the Net Mortgage Rate
paid in connection with such Principal Prepayment.
Prepayment
Period: As to any Distribution Date and any voluntary Principal
Prepayment of a Mortgage Loan, the calendar month preceding the month in which
such Distribution Date occurs.
Primary
Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal
Prepayment: Any payment of principal by a Mortgagor on a Mortgage
Loan that is received in advance of its scheduled Due Date, excluding any
prepayment penalty or premium thereon, and is not accompanied by an amount
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment. Partial Principal Prepayments
will be applied by the Servicer in accordance with the terms of the Servicing
Agreement and in accordance with the terms of the related Mortgage Note, and
to
the extent the Mortgage Note does not provide otherwise, shall be applied in
the
Prepayment Period preceding the receipt thereof.
Principal
Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
32
Principal
Relocation Payments: A payment from one Corresponding Loan Group
to the Sub-WAC REMIC Regular Interests related to another Corresponding Loan
Group as provided in the Preliminary Statement.
Private
Certificate: As specified in the Preliminary
Statement.
Proprietary
Lease: The lease on a Cooperative Unit evidencing the possessory
interest of the owner of the Cooperative Shares in such Cooperative
Unit.
Prospectus
Supplement: The Prospectus Supplement dated July 16, 2007
relating to the Offered Certificates.
Protected
Account: An account established and maintained for the benefit of
Certificateholders by the Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the Servicing
Agreement. Each Protected Account is required to be an Eligible
Account.
PCAOB: The
Public Company Accounting Oversight Board.
Purchase
Price: With respect to any Mortgage Loan required to be purchased
by the Transferor pursuant to Section 2.02 or 2.03 hereof, an amount equal
to
(a) the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan
on
the date of such purchase, (ii) accrued and unpaid interest thereon at the
applicable Mortgage Rate from the date through which interest was last paid
by
the Mortgagor or the Servicer or the Master Servicer, as the case may be, made
an Advance in respect thereof (which was not reimbursed) to the Due Date in
the
month in which the Purchase Price is to be distributed to Certificateholders
and
(iii) in the event that such Mortgage Loan is repurchased by the Transferor
due
to a breach of the Transferor's representations and warranties listed in clauses
(xiii) or (xxxiv) of Schedule II to this Agreement relating to applicable
anti-predatory and abusive lending laws, any costs and damages incurred by
the
Issuing Entity in connection with a violation of a predatory or abusive lending
law with respect to such Mortgage Loan, less (b) any Amounts Held for
Future Distribution related to such Mortgage Loan with respect to the
Distribution Date in the month in which the Purchase Price is to be distributed
to Certificateholders.
Qualified
Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states
to
transact a mortgage guaranty insurance business in such states and to write
the
insurance provided by the insurance policy issued by it, approved as a Xxxxxx
Mae approved mortgage insurer and having a claims paying ability rating of
at
least “AA” or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan
must have at least as high a claims paying ability rating as the insurer it
replaces had on the Closing Date.
Qualified
Mortgage Insurer: Any mortgage insurer that is Xxxxxx Xxx and
Xxxxxxx Mac approved.
33
Rating
Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in
existence, “Rating Agency” shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Trust Administrator. References herein to a given rating category of
a Rating Agency shall mean such rating category without giving effect to any
modifiers.
Realized
Loss: With respect to each Mortgage Loan that is a Liquidated
Loan, an amount (not less than zero or more than the Scheduled Principal Balance
of the Mortgage Loan) as of the date of such liquidation equal to (i) the unpaid
principal balance of the Liquidated Loan as of the date of such liquidation,
plus (ii) interest at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation Proceeds
are required to be distributed on the Scheduled Principal Balance of such
Liquidated Loan, minus (iii) the Liquidation Proceeds, if any, received
during the month in which such liquidation occurred, to the extent applied
as
recoveries of interest at the Net Mortgage Rate and to principal of the
Liquidated Loan. With respect to each Mortgage Loan which has become
the subject of a Deficient Valuation, if the principal amount due under the
related Mortgage Note has been reduced, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
Recognition
Agreement: An Agreement among a Cooperative Corporation, a lender
and a Mortgagor with respect to a Cooperative Loan whereby such parties (i)
acknowledge that such lender may make, or intends to make, such Cooperative
Loan
and (ii) make certain agreements with respect to such Cooperative
Loan.
Record
Date: With respect to any Distribution Date and all classes of
certificates, the close of business on the last Business Day of the month
preceding the month in which such Distribution Date occurs.
Recovery: With
respect to any Distribution Date and any Mortgage Loan, an amount, net of any
reimbursable expenses, received in respect of principal on such Mortgage Loan
during the related Prepayment Period, which has previously been allocated as
a
Realized Loss to a Class of Certificates.
Refinancing
Mortgage Loan: Any Mortgage Loan originated in connection with
the refinancing of an existing mortgage loan.
Regular
Certificates: The Certificates, other than the Residual
Certificates.
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 – 1,631 (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.
34
Relevant
Servicing Criteria: The Servicing Criteria applicable to each
party, as set forth on Exhibit X attached hereto. Multiple parties
can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by
any of the Master Servicer, the Trust Administrator or the Servicer, the term
Relevant Servicing Criteria may refer to a portion of the Relevant Servicing
Criteria applicable to such party.
Relief
Act: The Servicemembers Civil Relief Act, as amended, or any
comparable state or local statute (including the comparable provisions under
the
California Military and Veterans Code, as amended).
Relief
Act Reduction: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result
of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month
is
less than (ii) interest accrued thereon for such month pursuant to the Mortgage
Note.
REMIC: A
“real estate mortgage investment conduit” within the meaning of section 860D of
the Code.
REMIC
Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
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.
REO
Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure, deed-in-lieu of foreclosure, repossession or otherwise in
connection with a defaulted Mortgage Loan.
Reportable
Event: As defined in Section 9.12.
Reporting
Servicer: As defined in Section 9.12(b)(i).
Required
Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
the
Servicing Agreement.
Residual
Interests: As specified in the Preliminary
Statement.
Responsible
Officer: When used with respect to the Trustee or the Trust
Administrator, any Director, any Managing Director, any Associate, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee or Trust Administrator,
as
applicable, customarily performing functions similar to those performed by
any
of the above designated officers having direct responsibility for the
administration of this Agreement and also 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.
35
Restricted
Classes: As defined in Section 4.02(c).
S&P: Standard
and Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor thereto. If S&P is designated as a Rating Agency in
the Preliminary Statement, for purposes of Section 11.05(b), the address for
notices to S&P shall be Standard and Poor’s Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Mortgage Monitoring Group, or such other
address as S&P may hereafter furnish to each other party to this
Agreement.
Xxxxxxxx-Xxxxx
Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
of the Commission promulgated thereunder (including any interpretations thereof
by the Commission’s staff).
Xxxxxxxx-Xxxxx
Certification: As defined in Section 9.12.
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.
Scheduled
Principal Balance: As to any Mortgage Loan and any Distribution
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date
in
the month preceding the month in which such Distribution Date occurs, as
specified in the amortization schedule at the time relating thereto (before
any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous partial Principal
Prepayments and Liquidation Proceeds allocable to principal received during
the
Prepayment Period for the prior Distribution Date (other than with respect
to
any Liquidated Loan), and to the payment of principal due on such Due Date
and
irrespective of any delinquency in payment by the related
Mortgagor. The Scheduled Principal Balance of any Mortgage Loan that
has been prepaid in full or has become a Liquidated Loan during the related
Prepayment Period shall be zero.
Securities
Act: The Securities Act of 1933, as amended.
Security
Agreement: With respect to a Cooperative Loan, the agreement or mortgage
creating a security interest in favor of the originator of the Cooperative
Loan
in the related Cooperative Shares.
Senior
Certificates: As specified in the Preliminary
Statement.
Senior
Final Distribution Date: With respect to any Group, the
Distribution Date on which the respective Certificate Principal Balances of
the
Senior Certificates in each such Group have each been reduced to
zero.
36
Senior
Optimal Principal Amount: For any Distribution Date and any Loan
Group, the sum for all Mortgage Loans contributing to such Loan Group of (i)
the
Senior Percentage of: (a) the principal portion of each Scheduled Payment
(without giving effect, prior to the Bankruptcy Coverage Termination Date,
to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each such Mortgage Loan on the related Due Date, (b) the
principal portion of the Purchase Price of each such Mortgage Loan that was
repurchased by the Transferor pursuant to this Agreement as of such Distribution
Date, (c) the Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan contributing to such Loan Group received with respect to such
Distribution Date and (d) any Liquidation Proceeds (including Insurance
Proceeds) allocable to recoveries of principal of Mortgage Loans related to
such
Loan Group that are not yet Liquidated Loans received during the calendar month
preceding the month of such Distribution Date, (ii) with respect to each such
Mortgage Loan that became a Liquidated Loan during the calendar month preceding
the month of such Distribution Date, the lesser of (a) the Senior Percentage
of
the Scheduled Principal Balance of such Mortgage Loan, or (b) either (A) the
Senior Prepayment Percentage, or (B) if an Excess Loss was sustained with
respect to such Liquidated Loan during such prior calendar month, the Senior
Percentage of the amount of the Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan, (iii) the Senior Prepayment
Percentage of the sum of (a) all Principal Prepayments in Full received on
the
Mortgage Loans contributing to such Loan Group during the related Prepayment
Period and (b) all partial Principal Prepayments on the Mortgage Loans
contributing to such Loan Group applied during the related Prepayment Period,
and (iv) with respect to any Distribution Date prior to the Cross-Over Date
only, the Senior Prepayment Percentage of the Recoveries for such Loan Group
received during the related Prepayment Period; provided, however,
that if a Bankruptcy Loss that is an Excess Loss is sustained with respect
to
such Mortgage Loan that is not a Liquidated Loan, the Senior Optimal Principal
Amount will be reduced on the related Distribution Date by the Senior Percentage
of the principal portion of such Bankruptcy Loss.
Senior
Percentage: As to any Distribution Date and Certificate Group,
the lesser of (a) 100% and (b) the percentage equivalent of a fraction the
numerator of which is the aggregate of the Certificate Principal Balances of
each Class of Senior Certificates in such Certificate Group immediately
preceding such Distribution Date and the denominator of which is the aggregate
of the Scheduled Principal Balance of each Mortgage Loan contributing to the
related Loan Group for such Distribution Date.
Senior
Prepayment Percentage: With respect to any Certificate Group and
any Distribution Date during the seven years beginning on the first Distribution
Date, 100%. The Senior Prepayment Percentage for any Certificate
Group and any Distribution Date occurring on or after the seventh anniversary
of
the first Distribution Date will, except as provided herein, be as
follows: for any Distribution Date in the first year thereafter, the
Senior Percentage for such Certificate Group plus 70% of the related
Subordinate Percentage for such Certificate Group for such Distribution Date;
for any Distribution Date in the second year thereafter, the Senior Percentage
for such Certificate Group plus 60% of the related Subordinate
Percentage for such Certificate Group for such Distribution Date; for any
Distribution Date in the third year thereafter, the Senior Percentage for such
Certificate Group plus 40% of the related Subordinate Percentage for
such Certificate Group for such Distribution Date; for any Distribution Date
in
the fourth year thereafter, the Senior Percentage for such Certificate Group
plus 20% of the related Subordinate Percentage for such Certificate
Group for such Distribution Date; and for any Distribution Date thereafter,
the
Senior Percentage for such Certificate Group for such Distribution Date (unless
on any Distribution Date the Senior Percentage for any Certificate Group exceeds
the initial Senior Percentage for such Certificate Group, in which case the
Senior Prepayment Percentage for each Certificate Group for such Distribution
Date will once again equal 100%). Notwithstanding the foregoing, no
decrease in the Senior Prepayment Percentage for any Certificate Group will
occur unless both of the related Senior Stepdown Conditions are satisfied;
provided, however, that if on any Distribution Date the Senior
Prepayment Percentage is not permitted to decrease because one or both of the
related Senior Stepdown Conditions are not satisfied, such Senior Stepdown
Conditions shall be tested on each succeeding Distribution Date and if both
Senior Stepdown Conditions are satisfied the Senior Prepayment Percentage for
that Certificate Group shall decrease; and provided, further, that
upon the occurrence of a decrease in the Senior Prepayment Percentage for any
Certificate Group during one of the periods described in the definition of
“Senior Stepdown Conditions,” such decrease shall remain in effect for the
remainder of such period.
37
Notwithstanding
the preceding paragraph, if (x) prior to the Distribution Date in August 2010,
the Subordinate Percentage for a Certificate Group is at least 200% of that
Subordinate Percentage as of the Closing Date, the Senior Stepdown Conditions
are satisfied with respect to the related Loan Group and cumulative Realized
Losses with respect to the related Loan Group do not exceed 20% of the aggregate
Certificate Principal Balance of the Subordinated Certificates as of the Closing
Date, the related Senior Prepayment Percentage for the related Certificates
will
equal the related Senior Percentage for that Distribution Date plus 50% of
the
related Subordinate Percentage and (y) on or after the Distribution Date in
August 2010, the Subordinate Percentage for a Certificate Group is at least
200%
of that Subordinate Percentage as of the Closing Date, the Senior Stepdown
Conditions are satisfied with respect to the related Loan Group and cumulative
Realized Losses with respect to the related Loan Group do not exceed 30% of
the
aggregate Certificate Principal Balance of the Subordinated Certificates as
of
the Closing Date, the Senior Prepayment Percentage for that Loan Group will
equal the Senior Percentage.
Senior
Stepdown Conditions: With respect to any Certificate Group, as of
the last day of the month preceding the applicable Distribution Date as to
which
any decrease in the Senior Prepayment Percentage for such Certificate Group
applies, (i) the aggregate Scheduled Principal Balance of all of the Mortgage
Loans delinquent 60 days or more (including delinquent Mortgage Loans in
bankruptcy, and all Mortgage Loans in foreclosure and REO Properties), as a
percentage of the aggregate Certificate Principal Balance of the Subordinate
Certificates on such Distribution Date, does not equal or exceed 50% and (ii)
cumulative Realized Losses with respect to all of the Mortgage Loans do not
exceed (a) with respect to the Distribution Date on the seventh anniversary
of
the first Distribution Date, 30% of the Original Subordinate Principal Balance,
(b) with respect to the Distribution Date on the eighth anniversary of the
first
Distribution Date, 35% of the related Original Subordinate Principal Balance,
(c) with respect to the Distribution Date on the ninth anniversary of the first
Distribution Date, 40% of the related Original Subordinate Principal Balance,
(d) with respect to the Distribution Date on the tenth anniversary of the first
Distribution Date, 45% of the related Original Subordinate Principal Balance
and
(e) with respect to the Distribution Date on the eleventh anniversary of the
first Distribution Date, 50% of the related Original Subordinate Principal
Balance.
38
Servicer: SunTrust
and with respect to any Distressed Mortgage Loan, any special servicer appointed
pursuant to Section 11.12 herein.
Servicer
Remittance Date: With respect to the Servicer and any
Distribution Date, the 24th day of each calendar month, or if such 24th day
is
not a Business Day, the immediately preceding Business Day.
Servicing
Advances: All customary, reasonable and necessary “out of pocket”
costs and expenses incurred in the performance by the Master Servicer of
its
master servicing obligations or the Servicer, as the case may be, of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer or the Servicer, as the case may
be, pursuant to Section 3.11 and any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of any REO Property
and (iv) compliance with the obligations under Section 3.09.
Servicing
Agreement: The SunTrust Servicing Agreement and the Assignment
Agreement.
Servicing
Criteria: The “servicing criteria” set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing
Fee: As to each Mortgage Loan and any Distribution Date, an
amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one twelfth of the Servicing Fee Rate multiplied by
the Scheduled Principal Balance of such Mortgage Loan as of the Due Date in
the
month immediately preceding the month in which such Distribution Date occurs
(after giving effect to any Scheduled Payments due on such Mortgage Loan on
such
Due Date), subject to reduction for any Compensating Interest payments required
to be made by the Servicer.
Servicing
Fee Rate: With respect to each Mortgage Loan, the per annum rate
set forth on the Mortgage Loan Schedule.
Servicing
Function Participant: Any Subservicer, Subcontractor or any other
Person, other than the Servicer, the Master Servicer and the Trust
Administrator, that is participating in the servicing function within the
meaning of Regulation AB, unless such Person’s activities relate only to 5% or
less of the Mortgage Loans (calculated by Aggregate Pool Principal
Balance).
Special
Hazard Coverage Termination Date: The point in time at which the
Special Hazard Loss Coverage Amount is reduced to zero.
Special
Hazard Loss: Any Realized Loss as reported by the Servicer to the
Master Servicer suffered by a Mortgaged Property on account of direct physical
loss but not including (i) any loss of a type covered by a hazard insurance
policy or a flood insurance policy required to be maintained with respect to
such Mortgaged Property pursuant to Section 3.11 to the extent of the amount
of
such loss covered thereby, or (ii) any loss caused by or resulting
from:
39
(a) normal
wear and tear;
(b) fraud,
conversion or other dishonest act on the part of the Trustee, the Trust
Administrator, the Servicer, the Master Servicer or any of their agents or
employees (without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors
in design, faulty workmanship or faulty materials, unless the collapse of the
property or a part thereof ensues and then only for the ensuing
loss;
(d) nuclear
or chemical reaction or nuclear radiation or radioactive or chemical
contamination, all whether controlled or uncontrolled, and whether such loss
be
direct or indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition of the term
“Special Hazard Loss”;
(e) hostile
or warlike action in time of peace and war, including action in hindering,
combating or defending against an actual, impending or expected
attack:
(i) by
any government or sovereign power, de jure or de facto, or by
any authority maintaining or using military, naval or air forces;
or
(ii) by
military, naval or air forces; or
(iii) by
an agent of any such government, power, authority or forces;
(f) any
weapon of war employing nuclear fission, fusion or other radioactive force,
whether in time of peace or war; or
(g) insurrection,
rebellion, revolution, civil war, usurped power or action taken by governmental
authority in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations, confiscation
by
order of any government or public authority or risks of contraband or illegal
transportation or trade.
Special
Hazard Loss Coverage Amount: With respect to each Group and any
Distribution Date, $7,383,948.38 less (i) the aggregate amount of
Special Hazard Losses that would have been previously allocated to the
Subordinate Certificates in the absence of the Loss Allocation Limitation and
(ii) the related Adjustment Amount as of the most recent anniversary of July
1,
2007. As of any Distribution Date on or after the Cross-Over Date,
the Special Hazard Loss Coverage Amount shall be zero.
40
All
principal balances for the purpose of this definition will be calculated as
of
the first day of the calendar month preceding the month of such Distribution
Date after giving effect to Scheduled Payments on the Mortgage Loans then due,
whether or not paid.
Special
Hazard Mortgage Loan: A Liquidated Loan as to which a Special
Hazard Loss has occurred.
Standard
& Poor’s Glossary: The current Standard & Poor’s LEVELS®
Glossary, as may be in effect from time to time.
Startup
Day: The Closing Date.
Stock
Power: With respect to a Cooperative Loan, an assignment of the
stock certificate or an assignment of the Cooperative Shares issued by the
Cooperative Corporation.
Subcontractor: Any
outsourcer that performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to more than 5% but less than 10% of
the
Mortgage Loans under the direction or authority of the Master Servicer, the
Trust Administrator, the Custodian or the Servicer (measured by Aggregate Pool
Principal Balance of the Mortgage Loans, annually at the commencement of the
calendar year prior to the year in which an Assessment of Compliance is required
to be delivered, multiplied by a fraction, the numerator of which is the number
of months during which such Subcontractor performs such discrete functions
and
the denominator of which is 12, or, in the case of the year in which the Closing
Date occurs, the number of months elapsed in such calendar year).
Subordinate
Certificates: As specified in the Preliminary
Statement.
Subordinate
Pass-Through Rate: As defined in the Preliminary
Statement.
Subordinated
Portion: For any Distribution Date and Loan Group, an amount
equal to the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group as of the Due Date in the month prior to the month of such
Distribution Date, minus the aggregate Class Certificate Balance of the
related Senior Certificates immediately prior to such Distribution
Date.
Subordinate
Optimal Principal Amount: For any Distribution Date and Loan
Group, the sum for each Mortgage Loan contributing to such Loan Group of (i)
the
Subordinate Percentage of: (a) the principal portion of each Scheduled Payment
(without giving effect, prior to the Bankruptcy Coverage Termination Date,
to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each such Mortgage Loan on the related Due Date, (b) the
principal portion of the Purchase Price of each such Mortgage Loan that was
repurchased by the Transferor pursuant to this Agreement as of such Distribution
Date, (c) the Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan contributing to such Loan Group received with respect to such
Distribution Date and (d) any Liquidation Proceeds (including Insurance
Proceeds) allocable to recoveries of principal of Mortgage Loans contributing
to
such Loan Group that are not yet Liquidated Loans received during the calendar
month preceding the month of such Distribution Date, (ii) with respect to each
such Mortgage Loan that became a Liquidated Loan during the calendar month
preceding the month of such Distribution Date, the portion of the amount of
the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan that was not included in clause (ii) of the definition of “Senior
Optimal Principal Amount” with respect to such Distribution Date, (iii) the
Subordinate Prepayment Percentage of the sum of (A) all Principal Prepayments
in
full received on the Mortgage Loans contributing to such Loan Group during
the
related Prepayment Period and (B) all partial Principal Prepayments on the
Mortgage Loans contributing to such Loan Group applied during the related
Prepayment Period, and (iv) with respect to any Distribution Date prior to
the
Cross-Over Date only, the Subordinate Prepayment Percentage of the Recoveries
for such Loan Group received during the related Prepayment Period;
provided, however, that if a Bankruptcy Loss that is an Excess
Loss is sustained with respect to a Mortgage Loan contributing to such Loan
Group that is not a Liquidated Loan, the Subordinate Optimal Principal Amount
will be reduced on the related Distribution Date by the Subordinate Percentage
of the principal portion of such Bankruptcy Loss.
41
Subordinate
Percentage: As to any Distribution Date and any Certificate
Group, 100% minus the Senior Percentage for such Certificate Group for
such Distribution Date.
Subordinate
Prepayment Percentage: As to any Distribution Date and any
Certificate Group, 100% minus the Senior Prepayment Percentage for such
Certificate Group for such Distribution Date, except that, on any Distribution
Date after the Senior Final Distribution Date for any Certificate Group, the
Subordinate Prepayment Percentage for each such Certificate Group will equal
100%.
Subordinate
Principal Distribution Amount: With respect to the Subordinate
Certificates, the aggregate amount which would be payable as principal on the
Subordinate Certificates from Group 1 Available Funds, Group 2 Available Funds,
Group 3 Available Funds, Group 4 Available Funds and Group 5 Available Funds,
in
the aggregate, after application of Group 1 Available Funds, Group 2 Available
Funds, Group 3 Available Funds, Group 4 Available Funds and Group 5 Available
Funds in the aggregate (i) to make payments on the Senior Certificates, in
accordance with Section 4.02(a)(i) items first and second and
Section 4.02(d) and (ii) to make payments of Accrued Certificate Interest to
the
Subordinate Certificates in accordance with Section 4.02(a)(i) priority
fourth.
Subservicer: Any
Person that (a) services Mortgage Loans on behalf of the Servicer pursuant
to a
subservicing agreement and is responsible for the performance of the material
servicing functions required to be performed by the Servicer under the Servicing
Agreement that are identified in Item 1122(d) of Regulation AB with respect
to
10% or more of the Mortgage Loans under the direction or authority of the
Servicer (measured by Aggregate Pool Principal Balance of the Mortgage Loans,
annually at the commencement of the calendar year prior to the year in which
an
Assessment of Compliance is required to be delivered, multiplied by a fraction,
the numerator of which is the number of months during which such Subservicer
services the related Mortgage Loans and the denominator of which is 12, or,
in
the case of the year in which the Closing Date occurs, the number of months
elapsed in such calendar year).
Subsidiary
REMIC : As specified in the Preliminary Statement.
42
Subsidiary
REMIC Regular Interest: As specified in the Preliminary
Statement.
Substitution
Adjustment Amount: The meaning ascribed to such term pursuant to
Section 2.03.
SunTrust: SunTrust
Mortgage, Inc., a Virginia corporation, and its successors and assigns, in
its
capacity as Servicer of the Mortgage Loans.
SunTrust
Servicing Agreement: Solely with respect to the Mortgage Loans,
the Purchase, Warranties and Servicing Agreement, dated as of July 1, 2007,
by
and between the Depositor, as purchaser and SunTrust, as seller and servicer,
and as the same may be further amended from time to time, and any assignments
and conveyances related to the Mortgage Loans.
Tax
Matters Person: In the case of each REMIC created by this
Agreement, the person designated as “tax matters person” in the manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1 for such REMIC.
Transfer: Any
direct or indirect transfer or sale of any Ownership Interest in a Residual
Certificate.
Transferor: SunTrust
Mortgage, Inc., a Virginia corporation, seller of the Mortgage Loans to the
Depositor pursuant to the SunTrust Servicing Agreement.
Trust
Administrator: Xxxxx Fargo, in its capacity as Trust
Administrator and any successor appointed hereunder.
Trust
Administrator Compensation: All investment earnings on amounts on
deposit in the Distribution Account.
Trust
Fund: The corpus of the trust created hereunder consisting
of: (a) the SunTrust Servicing Agreement and the Servicing Agreement
solely as the Servicing Agreement relates to the Mortgage Loans being serviced
by the Servicer (other than those rights under the Servicing Agreement that
do
not relate to servicing of the Mortgage Loans (including, without limitation,
the representations and warranties made by the Servicer (with respect to the
Mortgage Loans sold to the Transferor) and the document delivery requirements
of
the Servicer and the remedies (including indemnification) available for breaches
thereto), which rights were retained by the Transferor pursuant to the
Assignment Agreement); (b) the Mortgage Loans and all interest and principal
received on or with respect thereto after the Cut-off Date to the extent not
applied in computing the Cut-off Date Principal Balance thereof; (c) the
Collection Account and the Distribution Account, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (d) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure or otherwise; and (e) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
43
Trustee: U.S.
Bank National Association and, if a successor trustee is appointed hereunder,
such successor, both in its capacity as trustee under this Agreement and the
Trust Agreement.
Uncertificated
REMIC Interests: The REMIC regular interests issued by the Master REMIC in
uncertificated form as specified in the Preliminary Statement.
Undercollateralized
Group: With respect to any Certificate Group with respect to
which, on any Distribution Date, the aggregate Certificate Principal Balance
of
the related Senior Certificates related to such Certificate Group (after giving
effect to distributions to be made on such Distribution Date) is greater than
the Group Balance of the related Loan Group for the following Distribution
Date.
Underwriter’s
Exemption: Prohibited Transaction Exemption 2007-05, 67 Fed. Reg.
54487 (2002), as amended (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of
Labor.
Voting
Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate subject to the limitations
set forth in Section 2.01(c) herein. As of any date of determination,
(a) [reserved], (b) 1% of all Voting Rights shall be allocated to each of the
Class A-LR and Class A-UR Certificates (such Voting Rights to be allocated
among
the Holders of Certificates of each such Class in accordance with their
respective Percentage Interests) and (c) the remaining Voting Rights shall
be
allocated among Holders of the remaining Classes of Certificates in proportion
to the Certificate Principal Balances of their respective Certificates on such
date.
Weighted
Average Net Mortgage Rate: For any Distribution Date and Loan Group, the
average of the Adjusted Net Mortgage Rates of the Mortgage Loans in that Loan
Group, weighted on the basis of their respective Scheduled Principal Balances
as
of the Due Date in the prior month.
Xxxxx
Fargo: Xxxxx Fargo Bank, N.A., and its successors and assigns in
its capacity as Master Servicer or Trust Administrator, as the case may be,
hereunder.
Section
1.02. Certain
Calculations.
Unless
otherwise specified herein, for purposes of determining amounts with respect
to
the Certificates and the rights and obligations of the parties hereto, all
calculations of interest (other than as provided in the Mortgage Loan documents)
provided for herein shall be made on the basis of a 360-day year consisting
of
twelve 30 day months.
44
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. In connection
with the foregoing assignments, the Transferor has caused the Servicer to enter
into the Assignment Agreement.
(b) (i) In
connection with the transfer and assignment set forth in clause (a) above,
the
Depositor has delivered or caused to be delivered to the Custodian, on behalf
of
the Trustee, for the benefit of the Certificateholders the following documents
or instruments with respect to each Mortgage Loan that is not a Cooperative
Loan
so assigned:
(A) the
original Mortgage Note endorsed by manual or facsimile signature in blank in
the
following form: “Pay to the order of ___________ without recourse,”
with all intervening endorsements showing a complete chain of endorsement from
the originator to the Person endorsing the Mortgage Note (each such endorsement
being 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,
with respect to any Lost Mortgage Note, a lost note affidavit from the related
originator or the Transferor stating that the original Mortgage Note was lost
or
destroyed, together with a copy of such Mortgage Note;
(B) except
as provided below, the original recorded Mortgage or a copy of such Mortgage
certified by the related originator as being a true and complete copy of the
Mortgage;
(C) a
duly executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments), endorsed in the following form: “U.S.
Bank National Association, in trust for the STARM Mortgage Loan Trust 2007-S1
for the benefit of the Holders of the Mortgage Pass-Through Certificates, Series
2007-S1” together with, except as provided below, all interim recorded
assignments of such mortgage (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the assignment
of
and transfer to the assignee thereof, under the Mortgage to which the assignment
relates); provided that, if the related Mortgage has not been returned
from the applicable public recording office, such assignment of the Mortgage
may
exclude the information to be provided by the recording office;
45
(D) the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any; and
(E) except
as provided below, the original or duplicate original lender’s title policy and
all riders thereto.
(ii) In
connection with the transfer and assignment set forth in clause (a) above,
the
Depositor has delivered or caused to be delivered to the Custodian, on behalf
of
the Trustee, for the benefit of the Certificateholders the following documents
or instruments with respect to each Cooperative Loan, if any, so
assigned:
(A) the
Cooperative Shares, together with the Stock Power in blank;
(B) the
executed Security Agreement;
(C) the
executed Proprietary Lease and the Assignment of Proprietary Lease to the
originator of the Cooperative Loan;
(D) the
executed Recognition Agreement;
(E) copies
of the original Financing Statement, and any continuation statements, filed by
the originator of such Cooperative Loan as secured party, each with evidence
of
recording thereof, evidencing the interest of the originator under the Security
Agreement and the Assignment of Proprietary Lease;
(F) copies
of the filed UCC assignments or amendments of the security interest referenced
in clause (v) above showing an unbroken chain of title from the originator
to
the Issuing Entity, each with evidence of recording thereof, evidencing the
interest of the assignee under the Security Agreement and the Assignment of
Proprietary Lease;
(G) an
executed assignment of the interest of the originator in the Security Agreement,
the Assignment of Proprietary Lease and the Recognition Agreement, showing
an
unbroken chain of title from the originator to the Issuing Entity;
and
(H) for
any Cooperative Loan that has been modified or amended, the original instrument
or instruments effecting such modification or amendment.
Notwithstanding
the foregoing, 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 Master Servicer (or if the Master Servicer is the Servicer,
the
Trustee upon receipt of written notice that the records of MERS have not been
so
changed) shall enforce the obligations of the Servicer under its Servicing
Agreement to cause the Trustee 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.
46
If
in
connection with any Mortgage Loan the Depositor cannot deliver (a) the original
recorded Mortgage, (b) all interim recorded assignments or (c) the lender’s
title policy (together with all riders thereto) satisfying the requirements
of
clause (b)(i)(B), (C) or (E) above, respectively, concurrently with the
execution and delivery hereof because such document or documents have not been
returned from the applicable public recording office in the case of clause
(b)(i)(B) or (C) above, or because the title policy has not been delivered
to
either the Custodian or the Depositor by the applicable title insurer in the
case of clause (b)(i)(E) above, the Depositor shall promptly deliver to the
Custodian, in the case of clause (b)(i)(B) or (C) above, such original Mortgage
or such interim assignment, as the case may be, with evidence of recording
indicated thereon upon receipt thereof from the public recording office, or
a
copy thereof, certified, if appropriate, by the relevant recording office,
but
in no event shall any such delivery of the original Mortgage and each such
interim assignment or a copy thereof, certified, if appropriate, by the relevant
recording office, be made later than one year following the Closing Date, or,
in
the case of clause (b)(i)(E) above, no later than 120 days following the Closing
Date; provided, however, in the event the Depositor is unable to
deliver by such date each Mortgage and each such interim assignment by reason
of
the fact that any such documents have not been returned by the appropriate
recording office, or, in the case of each such interim assignment, because
the
related Mortgage has not been returned by the appropriate recording office,
the
Depositor shall deliver such documents to the Custodian as promptly as possible
upon receipt thereof and, in any event, within 720 days following the Closing
Date. The Depositor shall forward or cause to be forwarded to the
Custodian (a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) any other documents
required to be delivered by the Depositor to the Custodian. In the
event that the original Mortgage is not delivered and in connection with the
payment in full of the related Mortgage Loan and the public recording office
requires the presentation of a “lost instruments affidavit and indemnity” or any
equivalent document, because only a copy of the Mortgage can be delivered with
the instrument of satisfaction or reconveyance, the Custodian shall execute
and
deliver or cause to be executed and delivered such a document to the public
recording office. In the case 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, the Transferor shall deliver to the
Custodian a copy of such Mortgage certified by such public recording office
to
be a true and complete copy of the original recorded Mortgage.
As
promptly as practicable subsequent to such transfer and assignment, set forth
in
clause (a) above and in any event, within ninety (90) days thereafter, the
Custodian shall affix the Trustee’s name to each assignment of Mortgage, as the
assignee thereof, and, subject to Section 2.02, the Master Servicer shall
enforce the obligations of the Servicer pursuant to the Servicing Agreement
to
(i) cause such assignment to be in proper form for recording in the appropriate
public office for real property records and (ii) cause to be delivered for
recording in the appropriate public office for real property records the
assignments of the Mortgages to the Trustee, except that, with respect to any
assignments of Mortgage as to which the Servicer has not received the
information required to prepare such assignment in recordable form, the
Servicer’s obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within ninety (90) days after receipt thereof and except that the Servicer
need
not cause to be recorded any assignment which relates to a Mortgage Loan (a)
in
any state where, in an Opinion of Counsel addressed to the Trustee, such
recording is not required to protect the Trustee’s interests in the Mortgage
Loan against the claim of any subsequent transferee or any successor to or
creditor of the Depositor or the Transferor, (b) in any state where recordation
is not required by either Rating Agency to obtain the initial ratings on the
Certificates set forth in the Prospectus Supplement or (c) with respect to
any
Mortgage which has been recorded in the name of MERS, or its
designee. As of the date hereof, recordation is not required in any
state by either Rating Agency to obtain the initial rating on the Certificates
(upon which statement the Master Servicer, the Trustee and the Custodian may
each conclusively rely).
47
In
the
case of Mortgage Loans that have been prepaid in full as of the Closing Date,
the Depositor, in lieu of delivering the above documents to the Master Servicer
on behalf of the Trustee, will deposit in the Collection Account the portion
of
such payment that is required to be deposited in the Collection Account pursuant
to Section 3.07 hereof.
(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 “Issuing
Entity”) to be known, for convenience, as “STARM Mortgage Loan Trust 2007-S1”
and U.S. Bank National Association is hereby appointed as Trustee in accordance
with the provisions of this Agreement.
The
purpose of the trust, as created hereunder, is to engage in the following
activities:
(i) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(ii) to
issue the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(iii) to
make payments on the Certificates;
(iv) to
engage in those activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith to
the
extent not inconsistent with the other provisions of this Agreement;
and
(v) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. The
Trustee shall not cause the trust to engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement while any Certificate is outstanding, and this Section
2.01(c) may not be amended, without the consent of the Certificateholders
evidencing 51% or more of the aggregate Voting Rights of the outstanding
Certificates; provided that, for purposes of this provision, any Certificate
held by the Transferor or any affiliate of the Transferor shall not be
considered outstanding and, therefore, the Transferor and its affiliates shall
not be entitled to vote on matters hereunder and the Voting Rights related
to
any such Certificates held by the Transferor or its affiliates shall not be
included in the determination of the aggregate Voting Rights of outstanding
Certificates.
48
(d) [Reserved].
(e) Each
of the Collection Account and Distribution Account shall at all times be an
Eligible Account, provided that the Collection Account may be deemed to be
a
sub-account of the Distribution Account. If at any time either the
Collection Account or the Distribution Account ceases to be an Eligible Account,
the Master Servicer or the Trust Administrator, as applicable, shall immediately
establish and maintain a new Collection Account or Distribution Account, as
applicable, that is an Eligible Account, and shall immediately transfer all
funds on deposit in the former Collection Account or Distribution Account,
as
applicable, to the new Collection Account or Distribution Account, as
applicable.
(f) It
is agreed and understood by the Trustee, the Trust Administrator, the Depositor
and the Transferor that it is not intended that any mortgage loan be included
in
the Issuing Entity that is a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act, effective as of November 27, 2003, or The Home Loan
Protection Act of New Mexico, effective as of January 1, 2004, or that is a
“High Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home
Loan Practices Act, effective as of November 7, 2004, or that is an “Indiana
High Cost Home Mortgage Loan” as defined in the Indiana High Cost Home Loan Act,
effective as of January 1, 2005.
(g) [Reserved].
(h) The
Trustee is hereby directed, on or prior to the Closing Date, not in its
individual capacity but solely on behalf of the Trust Fund, to execute and
deliver each assignment agreement to which it is a party, if any, in the forms
presented to it by the Depositor, for the benefit of the Holders of the
Certificates. The Trustee shall not be personally liable for the
payment of any indebtedness or expenses of the Trust Fund or be liable for
the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Trustee on behalf of the Trust Fund under any such
assignment agreement or any other related documents, as to all of which recourse
shall be had solely to the assets of the Trust Fund in accordance with the
terms
of this Agreement. Every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall apply to the Trustee’s execution
of any such assignment agreement and the performance of any obligations
thereunder.
49
Section
2.02. Acceptance
by Trustee of the Mortgage Loans.
The
Custodian, on behalf of the Trustee, acknowledges receipt of the documents
identified in the Initial Certification issued by it in the form annexed hereto
as Exhibit G and declares that it holds and will hold such related documents
and
the other documents delivered to it constituting the Mortgage Files, and the
Custodian and Trustee together declare 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 Custodian
acknowledges that it will maintain possession of the Mortgage Notes held by
it
in the State of Virginia, unless otherwise permitted by the Rating Agencies
and
the Trustee.
The
Custodian agrees to execute and deliver on the Closing Date to the Depositor
and
the Trustee an Initial Certification in the form annexed hereto as Exhibit
G. Based on its review and examination, and only as to the documents
identified in such Initial Certification, the Custodian acknowledges, subject
to
any applicable exceptions noted on Exhibit G, that such documents appear regular
on their face and relate to such Mortgage Loan. The Custodian shall
not be under any duty or obligation to (i) inspect, review or examine said
documents, instruments, certificates or other papers to determine that the
same
are genuine, enforceable or appropriate for the represented purpose or that
they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face or (ii) determine whether the
Mortgage File should include any of the documents specified in Section
2.01(b)(i)(D) with respect to each Mortgage Loan that is not a Cooperative
Loan
and Section 2.01(b)(ii)(H) with respect to each Cooperative Loan, unless the
Mortgage Loan Schedule indicates that such documents are
applicable.
Not
later
than 90 days after the Closing Date, the Custodian shall deliver to the
Depositor, the Trustee and the Transferor a Final Certification in the form
annexed hereto as Exhibit H, with any applicable exceptions noted
thereon. The Custodian shall make available, upon request of any
Certificateholder, a copy of any exceptions noted on the Initial Certification
or the Final Certification. The Custodian shall make available, upon
request of the Trustee, the identity of the originator for any Mortgage Loan
with a material exception.
If,
in
the course of such review, the Custodian finds any document constituting a
part
of a related Mortgage File which does not meet the requirements of Section
2.01,
the Custodian shall list such as an exception in the Final Certification;
provided, however, that the Custodian shall not make any
determination 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, (ii) any assignment is in recordable
form
or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates or (iii) the Mortgage
File should include any of the documents specified in Section 2.01(b)(i)(D)
with
respect to each Mortgage Loan that is not a Cooperative Loan and Section
2.01(b)(ii)(H) with respect to each Cooperative Loan, unless the Mortgage Loan
Schedule indicates that such documents are applicable.
Upon
receiving each Final Certification from the Custodian, the Transferor shall
determine if there are any document defects listed as exceptions in such Final
Certification. In the event any such document defects exist, the
Transferor shall promptly correct or cure such document defects, and if the
Transferor fails to correct or cure the defect within ninety (90) days of the
earlier of its discovery or its receipt of written notice from the Trustee,
and
such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Transferor shall repurchase
the affected Mortgage Loan from the Trustee at the Purchase
Price. Any such purchase of a Mortgage Loan shall not be effected
prior to the delivery to the Custodian of a Request for Release substantially
in
the form of Exhibit M. The Purchase Price for any such Mortgage Loan
shall be paid by the Transferor to the Master Servicer for deposit in the
Collection Account on or prior to the Distribution Account Deposit Date for
the
Distribution Date in the month following the month of repurchase and, upon
receipt of such deposit, the Master Servicer shall instruct the Custodian to
release, and the Custodian shall release, the related Mortgage File to the
Transferor and the Trustee shall execute and deliver at the Transferor’s written
request such instruments of transfer or assignment prepared by the Transferor,
in each case without recourse, representation or warranty, as shall be necessary
to vest in the Transferor, or a designee, the Trustee’s interest in any Mortgage
Loan released pursuant hereto. The Transferor shall promptly
reimburse the Master Servicer and the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing such
repurchase by the Transferor.
50
The
Custodian shall retain possession and custody of each related Mortgage File
in
accordance with and subject to the terms and conditions set forth
herein. Pursuant to the terms of the Servicing Agreement, the Master
Servicer shall cause the Servicer to promptly deliver to the Custodian who
shall
thereupon promptly deposit within each Mortgage File, upon the execution or
receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Servicer
from
time to time.
It
is
understood and agreed that the obligations of the Transferor hereunder to
purchase any Mortgage Loan which does not meet the requirements of Section
2.01
above or substitute for the related Mortgage Loan an Eligible Substitute
Mortgage Loan shall constitute the sole remedies respecting such defect
available to the Trustee, the Master Servicer, the Depositor and any
Certificateholder.
Section
2.03. Remedies
for Breaches of Representations and Warranties.
The
Transferor hereby makes the representations and warranties set forth in Schedule
II hereto, and by this reference incorporated herein, to the Depositor and
the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date. With respect to any of the representations and warranties set
forth on Schedule II hereto which are made to the best of the Transferor’s
knowledge, if it is discovered by any of the Depositor, the Master Servicer,
the
Transferor, the Servicer or the Trust Administrator that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interests of
the
Certificateholders therein, notwithstanding the Transferor’s lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
51
Upon
discovery by any of the parties hereto of a breach of a representation or
warranty made by the Transferor pursuant to this Section 2.03 that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to
the
other parties hereto. A breach which causes a Mortgage Loan not to
constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of
the Code, will be deemed automatically to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan. Upon
receiving notice of a breach, the Trustee shall in turn notify the Transferor
of
such breach. The Trustee shall enforce the obligations of the
Transferor in accordance with this Section 2.03 to correct or cure any such
breach of a representation or warranty made herein, and if the Transferor fails
to correct or cure the defect within such period, and such defect materially
and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee shall enforce the Transferor’s obligations hereunder
to (i) purchase such Mortgage Loan at the Purchase Price or (ii) substitute
for
the related Mortgage Loan an Eligible Substitute Mortgage Loan; provided,
however, that the Trustee’s obligations to prosecute legal actions
against the Transferor pursuant to this Section 2.03 shall be subject to the
provisions set forth in Section 8.02(vi) regarding reimbursement of or
reasonable indemnification for costs and expenses. In each case, such
Mortgage Loan (a “Deleted Mortgage Loan”) will be removed from the Trust
Fund.
The
Transferor hereby covenants that within ninety (90) days of the earlier of
its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to this Section 2.03 which materially
and adversely affects the interest of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects, and if such breach
is
not so cured, shall, (i) if such ninety (90) day period expires prior to the
second anniversary of the Closing Date, remove such Deleted Mortgage Loan from
the Trust Fund and substitute in its place an Eligible Substitute Mortgage
Loan
or Loans into the Trust Fund, in the manner and subject to the conditions set
forth in this Section; or (ii) repurchase the affected Mortgage Loan or Mortgage
Loans from the Trustee at the Purchase Price in the manner set forth
below. The Transferor shall promptly reimburse the Master Servicer
and the Trustee for any expenses reasonably incurred by the Master Servicer
or
the Trustee in respect of enforcing the remedies for such breach by the
Transferor.
With
respect to any Eligible Substitute Mortgage Loan or Loans, the Transferor shall
deliver to the Custodian on behalf of the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment
of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required
by
Section 2.01. No substitution is permitted to be made on any day in
any calendar month after the Determination Date for such month.
With
respect to substitutions made by the Transferor, Scheduled Payments due with
respect to Eligible Substitute Mortgage Loans in the month of substitution
shall
not be part of the Trust Fund and will be retained by the Transferor on the
next
succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the monthly payment due on
any
Deleted Mortgage Loan for such month and thereafter the Transferor shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Custodian shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Eligible Substitute Mortgage Loan
or
Loans and the Custodian shall deliver the amended Mortgage Loan Schedule to
the
Trustee. Upon such substitution, the Eligible Substitute Mortgage
Loan or Loans shall be subject to the terms of this Agreement in all respects,
and the Transferor shall be deemed to have made with respect to such Eligible
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to this Section 2.03 with respect
to such Mortgage Loan. Upon any such substitution and the deposit to
the Collection Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph,
the
Custodian shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the Transferor
and
shall execute and deliver or cause the Trustee to execute and deliver at the
Transferor’s direction such instruments of transfer or assignment prepared by
the Transferor, without recourse, representation or warranty, as shall be
necessary to vest title in the Transferor, as applicable, or its designee,
the
Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
52
For
any
month in which the Transferor substitutes one or more Eligible Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer
will
determine the amount (if any) by which the aggregate principal balance of all
such Eligible Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Scheduled Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such
shortage (the “Substitution Adjustment Amount”) plus an amount equal to
the aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be remitted by the Transferor to the Master Servicer, and the Master
Servicer shall deposit such amounts received from the Transferor into the
Collection Account on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
In
the
event that the Transferor shall have repurchased a Mortgage Loan, the Purchase
Price therefor shall be deposited in the Collection Account pursuant to Section
3.07 on or before the Distribution Account Deposit Date for the Distribution
Date in the month following the month during which the Transferor became
obligated hereunder to repurchase or replace such Mortgage Loan and upon such
deposit of the Purchase Price and receipt of a Request for Release in the form
of Exhibit M hereto, the Custodian shall release the related Mortgage File
held
for the benefit of the Certificateholders to the Transferor, and the Trustee
shall execute and deliver at the Transferor’s direction such instruments of
transfer or assignment prepared by the Transferor, in each case without
recourse, representation or warranty, as shall be necessary to transfer title
from the Trustee. It is understood and agreed that the obligation
under this Agreement of the Transferor to cure, repurchase or replace any
Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedies against the Transferor respecting such matters
available to Certificateholders, the Master Servicer, the Depositor, the Trust
Administrator or the Trustee on their behalf.
53
The
provisions of this Section 2.03 shall survive the conveyance and assignment
of
the Mortgage Files to the Trustee and the delivery of the respective Mortgage
Files to the Custodian for the benefit of the Trustee and the
Certificateholders.
Section
2.04. Representations
and Warranties of the Depositor as to the Mortgage Loans.
The
Depositor hereby represents and warrants to the Trustee, the Trust Administrator
and the Master Servicer with respect to each Mortgage Loan as of the date hereof
or such other date set forth herein that as of the Closing Date, and following
the transfer of the Mortgage Loans to it by the Transferor, the Depositor had
good title to the Mortgage Loans and the Mortgage Notes were subject to no
offsets, liens, defenses or counterclaims.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 2.04 shall survive delivery of the Mortgage Files to the
Custodian. Upon discovery by the Depositor, the Transferor, the
Master Servicer, the Trust Administrator or the Trustee of a breach of any
of
the foregoing representations and warranties set forth in this Section 2.04
(referred to herein as a “breach”), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the other parties hereto and to
each
Rating Agency.
Section
2.05. [Reserved].
Section
2.06. Execution
and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the Trust Fund by
the
Depositor pursuant to Section 2.01 hereof by the Depositor pursuant to Section
2.01 hereof and acknowledges the issuance of the REMIC Interests as described
in
the Preliminary Statement in exchange therefor. The Trustee further
acknowledges the transfer and assignment to it by the Underwriter pursuant
to
Section 5.07 hereof of the Uncertificated REMIC Interests described in the
Preliminary Statement. Concurrently with such transfers and
assignments, the Trust Administrator, on behalf of the Trustee, has executed,
authenticated 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 the Uncertificated REMIC Interests described in the Preliminary
Statement and to exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform the duties set
forth in this Agreement to the best of its ability, to the end that the
interests of the Holders of the Certificates may be adequately and effectively
protected.
Section
2.07. REMIC
Matters.
The
Preliminary Statement sets forth the designations as “regular interests” or
“residual interests” and “latest possible maturity date” for federal income tax
purposes of all interests created hereby. The “Startup Day” for
purposes of the REMIC Provisions shall be the Closing Date. Each
REMIC’s fiscal year shall be the calendar year.
54
Section
2.08. Covenants
of the Master Servicer.
The
Master Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) subject
to Section 3.01, the Master Servicer shall cause the Servicer to perform its
obligations under the Servicing Agreement; and
(b) no
written information, certificate of an officer, statement furnished in writing
or written report delivered to the Depositor, any affiliate of the Depositor
or
the Trustee and prepared by the Master Servicer pursuant to this Agreement
will
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make such information, certificate, statement or report not
misleading at the time provided.
Section
2.09. Representations
and Warranties of the Master Servicer.
The
Master Servicer hereby represents and warrants to the Depositor, the Trustee
and
the Custodian, as of the Closing Date, or if so specified herein, as of the
Cut-off Date:
(a) The
Master Servicer is duly organized as a national banking association and is
validly existing and in good standing under the 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 the Master Servicer 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 master service
the
Mortgage Loans in accordance with the terms of this Agreement and to perform
any
of its other obligations under this Agreement in accordance with the terms
hereof.
(b) The
Master Servicer has the full power and authority to master service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by this Agreement and has duly authorized by all
necessary action on the part of the Master Servicer the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against the Master Servicer in accordance with its terms, except
that (i) the enforceability hereof 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 the Master Servicer, and the master
servicing of the Mortgage Loans by the Master Servicer under this Agreement,
the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Master Servicer and will not (i) result in a material
breach of any term or provision of the articles of incorporation or by-laws
of
the Master Servicer, (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 the Master Servicer
is a
party or by which it may be bound, or (iii) constitute a material violation
of
any statute, order or regulation applicable to the Master Servicer of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Master Servicer; and the Master Servicer is not in breach or violation
of any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair the Master Servicer’s ability to
perform or meet any of its obligations under this Agreement.
55
(d) The
Master Servicer or an affiliate thereof is an approved servicer of conventional
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211
of
the National Housing Act.
(e) No
litigation is pending or, to the knowledge of the Master Servicer, threatened
against the Master Servicer that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of the
Master Servicer to master service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms
thereof.
(f) No
consent, approval, authorization or, to the knowledge of the Master Servicer,
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 thereby, or if any such consent, approval, authorization or order
is required, the Master Servicer has obtained the same.
Section
2.10. Representations
and Warranties of the Custodian.
The
Custodian hereby represents and warrants to the Depositor, the Master Servicer,
the Trust Administrator and the Trustee, as of the Closing Date, or if so
specified herein, as of the Cut-off Date:
(a) The
Custodian is duly organized as a chartered bank and is validly existing and
in
good standing under the laws of the state of Georgia and is duly authorized
and
qualified to transact any and all business contemplated by this Agreement to
be
conducted by the Custodian 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.
56
(b) The
Custodian 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 the Custodian 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 the
Custodian, enforceable against the Custodian 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 the Custodian, 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 the Custodian and will not (i) result in a material breach of
any
term or provision of the articles of incorporation or by-laws of the Custodian,
(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 the Custodian is a party or by which
it may be bound, or (iii) constitute a material violation of any statute, order
or regulation applicable to the Custodian of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Custodian; and the Custodian is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Custodian’s ability to perform or meet any
of its obligations under this Agreement.
(d) No
litigation is pending or, to the knowledge of the Custodian, threatened against
the Custodian that would materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of the Custodian 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 the Custodian
of, or compliance by the Custodian with, this Agreement or the consummation
of
the transactions contemplated thereby, or if any such consent, approval,
authorization or order is required, the Custodian has obtained the
same.
57
ARTICLE
III
ADMINISTRATION
AND MASTER
SERVICING
OF MORTGAGE LOANS
Section
3.01. Master
Servicing of Mortgage Loans.
For
and
on behalf of the Certificateholders, the Master Servicer shall supervise,
monitor and oversee the obligation of the Servicer to service and administer
their respective Mortgage Loans in accordance with the terms of the Servicing
Agreement and shall have full power and authority to do any and all things
which
it may deem necessary or desirable in connection with such master servicing
and
administration. In performing its obligations hereunder, the Master
Servicer shall act in a manner consistent with this Agreement, subject to the
prior two sentences, and with customary and usual standards of practice of
prudent mortgage loan master servicers. Furthermore, the Master
Servicer shall oversee and consult with the Servicer as necessary from time
to
time to carry out the Master Servicer’s obligations hereunder, shall receive,
review and evaluate all reports, information and other data provided to the
Master Servicer by the Servicer and shall cause the Servicer to perform and
observe the covenants, obligations and conditions to be performed or observed
by
the Servicer under the Servicing Agreement. The Master Servicer shall
independently and separately monitor the Servicer’s servicing activities with
respect to each related Mortgage Loan, reconcile the results of such monitoring
with such information provided in the previous sentence on a monthly basis
and
coordinate corrective adjustments to the Servicer’s and Master Servicer’s
records, and based on such reconciled and corrected information, prepare the
statements specified in Section 4.04 and any other information and statements
required hereunder. The Master Servicer shall reconcile the results
of its Mortgage Loan monitoring with the actual remittances of the Servicer
to
the Collection Account pursuant to the Servicing Agreement.
In
accordance with the standards of the preceding paragraph and to the extent
the
Servicer does not make such advance, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the payment
of
taxes and assessments on the Mortgaged Properties, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.07, and further as provided in Section
3.08. The costs incurred by the Master Servicer, if any, in effecting
the timely payment of taxes and assessments on the Mortgaged Properties and
related insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Scheduled Principal
Balances of the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
Section
3.02. Monitoring
of Servicer.
(a) The
Master Servicer shall be responsible for reporting to the Trustee, the Trust
Administrator and the Depositor any non-compliance by the Servicer with its
duties under the Servicing Agreement. In the review of the Servicer’s
activities, the Master Servicer may rely upon an officer’s certificate of the
Servicer with regard to the Servicer’s compliance with the terms of its
Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that the Servicer should be terminated in accordance with
its Servicing Agreement, or that a notice should be sent pursuant to the
Servicing Agreement with respect to the occurrence of an event that, unless
cured, would constitute grounds for such termination, the Master Servicer shall
notify the Depositor, the Trust Administrator and the Trustee thereof and the
Master Servicer shall issue such notice or take such other action as it deems
appropriate.
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(b) The
Master Servicer, for the benefit of the Trustee, the Trust Administrator and
the
Certificateholders, shall enforce the obligations of the Servicer under the
Servicing Agreement, and shall, in the event that the Servicer fails to perform
its obligations in accordance with the Servicing Agreement, subject to the
preceding paragraph, terminate the rights and obligations of the Servicer
thereunder and act as successor Servicer of the related Mortgage Loans or cause
the Trustee to enter into a new Servicing Agreement with a successor Servicer
selected by the Master Servicer; provided, however, it is
understood and acknowledged by the parties hereto that there will be a period
of
transition (not to exceed 90 days) before the actual servicing functions can
be
fully transferred to such successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims, termination
of
Servicing Agreement and the pursuit of other appropriate remedies, shall be
in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except
to
the extent that the Master Servicer shall have received reasonable indemnity
for
its costs and expenses in pursuing such action.
(c) To
the extent that the costs and expenses of the Master Servicer related to any
termination of the Servicer, appointment of a successor Servicer or the transfer
and assumption of servicing by the Master Servicer with respect to the Servicing
Agreement (including, without limitation, (i) all legal costs and expenses
and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Servicer as a result of an event of default by
the
Servicer and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor servicer to service the
Mortgage Loans in accordance with the Servicing Agreement) are not fully and
timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Collection
Account.
(d) The
Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in the Servicing
Agreement.
(e) If
the Master Servicer acts as Servicer, it will not assume liability for the
representations and warranties of the Servicer, if any, that it
replaces.
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(f) If
the Servicer fails to make its required payment of Compensating Interest on
any
Distribution Date, the Master Servicer will be required to make such payment
of
Compensating Interest to the same extent that the Servicer was required to
make
such payment of Compensating Interest.
(g) To
the extent the Servicer is obligated under the Servicing Agreement to procure
the consent of the Master Servicer in connection with the Servicer’s engagement
of a Subservicer to perform any servicing responsibilities under the Servicing
Agreement with respect to the related Mortgage Loans, the Master Servicer will
only give such consent if that Subservicer first agrees in writing with the
Servicer and the Master Servicer to deliver an Annual Statement of Compliance,
an Assessment of Compliance and an Accountant’s Attestation in such manner and
at such times that permit that Servicer and the Master Servicer to comply with
Sections 3.21 and 3.22 of this Agreement.
(h) The
Master Servicer shall enforce any negative covenant in the Servicing Agreement
which prohibits the Servicer from outsourcing one or more separate servicing
functions under the Servicing Agreement with respect to the Mortgage Loans
to
any Subcontractor unless that Subcontractor first agrees in writing with the
Servicer and the Master Servicer to deliver an Assessment of Compliance and
an
Accountant’s Attestation in such manner and at such times that permits that
Servicer and the Master Servicer to comply with Section 3.22 of this
Agreement.
Section
3.03. Monitoring
of Custodian.
So
long
as SunTrust Bank shall be the Custodian, SunTrust Bank shall promptly notify
the
Trustee and Master Servicer in the event SunTrust Bank’s long-term senior
unsecured debt rating falls below “BBB”, in the case of Fitch, or “BBB-”, in the
case of S&P, upon receipt of such notice, the Trustee shall terminate the
Custodian with respect to the Mortgage Loans and shall transfer the respective
Mortgage File for each Mortgage Loan to a successor custodian acceptable to
the
Rating Agencies and otherwise in accordance with this Agreement.
Section
3.04. Rights
of the Depositor and the Trustee in Respect of the Master
Servicer.
The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer hereunder
and in connection with any such defaulted obligation to exercise the related
rights of the Master Servicer hereunder; provided that the Master
Servicer shall not be relieved of any of its obligations hereunder by virtue
of
such performance by the Depositor or its designee. Neither the
Trustee nor the Depositor shall have any responsibility or liability for any
action or failure to act by the Master Servicer or the Servicer nor shall the
Trustee or the Depositor be obligated to supervise the performance of the Master
Servicer hereunder or the Servicer under the Servicing Agreement or
otherwise.
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Section
3.05. Trustee
to Act as Master Servicer.
In
the
event that the Master Servicer shall for any reason no longer be the Master
Servicer hereunder (including by reason of a Master Servicer Event of
Termination), the Trustee or its successor shall in accordance with Section
7.02
thereupon assume all of the rights and obligations of the Master Servicer
hereunder arising thereafter (except that the Trustee shall not be (i) liable
for losses of the predecessor Master Servicer pursuant to Section 3.09 hereof
or
any acts or omissions of the predecessor Master Servicer hereunder), (ii)
obligated to make Advances if it is prohibited from doing so by applicable
law,
(iii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder including, but not limited to, repurchases or substitutions of
Mortgage Loans pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for
expenses of the Master Servicer pursuant to Section 2.03 hereof, (v) deemed
to
have made any representations and warranties of the Master Servicer pursuant
to
Section 2.09 hereunder) or (vi) obligated to perform any obligation of the
Master Servicer under Section 3.21, 3.22 or 9.12 with respect to any periods
during which the Trustee was not the Master Servicer). Any such
assumption shall be subject to Section 7.02 hereof. If the Master
Servicer shall for any reason no longer be the Master Servicer (including by
reason of any Master Servicer Event of Termination), the Trustee or its
successor may, but shall not be obligated to, succeed to any rights and
obligations of the Master Servicer under each subservicing
agreement.
The
Master Servicer shall, upon request of the Trustee, but at the expense of the
Master Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement
and
the Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the orderly
and efficient transfer of each subservicing agreement or substitute subservicing
agreement to the assuming party.
The
Trustee or successor master servicer shall be entitled to be reimbursed from
the
Master Servicer for all costs associated with the transfer of master servicing
from the Master Servicer, including, without limitation, any costs or expenses
associated with the complete transfer of all master servicing data and the
completion, correction or manipulation of such master servicing data as may
be
required by the Trustee or successor master servicer to correct any errors
or
insufficiencies in the master servicing data or otherwise to enable the Trustee
or successor master servicer to master service the Mortgage Loans properly
and
effectively.
If
the
Master Servicer does not pay such reimbursement within thirty (30) days of
its
receipt of an invoice therefor, such reimbursement shall be an expense of the
Issuing Entity and the Trustee shall be entitled to such reimbursement from
amounts on deposit in the Distribution Account pursuant to Section 3.10(b)(iii);
provided that the Master Servicer shall reimburse the Issuing Entity for
any such expense incurred by the Issuing Entity.
Section
3.06. Protected
Accounts.
(a) The
Master Servicer shall enforce the obligation of the Servicer to establish and
maintain a Protected Account in accordance with the Servicing Agreement, with
records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan
basis, into which accounts shall be deposited within 48 hours (or as of such
other time specified in the Servicing Agreement) of receipt all collections
of
principal and interest on any Mortgage Loan or amounts received with respect
to
any REO Property, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, and advances made from the Servicer’s own funds (less
servicing compensation as permitted by the Servicing Agreement in the case
of
the Servicer) and all other amounts to be deposited in the Protected
Account. The Master Servicer is hereby authorized to make withdrawals
from and deposits to the related Protected Account for purposes required or
permitted by this Agreement. Permitted Investments of funds in
Protected Accounts must mature at least one Business Day before the subsequent
Servicer Remittance Date.
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(b) In
accordance with the terms of the Servicing Agreement, amounts on deposit in
a
Protected Account shall be invested by the Servicer in Permitted
Investments. The income earned from investments made pursuant to this
Section 3.06 shall be paid to the Servicer under the Servicing Agreement, and
the risk of loss of moneys required to be distributed to the Certificateholders
resulting from such investments shall be borne by and be the risk of the
Servicer. The Servicer (to the extent provided in the Servicing
Agreement) shall deposit the amount of any such loss in the Protected Account
within two Business Days of receipt of notification of such loss but not later
than the Servicer Remittance Date.
Section
3.07. Collection
of Mortgage Loan Payments; Collection Account; Distribution
Account.
(a) The
Master Servicer shall enforce the obligation of the Servicer to collect all
payments called for under the terms and provisions of the Mortgage Loans to
the
extent such procedures shall be consistent with the Servicing Agreement and
the
terms and provisions of any related Required Insurance Policy.
(b) The
Master Servicer shall establish and maintain a Collection Account, which account
may be deemed to be a sub-account of the Distribution Account, into which the
Master Servicer shall deposit or cause to be deposited within two Business
Days
of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by the Servicer or received by it in respect
of Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off Date)
and the following amounts required to be deposited hereunder:
(i) all
payments on account of principal on the Mortgage Loans, including Principal
Prepayments;
(ii) all
payments on account of interest on the Mortgage Loans, net of the related
Servicing Fee;
(iii) all
Liquidation Proceeds (including Insurance Proceeds), other than proceeds
to be
applied to the restoration or repair of the Mortgaged Property or released
to
the Mortgagor in accordance with the Servicer’s or Master Servicer’s normal
servicing procedures, and all Recoveries;
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(iv) any
amount required to be deposited by the Master Servicer pursuant to Section
3.07(e) in connection with any losses on Permitted Investments;
(v) any
amounts required to be deposited by the Master Servicer pursuant to Section
2.01(e), Section 3.15(b) and 3.15(d), and in respect of net monthly rental
income from REO Property pursuant to Section 3.15 hereof;
(vi) all
Substitution Adjustment Amounts;
(vii) all
Advances made by the Master Servicer pursuant to Section 4.01;
(viii) any
prepayment penalties received from the Servicer;
(ix) any
Compensating Interest payments;
(x) any
amounts deposited by the Master Servicer in connection with a deductible
clause
in any blanket hazard insurance policy in respect of the Mortgage
Loans;
(xi) all
proceeds of any primary mortgage guaranty insurance policy in respect of
the
Mortgage Loans;
(xii) [reserved];
and
(xiii) any
other amounts required to be deposited hereunder.
(xiv) In
the event that the Master Servicer shall deposit into the Collection Account
any
amount not required to be deposited, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding. The Master Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section. All
funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.10.
(xv) [Reserved].
(xvi) The
Trust Administrator shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trust Administrator
shall, promptly upon receipt but no later than on the Distribution Account
Deposit Date, deposit in the Distribution Account and retain therein the
following:
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(xvii) the
aggregate amount remitted by the Master Servicer to the Trust Administrator
pursuant to Section 3.10(a)(ix)(a);
(xviii) any
amount deposited by the Master Servicer or the Trust Administrator pursuant
to
Section 3.07(e) in connection with any losses on Permitted
Investments;
(xix) [reserved];
(xx) [reserved];
and
(xxi) any
other amounts described hereunder which are required to be deposited in the
Distribution Account.
In
the
event that the Master Servicer shall remit any amount not required to be
remitted, it may at any time direct the Trust Administrator in writing to
withdraw such amount from the Distribution Account, any provision herein to
the
contrary notwithstanding. Such direction may be accomplished by
delivering an Officer’s Certificate to the Trust Administrator which describes
the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trust Administrator
in trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.10. In no event
shall the Trust Administrator incur liability for withdrawals from the
Distribution Account at the direction of the Master Servicer.
(c) Each
institution at which the Collection Account is maintained shall invest the
funds
on deposit in the Collection Account as directed in writing by the Master
Servicer, in Permitted Investments. Each institution at which the
Distribution Account is maintained shall invest the funds on deposit in the
Distribution Account as directed in writing by the Trust Administrator, in
Permitted Investments. Funds invested in the Collection Account shall
mature not later than the Business Day next preceding the related Distribution
Account Deposit Date (except that if such Permitted Investment is an obligation
of or is managed by the institution that maintains such account, then such
Permitted Investment shall mature not later than such Distribution Account
Deposit Date). The Trust Administrator shall without direction either
(i) hold funds on deposit in the Distribution Account uninvested in a trust
or
deposit account of the Trust Administrator or (ii) invest funds on deposit
in
the Distribution Account in Permitted Investments, which Permitted Investments
shall mature not later than the Business Day next preceding the Distribution
Date (except that if such Permitted Investment is an obligation of or is managed
by the institution that maintains such fund or account, then such Permitted
Investment shall mature not later than such Distribution
Date). Permitted Investments in respect of the Collection Account or
the Distribution Account shall not be sold or disposed of prior to their
maturity. All such Permitted Investments shall be made in the name of
the Trustee, for the benefit of the Certificateholders. All income
and gain net of any losses realized from any such investment of funds on deposit
in the Collection Account shall be for the benefit of the Master Servicer as
master servicing compensation and shall be remitted to it monthly as provided
herein. The amount of any realized losses in the Collection Account
incurred in any such account in respect of any such investments shall promptly
be deposited by the Master Servicer (from its own funds without any right of
reimbursement) in the Collection Account or paid to the Trust Administrator
by
wire transfer of immediately available funds for deposit into the Distribution
Account. All income and gain (net of any losses realized from any
such investment of funds on deposit in the Distribution Account) shall be for
the benefit of the Trust Administrator as compensation and shall be remitted
to
it monthly as provided herein. The amount of any realized losses in
the Distribution Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Trust Administrator in the
Distribution Account. The Trust Administrator shall not be liable for
the amount of any loss incurred in respect of any investment or lack of
investment of funds held in the Collection Account (except to the extent the
Trust Administrator is the obligor and has defaulted thereon) and made in
accordance with this Section 3.07. In the absence of written
instructions by the Trust Administrator, all funds on deposit in the
Distribution Account shall remain uninvested.
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(d) The
Master Servicer shall give notice to the Trustee, the Trust Administrator,
each
Rating Agency and the Depositor of any proposed change of the location of the
Collection Account prior to any change thereof. The Trust
Administrator shall give notice to the Trustee, the Master Servicer, each Rating
Agency and the Depositor of any proposed change of the location of the
Distribution Account prior to any change thereof.
(e) Upon
a downgrade in the rating of an institution at which an Eligible Account is
held
below the required ratings set forth in the definition of Eligible Account,
within 30 days of such downgrade, such account will be transferred to an account
meeting the requirements of the definition of Eligible Account; provided,
however, that this transfer requirement may be waived by the applicable Rating
Agency.
Section
3.08. Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
To
the
extent required by the Servicing Agreement and by the related Mortgage Note
and
not violative of current law, the Master Servicer shall enforce the obligations
of the Servicer to establish and maintain one or more accounts (each, an “Escrow
Account”) and deposit and retain therein all collections from the Mortgagors (or
advances by the Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the
Mortgagors. Nothing herein shall require the Master Servicer to
compel the Servicer to establish an Escrow Account in violation of applicable
law.
Section
3.09. Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
The
Master Servicer and the Custodian shall afford and the Master Servicer shall
enforce the obligations of the Servicer, to the extent set forth in the
Servicing Agreement, to afford the Depositor, the Trustee and Trust
Administrator and their respective agents or representatives reasonable access
to all records and documentation regarding the Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement or the
Servicing Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the office designated
by
the Master Servicer, the Servicer or the Custodian, to the extent set forth
in
the Servicing Agreement.
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Upon
reasonable advance notice in writing, the Master Servicer and the Custodian
will
provide or the Master Servicer shall enforce the obligations of the Servicer,
to
the extent set forth in the Servicing Agreement, to provide to each
Certificateholder which is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder to
comply with applicable regulations of the OTS or other regulatory authorities
with respect to investment in the Certificates; provided that the Master
Servicer, the Servicer or the Custodian shall be entitled to be reimbursed
by
each such Certificateholder for actual expenses incurred by the Master Servicer,
the Servicer or the Custodian in providing such reports and access.
Section
3.10. Permitted
Withdrawals from the Collection Account and Distribution
Account.
(a) The
Master Servicer may from time to time make withdrawals from the Collection
Account for the following purposes:
(i) to
pay to the Master Servicer and the Servicer (to the extent not previously
retained or withdrawn by them), the compensation to which they are entitled,
and
to pay to the Master Servicer, earnings on or investment income with respect
to
funds in or credited to the Collection Account plus a monthly fee of 0.0115%
per
annum pursuant to Section 3.19;
(ii) to
reimburse the Servicer or the Master Servicer for unreimbursed Advances made
by
it, such right of reimbursement pursuant to this subclause (ii) being limited
to
amounts received on the Mortgage Loan(s) in respect of which any such Advance
was made;
(iii) to
reimburse the Servicer or the Master Servicer for any Nonrecoverable Advance
previously made;
(iv) to
reimburse the Servicer or the Master Servicer for insured expenses from the
related Insurance Proceeds;
(v) to
reimburse the Servicer or the Master Servicer for (a) unreimbursed Servicing
Advances, the Servicer’s or the Master Servicer’s right to reimbursement
pursuant to this clause (a) with respect to any Mortgage Loan being limited
to
amounts received on such Mortgage Loan(s) which represent late recoveries of
the
payments for which such advances were made pursuant to Section 3.01 or Section
3.06 and (b) for unpaid Servicing Fees as provided in Section 3.15
hereof;
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(vi) to
pay to the purchaser, with respect to each Mortgage Loan or property acquired
in
respect thereof that has been purchased pursuant to Section 2.02 or 2.03, all
amounts received thereon after the date of such purchase;
(vii) to
reimburse the Transferor, the Master Servicer or the Depositor for expenses
or
indemnities incurred by any of them and reimbursable pursuant to Section 6.03
hereof;
(viii) to
withdraw any amount deposited in the Collection Account and not required to
be
deposited therein;
(ix) on
or prior to the Distribution Account Deposit Date, to withdraw (i) an amount
equal to the related Available Funds, for such Distribution Date and (ii) on
or
after the Cross-Over Date only, any Recoveries received during the calendar
month prior to that Distribution Date, and remit by wire transfer of immediately
available funds such amounts to the Trust Administrator for deposit in the
Distribution Account;
(x) to
reimburse the Master Servicer for any costs or expenses incurred by it and
reimbursable pursuant to Section 3.02;
(xi) to
reimburse the Trustee for any costs and expenses incurred by it pursuant to
Section 2.03; and
(xii) to
clear and terminate the Collection Account upon termination of this Agreement
pursuant to Section 10.01 hereof.
The
Master Servicer shall keep and maintain separate accounting, on a Mortgage
Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv), (v) and
(vi). Prior to making any withdrawal from the Collection Account
pursuant to subclause (iii), the Master Servicer shall deliver to the Trust
Administrator an Officer’s Certificate of a Master Servicing Officer indicating
the amount of any previous Advance determined by the Master Servicer to be
a
Nonrecoverable Advance and identifying the related Mortgage Loans(s), and their
respective portions of such Nonrecoverable Advance.
(b) The
Trust Administrator shall withdraw funds from the Distribution Account for
distributions to Certificateholders, in the manner specified in this Agreement
(and withhold from the amounts so withdrawn, the amount of any taxes that it
is
authorized to withhold pursuant to the last paragraph of Section
9.11). In addition, the Trust Administrator may from time to time,
prior to distributions to Certificateholders, make withdrawals from the
Distribution Account for the following purposes:
(i) to
pay to the Trust Administrator the earnings on or investment income, if any,
on
funds in or credited to the Distribution Account;
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(ii) to
withdraw and return to the Master Servicer, with respect to any other amount,
any amount deposited in the Distribution Account and not required to be
deposited therein in accordance with Section 3.07(d);
(iii) to
withdraw any indemnity, expense or other reimbursement owed to it, the Master
Servicer or the Trustee pursuant to this Agreement, including, without
limitation, Section 3.05, Section 7.02, Section 8.02, Section 8.05 and Section
9.05; and
(iv) to
clear and terminate the Distribution Account upon termination of the Agreement
pursuant to Section 10.01 hereof.
Section
3.11. Maintenance
of Hazard Insurance; Maintenance of Primary Insurance Policies.
(a) For
each Mortgage Loan, the Master Servicer shall enforce any obligation of the
Servicer under the Servicing Agreement to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance,
all
in accordance with the provisions of the Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in the Servicing Agreement and that no
earthquake or other additional insurance is to be required of any Mortgagor
or
to be maintained on property acquired in respect of a defaulted loan, other
than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) Pursuant
to Sections 3.07 and 3.08, any amounts collected by the Master Servicer, or
by
the Servicer, under any insurance policies (other than amounts to be applied
to
the restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the Servicing Agreement) shall
be
deposited into the Collection Account, subject to withdrawal pursuant to
Sections 3.07 and 3.08. Any cost incurred by the Master Servicer or
the Servicer in maintaining any such insurance if the Mortgagor defaults in
its
obligation to do so shall be added to the amount owing under the Mortgage Loan
where the terms of the Mortgage Loan so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders and shall
be
recoverable by the Master Servicer or the Servicer pursuant to Sections 3.07
and
3.08.
Section
3.12. Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall (to the extent provided in the Servicing Agreement) cause
the Servicer to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured’s claim) as shall be necessary to realize recovery under such
policies. Any proceeds disbursed to the Master Servicer (or disbursed
to the Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Collection
Account upon receipt, except that any amounts realized that are to be applied
to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
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Section
3.13. Maintenance
of the Primary Insurance Policies.
(a) The
Master Servicer shall not take, or permit the Servicer (to the extent such
action is prohibited under the Servicing Agreement) to take, any action that
would result in noncoverage under any applicable Primary Insurance Policy of
any
loss which, but for the actions of such Master Servicer or Servicer, would
have
been covered thereunder. The Master Servicer shall use its best
reasonable efforts to cause the Servicer (to the extent required under the
Servicing Agreement) to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the Servicing Agreement, as
applicable. The Master Servicer shall not, and shall not permit the
Servicer (to the extent required under the Servicing Agreement) to, cancel
or
refuse to renew any such Primary Insurance Policy that is in effect at the
date
of the initial issuance of the Mortgage Note and is required to be kept in
force
hereunder except in accordance with the provisions of this Agreement and the
Servicing Agreement, as applicable.
(b) The
Master Servicer agrees to present, or to cause the Servicer (to the extent
required under the Servicing Agreement) to present, on behalf of the Trustee
and
the Certificateholders, claims to the insurer under any Primary Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to Sections 3.07 and 3.08, any
amounts collected by the Master Servicer or the Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Collection Account,
subject to withdrawal pursuant to Sections 3.07 and 3.08.
Section
3.14. Realization
upon Defaulted Mortgage Loans.
The
Master Servicer shall cause the Servicer (to the extent required under the
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the Servicing Agreement.
Section
3.15. REO
Property.
(a) In
the event the Trust Fund acquires ownership of any REO Property in respect
of
any related Mortgage Loan, the deed or certificate of sale shall be issued
to
the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided
in the Servicing Agreement, cause the Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the Servicer
to protect and conserve such REO Property in the manner and to the extent
required by the Servicing Agreement, subject to the REMIC
Provisions.
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(b) The
Master Servicer shall, to the extent required by the Servicing Agreement, cause
the Servicer to deposit all funds collected and received in connection with
the
operation of any REO Property in the Protected Account.
(c) The
Master Servicer and the Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Monthly Advances and other unreimbursed advances as well as any unpaid Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided that any such unreimbursed Monthly
Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as
the
case may be, prior to final disposition, out of any net rental income or other
net amounts derived from such REO Property.
(d) The
Liquidation Proceeds from the final disposition of the REO Property, net of
any
payment to the Master Servicer and the Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in
the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the Collection
Account.
In
the
event that the Trust Fund acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Master Servicer shall enforce the obligation of the Servicer to dispose
of
such Mortgaged Property prior to the close of the third calendar year after
the
year in which the Trust Fund acquires such Mortgaged Property unless the
Servicer shall have applied for and received an extension of such period from
the Internal Revenue Service, in which case the Trust Fund may continue to
hold
such Mortgaged Property for the period of such
extension. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or
on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as “foreclosure property”
within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC
hereunder to the imposition of any federal, state or local income taxes on
the
income earned from such Mortgaged Property under Section 860G(c) of the Code
or
otherwise, unless the Master Servicer or Servicer, as applicable, has agreed
to
indemnify and hold harmless the Trust Fund with respect to the imposition of
any
such taxes.
In
the
event of a default on a Mortgage Loan one or more of whose obligor is not a
United States Person, as that term is defined in Section 7701(a)(30) of the
Code, in connection with any foreclosure or acquisition of a deed in lieu of
foreclosure (together, “foreclosure”) in respect of such Mortgage Loan, the
Master Servicer will cause the Servicer to comply with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage
Loan.
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Section
3.16. Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent provided in the Servicing Agreement, to the extent Mortgage Loans contain
enforceable due on sale clauses, the Master Servicer shall cause the Servicer
to
enforce such clauses in accordance with the Servicing Agreement. If
applicable law prohibits the enforcement of a due-on-sale clause or such clause
is otherwise not enforced in accordance with the Servicing Agreement, and,
as a
consequence, a Mortgage Loan is assumed, the original Mortgagor may be released
from liability in accordance with the Servicing Agreement.
Section
3.17. Trustee
to Cooperate; Release of Mortgage Files.
Upon
(i)
the payment in full of any Mortgage Loan, or the receipt by the Custodian of
a
notification that payment in full will be escrowed in a manner customary for
such purposes or (ii) otherwise in connection with the servicing of any Mortgage
Loan, the Custodian shall, upon receipt of notification from the Servicer
pursuant to the Servicing Agreement which notification shall state that such
payment in full has been deposited in the Collection Account or has otherwise
been escrowed in a manner customary for such purposes, the Custodian shall,
release the related Mortgage File to the Servicer. Upon notification,
the Trustee shall at the Custodian’s direction execute and deliver to the
Custodian the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Custodian, together with the Mortgage Note with
written evidence of cancellation thereon. Expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall
be
chargeable to the related Mortgagor.
If
the
Master Servicer or the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement
or the Servicing Agreement, the Master Servicer or the Servicer shall deliver
or
cause to be delivered to the Trustee, for signature, as appropriate, any court
pleadings, requests for trustee’s sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by
the
Mortgage Note or the Mortgage or otherwise available at law or in
equity.
Subject
to this Section 3.17, the Trustee shall execute, at the written request of
the
Master Servicer, and furnish to the Master Servicer and the Servicer such
documents as are necessary or appropriate to enable the Master Servicer or
the
Servicer to carry out their servicing and administrative duties
hereunder. The Trustee shall not be liable for the actions of the
Master Servicer or the Servicer under such powers of attorney.
Section
3.18. Documents,
Records and Funds in Possession of Master Servicer and Custodian to Be Held
for
the Trustee.
Notwithstanding
any other provisions of this Agreement, the Master Servicer shall forward to
the
Custodian with an instruction to, and the Custodian shall, place within the
Mortgage File and the Master Servicer shall cause the Servicer to transmit
to
the Custodian as required by this Agreement and the Servicing Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer or Servicer from time to time and shall
account fully to the Trustee for any funds received by the Master Servicer
or
Servicer or which otherwise are collected by the Master Servicer, or Servicer
as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage
Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, the Servicer or the Custodian in respect of
any
Mortgage Loans, whether from the collection of principal and interest payments
or from Liquidation Proceeds, including but not limited to, any funds on deposit
in the Collection Account or any Protected Account, shall be held by the Master
Servicer, the Servicer or the Custodian for and on behalf of the Trustee and
shall be and remain the sole and exclusive property of the Issuing Entity,
subject to the applicable provisions of this Agreement and the Servicing
Agreement. Each of the Master Servicer and the Custodian also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Collection Account, Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert
by
legal action or otherwise any claim or right of setoff against any Mortgage
File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Master Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to
the
Master Servicer under this Agreement.
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Section
3.19. Master
Servicing Compensation.
As
compensation for its activities hereunder, the Master Servicer shall be entitled
to retain or withdraw from the Collection Account, in connection with each
Distribution Date, an amount equal to the Master Servicing
Compensation.
Section
3.20. Access
to Certain Documentation.
The
Master Servicer and the Custodian shall provide and the Master Servicer shall
cause the Servicer to provide in accordance with the Servicing Agreement to
the
OTS and the FDIC and to comparable regulatory authorities supervising Holders
of
Subordinate Certificates and the examiners and supervisory agents of the OTS,
the FDIC and such other authorities, access to the documentation regarding
the
Mortgage Loans required by applicable regulations of the OTS and the
FDIC. Such access shall be afforded without charge, but only upon
reasonable and prior written request and during normal business hours at the
offices designated by the Master Servicer, the Custodian and the
Servicer. Nothing in this Section shall limit the obligation of the
Master Servicer, the Custodian and the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Master Servicer, the Custodian or the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute
a
breach of this Agreement. In fulfilling such requests, the Master
Servicer and the Custodian shall not be responsible to determine the sufficiency
of such information.
72
Section
3.21. Annual
Statement as to Compliance.
(a) The
Master Servicer and the Trust Administrator shall deliver or otherwise make
available (and the Master Servicer and Trust Administrator shall cause any
Servicing Function Participant engaged by it to deliver) to the Depositor and
the Trust Administrator on or before March 10 (with a 5 calendar day cure period
but in no event later than March 15) of each year, commencing in March 2008,
an
Officer’s Certificate (an “Annual Statement of Compliance”) stating, as to the
signer thereof, that (A) a review of such party’s activities during the
preceding calendar year or portion thereof and of such party’s performance under
this Agreement or such other applicable Agreement in the case of a Servicing
Function Participant, has been made under such officer’s supervision and (B) to
the best of such officer’s knowledge, based on such review, such party has
fulfilled all its obligations under this Agreement, in all material respects
throughout such year or portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status
thereof. Promptly after receipt of each such Annual Statement of
Compliance, the Depositor shall review such Annual Statement of Compliance
and,
if applicable, consult with each such party, as applicable, as to the nature
of
any failures by such party identified therein, in the fulfillment of any of
such
party’s obligations hereunder.
(b) The
Master Servicer shall enforce any obligation of the Servicer, to the extent
set
forth in the Servicing Agreement, to deliver to the Master Servicer an Annual
Statement of Compliance within the time frame set forth in, and in
such form and substance as may be required pursuant to, the Servicing
Agreement. The Master Servicer shall include all Annual Statements of
Compliance received by it from each servicer with its own Annual Statement
of
Compliance to be submitted to the Trust Administrator pursuant to this
Section.
(c) In
the event the Master Servicer, the Trust Administrator or any Servicing Function
Participant engaged by any such party is terminated or resigns pursuant to
the
terms of this Agreement, or any applicable agreement in the case of a Servicing
Function Participant, as the case may be, such party shall provide an Officer’s
Certificate pursuant to this Section 3.21 or to such applicable agreement,
as
the case may be, notwithstanding any such termination, assignment or
resignation.
Section
3.22. Report
on Assessment of Compliance and Attestation.
(a) (i) By
March 10 (with a 5 calendar day cure period but in no event later than March
15)
of each year, commencing in March 2008, the Master Servicer, the Trust
Administrator and the Custodian, each at its own expense, shall furnish or
otherwise make available, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the Trust
Administrator and the Depositor, a report on an assessment of compliance with
the Relevant Servicing Criteria in the form of Exhibit Q hereto, (an “Assessment
of Compliance”) that contains (A) a statement by such party of its
responsibility for assessing compliance with the Relevant Servicing Criteria,
(B) a statement that such party used the Servicing Criteria to assess compliance
with the Relevant Servicing Criteria, (C) such party’s assessment of compliance
with the Relevant Servicing Criteria as of and for the fiscal year covered
by
the Form 10-K required to be filed pursuant to Section 9.12(b), including,
if
there has been any material instance of noncompliance with the Relevant
Servicing Criteria, a discussion of each such failure and the nature and status
thereof, and (D) a statement that a registered public accounting firm has issued
an attestation report on such party’s assessment of compliance with the Relevant
Servicing Criteria as of and for such period.
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(ii) No
later than the end of each fiscal year for the Trust Fund for which a Form
10-K
is required to be filed, the Master Servicer and the Custodian shall each
forward to the Trust Administrator the name of each Servicing Function
Participant engaged by it and what Relevant Servicing Criteria will be addressed
in the Assessment of Compliance prepared by such Servicing Function Participant
(provided that the Master Servicer need not provide such information to
the Trust Administrator so long as the Master Servicer and the Trust
Administrator are the same Person). When the Master Servicer, the
Custodian and the Trust Administrator (or any Servicing Function Participant
engaged by either of them) submit their Assessments of Compliance to the Trust
Administrator, such parties will also at such time include the Assessment of
Compliance and Accountant’s Attestation pursuant to Section 3.22(b)(i) of each
Servicing Function Participant engaged by it.
(iii) Promptly
after receipt of each Assessment of Compliance, (A) the Depositor shall
review each such report and, if applicable, consult with the Master Servicer,
the Trust Administrator, the Custodian and any Servicing Function Participant
engaged by any such party as to the nature of any material instance of
noncompliance with the Relevant Servicing Criteria by each such party, and
(B) the Trust Administrator shall confirm that the Assessments of
Compliance, taken as a whole, address all of the Servicing Criteria and taken
individually address the Relevant Servicing Criteria for each party as set
forth
on Exhibit X and on any similar exhibit set forth in each Servicing Agreement
in
respect of the Servicer and notify the Depositor of any exceptions.
(iv) The
Master Servicer shall enforce any obligation of the Servicer, to the extent
set
forth in the Servicing Agreement, to deliver to the Master Servicer an annual
Assessment of Compliance within the time frame set forth in, and in such form
and substance as may be required pursuant to, the Servicing
Agreement. The Master Servicer shall include all Assessments of
Compliance received by it from the Servicer with its own Assessment of
Compliance to be submitted to the Trust Administrator pursuant to this
Section.
In
the
event the Master Servicer, the Trust Administrator, the Custodian or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under, or resigns pursuant to, the terms of this
Agreement, or any other applicable agreement, as the case may be, such party
shall provide a report on assessment of compliance pursuant to this Section
3.22, or to such other applicable agreement, notwithstanding any such
termination, assignment or resignation.
74
(b) (i) By
March 10 (with a 5 calendar day cure period but in no event later than March
15)
of each year, commencing in March 2008, the Master Servicer, the Trust
Administrator and the Custodian, each at its own expense, shall cause, and
each
such party shall cause any Servicing Function Participant engaged by it to
cause, each at its own expense, a registered public accounting firm (which
may
also render other services to the Master Servicer, the Custodian, the Trust
Administrator, or such other Servicing Function Participants, as the case may
be) that is a member of the American Institute of Certified Public Accountants
to furnish an attestation report to the Trust Administrator and the Depositor
(an “Accountant’s Attestation”), to the effect that (A) it has obtained a
representation regarding certain matters from the management of such party,
which includes an assertion that such party has complied with the Relevant
Servicing Criteria, and (B) on the basis of an examination conducted by such
firm in accordance with standards for attestation engagements issued or adopted
by the PCAOB, it is expressing an opinion as to whether such party’s compliance
with the Relevant Servicing Criteria was fairly stated in all material respects
or it cannot express an overall opinion regarding such party’s assessment of
compliance with the Relevant Servicing Criteria. In the event that an
overall opinion cannot be expressed, such registered public accounting firm
shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not
contain restricted use language.
(ii) Promptly
after receipt of such Assessment of Compliance and Accountant’s Attestation, the
Trust Administrator shall confirm that each assessment submitted pursuant to
Section 3.22(a)(i) is coupled with an attestation that appears on its face
to
meet the requirements of this Section and notify the Depositor of any
exceptions.
(iii) The
Master Servicer shall enforce any obligation of the Servicer, to the extent
set
forth in the Servicing Agreement, to deliver to the Master Servicer an
attestation within the time frame set forth in, and in such form and substance
as may be required pursuant to, the Servicing Agreement. The Master
Servicer shall include each such attestation furnished to it by the Servicer
with its own attestation to be submitted to the Trust Administrator pursuant
to
this Section.
In
the
event the Master Servicer, the Trust Administrator, the Custodian, the Servicer
or any Servicing Function Participant engaged by any such party is terminated,
assigns its rights and duties under, or resigns pursuant to the terms of, this
Agreement or any applicable Custodial Agreement, Servicing Agreement or
sub-servicing agreement, as the case may be, such party shall cause a registered
public accounting firm to provide an attestation pursuant to this Section 3.22,
or such other applicable agreement, notwithstanding any such termination,
assignment or resignation.
(c) (i) The
Master Servicer agrees to indemnify and hold harmless each of the Depositor
and
each Person, if any, who “controls” the Depositor within the meaning of the
Securities Act and its respective officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
that such Person may sustain arising out of third party claims based on (A)
the
failure of the Master Servicer (or any Servicing Function Participant engaged
by
it) to deliver or cause to be delivered when required any Assessment of
Compliance or Accountant’s Attestation required pursuant to Section 3.22(a)(i)
or 3.22(b)(i), as applicable, or (B) any material misstatement or omission
contained in any Assessment of Compliance provided pursuant to
Section 3.22(a)(i).
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(ii) The
Trust Administrator agrees to indemnify and hold harmless the Depositor and
each
Person, if any, who “controls” the Depositor within the meaning of the
Securities Act and its officers, directors and affiliates from and against
any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses that such Person
may sustain arising out of third party claims based on (i) the failure of the
Trust Administrator (or any Servicing Function Participant engaged by it) to
deliver when required any Assessment of Compliance or Accountant’s Attestation
required pursuant to Section 3.22(a)(i) or 3.22(b)(i), or (ii) any material
misstatement or omission contained in any Assessment of Compliance provided
pursuant to Section 3.22(a)(i).
(iii) The
Custodian agrees to indemnify and hold harmless the Depositor and each Person,
if any, who “controls” the Depositor within the meaning of the Securities Act
and their respective officers, directors and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses that such Person
may sustain arising out of third party claims based on (i) the failure of the
Custodian (or any Servicing Function Participant engaged by it) to deliver
or
cause to be delivered when required any Assessment of Compliance or Accountant’s
Attestation required pursuant to Section 3.22(a)(i) or 3.22(b)(i) or (ii) any
material misstatement or omission contained in any Assessment of Compliance
provided pursuant to Section 3.22(a)(i).
(d) Each
of the parties hereto acknowledges and agrees that the purpose of this Section
3.22 is to facilitate compliance by the Transferor and the Depositor with the
provisions of Regulation AB, as such may be amended or clarified from time
to
time. Therefore, each of the parties agrees that the parties’
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation
AB
and the parties shall comply, to the extent practicable from a timing and
information systems perspective (and to the extent the requesting party will
pay
any increased cost of the Trustee resulting from such request provided that
such
request results in extraordinary expenses), with requests made by the Transferor
or the Depositor for delivery of additional or different information as the
Transferor or the Depositor may determine in good faith is necessary to comply
with the provisions of Regulation AB.
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Section
3.23. Errors
and Omissions Insurance; Fidelity Bonds.
The
Master Servicer shall, for so long as it acts as Master Servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and (b) a fidelity bond in respect of its officers, employees
and agents. Each such policy or policies shall be in such form and
such amount generally acceptable for entities serving as master
servicer. In the event that any such policy or bond ceases to be in
effect, the Master Servicer shall obtain a comparable replacement policy or
bond
from an insurer or issuer, meeting the requirements set forth above as of the
date of such replacement.
ARTICLE
IV
DISTRIBUTIONS
AND SERVICING ADVANCES
Section
4.01. Advances.
The
Master Servicer shall deposit in the Distribution Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an Advance in an amount equal to the difference between (x) with respect
to
each Scheduled Payment due on a Mortgage Loan that is delinquent (other than
as
a result of a Relief Act Reduction) and for which the Servicer was required
to
make an Advance pursuant to the Servicing 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 Advance. Subject to the foregoing, the Master
Servicer shall continue to make such Advances for so long as the Servicer is
required to do so under the Servicing Agreement. If applicable, on
the Distribution Account Deposit Date, the Master Servicer shall deliver an
Officer’s Certificate to the Trust 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 Advance. Any
amounts deposited by the Master Servicer pursuant to this Section 4.01 shall
be
net of the Servicing Fee and the Master Servicing Compensation, if applicable,
for the related Mortgage Loans.
Section
4.02. Priorities
of Distribution.
(a) On
each Distribution Date, the Trust Administrator shall withdraw the related
Group
Available Funds (to the extent on deposit in the Distribution Account) from
the
Distribution Account and, pursuant to written instruction received from the
Master Servicer as set forth in Section 4.04(a), upon which it may conclusively
rely, apply such funds, first to distributions in respect of the Subsidiary
and
Middle REMIC Regular Interests, as provided in Section 4.02(g), and then to
distributions on the Certificates in the following order and priority and,
in
each case, to the extent of such Group Available Funds, subject to adjustment
in
accordance with Sections 4.02(b), 4.02(d) and 4.02(d):
77
(i) With
respect to the Group 1 Certificates, from the Group 1 Available Funds; with
respect to the Group 2 Certificates, from the Group 2 Available Funds; with
respect to the Group 3 Certificates, from the Group 3 Available Funds; with
respect to the Group 4 Certificates, from the Group 4 Available Funds; with
respect to the Group 5 Certificates, from the Group 5 Available Funds; and
with
respect to the Subordinate Certificates, from the Group 1 Available Funds,
Group
2 Available Funds, Group 3 Available Funds, Group 4 Available Funds and Group
5
Available Funds as follows:
first,
concurrently,
(A) to
the Group 1 Certificates, pro rata based on the Accrued Certificate Interest
of
such Class, an amount allocable to interest equal to the related Accrued
Certificate Interest; and
(B) to
the Group 2 Certificates, pro rata based on the Accrued Certificate Interest
of
such Class, an amount allocable to interest equal to the related Accrued
Certificate Interest; and
(C) to
the Group 3 Certificates, pro rata based on the Accrued Certificate Interest
of
such Class, an amount allocable to interest equal to the related Accrued
Certificate Interest;
(D) to
the Group 4 Certificates, pro rata based on the Accrued Certificate Interest
of
such Class, an amount allocable to interest equal to the related Accrued
Certificate Interest; and
(E) to
the Group 5 Certificates, pro rata based on the Accrued Certificate Interest
of
such Class, an amount allocable to interest equal to the related Accrued
Certificate Interest.
in
each
case (clause (A), (B), (C), (D) and (E) of this paragraph), any shortfall shall
be allocated among such Classes described in the related paragraph in proportion
to the amount of the Accrued Certificate Interest that would have been
distributed in the absence of such shortfall; and
second,
concurrently,
(A) from
the Available Funds for Loan Group 1, the Senior Optimal Principal Amount for
Loan Group 1 for that Distribution Date, sequentially, as follows:
(1) concurrently,
to the Class A-LR and Class A-UR certificates, pro rata, based on their
Certificate Principal Balances, until their respective Certificate Principal
Balances have been reduced to zero; and
78
(2) to
the Class 1-A certificates, based on its Certificate Principal Balance, until
its Certificate Principal Balance has been reduced to zero;
(B) from
the Available Funds for Loan Group 2, to the Group 2 Certificates, the
Senior Optimal Principal Amount for Loan Group 2 for that Distribution
Date, concurrently, to the Class 2-A-1 and Class 2-A-2 certificates, pro rata,
based on their Certificate Principal Balances, until their respective
Certificate Principal Balances are reduced to zero;
(C) from
the Available Funds for Loan Group 3, to the Group 3 Certificates, the
Senior Optimal Principal Amount for Loan Group 3 for that Distribution
Date, concurrently, to the Class 3-A-1 and Class 3-A-2 certificates, pro rata,
based on their Certificate Principal Balances, until their respective
Certificate Principal Balances are reduced to zero;
(D) from
the Available Funds for Loan Group 4, to the Group 4 Certificates, the
Senior Optimal Principal Amount for Loan Group 4 for that Distribution
Date, concurrently, to the Class 4-A-1 and Class 4-A-2 certificates, pro rata,
based on their Certificate Principal Balances, until their respective
Certificate Principal Balances are reduced to zero; and
(E) from
the Available Funds for Loan Group 5, to the Group 5 Certificates, the
Senior Optimal Principal Amount for Loan Group 5 for that Distribution
Date, concurrently, to the Class 5-A-1 and Class 5-A-2 certificates, pro rata,
based on their Certificate Principal Balances, until their respective
Certificate Principal Balances are reduced to zero;
fourth,
to the Subordinate Certificates from the remaining Available Funds for each
Loan
Group in the aggregate, subject to Section 4.02(b) and 4.02(d), in the following
order of priority:
(F) to
the Class B-1 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(G) to
the Class B-1 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero;
(H) to
the Class B-2 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(I) to
the Class B-2 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero;
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(J) to
the Class B-3 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(K) to
the Class B-3 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero;
(L) to
the Class B-4 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(M) to
the Class B-4 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero;
(N) to
the Class B-5 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(O) to
the Class B-5 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero;
(P) to
the Class B-6 Certificates, an amount allocable to interest equal to the Accrued
Certificate Interest for such Class for such Distribution Date;
(Q) to
the Class B-6 Certificates, an amount allocable to principal equal to its
Allocable Share for such Distribution Date until the Class Principal Balance
of
such Class is reduced to zero; and
fifth,
to the Class A-LR Certificate, any remaining funds in the Subsidiary REMIC,
and
to the Class A-UR Certificate, any remaining funds in each remaining
REMIC.
(b) On
each Distribution Date, the amount referred to in clause (i) of the definition
of Accrued Certificate Interest for each Class of Certificates shall be reduced
by (i) the related Class’s pro rata share of Net Prepayment Interest Shortfalls
with respect to the Mortgage Loans in the related Loan Group, based on such
Class’s Accrued Certificate Interest for such Distribution Date without taking
into account such Net Prepayment Interest Shortfalls and (ii) the related
Class’s pro rata share (based on such Class’ pro rata share without taking into
account any such reduction) of (A) after the Special Hazard Coverage Termination
Date with respect to each Mortgage Loan in the related Loan Group that became
a
Special Hazard Mortgage Loan during the calendar month preceding the month
of
such Distribution Date, the excess of one month’s interest at the related Net
Mortgage Rate on the Scheduled Principal Balance of such Mortgage Loan as of
the
Due Date in such month over the amount of Liquidation Proceeds applied as
interest on such Mortgage Loan with respect to such month, (B) after the
Bankruptcy Coverage Termination Date with respect to each Mortgage Loan in
the
related Loan Group or Loan Groups that became subject to a Bankruptcy Loss
during the calendar month preceding the month of such Distribution Date, the
interest portion of the related Deficient Valuation, (C) each Relief Act
Reduction incurred on a Mortgage Loan in the related Loan Group or Loan Groups,
during the calendar month preceding the month of such Distribution Date and
(D)
after the Fraud Loss Coverage Termination Date with respect to each Mortgage
Loan in the related Loan Group or Loan Groups that became a Fraud Loan during
the calendar month preceding the month of such Distribution Date, the excess
of
one month’s interest at the related Net Mortgage Rate on the Scheduled Principal
Balance of such Mortgage Loan as of the Due Date in such month over the amount
of Liquidation Proceeds applied as interest on such Mortgage Loan with respect
to such month.
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(c) Notwithstanding
the priority and allocation contained in Section 4.02(a)(i) priority fourth,
if
with respect to any Class of Subordinate Certificates on any Distribution Date,
such Class has not satisfied the related Class Prepayment Distribution Trigger,
no distribution of amounts pursuant to clauses (ii) and (iii) of the definition
of the Subordinate Optimal Principal Amount will be made to any such Classes
(the “Restricted Classes”) and such amounts otherwise distributable to the
Restricted Classes shall be distributed to any Classes of Subordinate
Certificates that are not Restricted Classes, having lower numerical Class
designations than such Restricted Classes, pro rata based on their respective
Class Principal Balances immediately prior to such Distribution
Date. The calculation of any amount to be distributed under this
Section 4.02(c) shall be made by the Master Servicer.
(d) On
each Distribution Date, after application of Group 1 Available Funds, Group
2
Available Funds, Group 3 Available Funds, Group 4 Available Funds and Group
5
Available Funds in accordance with Section 4.02(a)(i) items first and second,
the Trust Administrator shall effect cross-collateralization among each
Certificate Group in the following priority:
(i) Subject
to Section 4.02(b), to the extent any Accrued Certificate Interest with respect
to any Class of Senior Certificates remains unpaid after application of
Available Funds for the related Loan Group in accordance with Section 4.02(a)(i)
items first and second, Available Funds for the other Loan Groups remaining
after payments on the Senior Certificates related to such other Loan Groups
shall be applied to cover such unpaid Accrued Certificate Interest and, to
the
extent there are insufficient funds to pay such amounts in full, shall be
applied pro rata based on the amounts of such unpaid Accrued Certificate
Interest.
(ii) If
on any Distribution Date, one or more Certificate Groups is an
Undercollateralized Group, the available Subordinate Principal Distribution
Amount for the Subordinate Certificates shall be paid to such
Undercollateralized Group or Groups as principal to the Senior Certificates
of
such Undercollateralized Group or Groups in accordance with the priorities
set
forth in Section 4.02(a)(i) until the aggregate Class Principal Balance of
the
Senior Certificates of each such Undercollateralized Group equals the related
Group Balance of the related Loan Group. If more than one such Certificate
Group
is an Undercollateralized Group, the available Subordinate Principal
Distribution Amount for the Subordinate Certificates shall be distributed
between such Undercollateralized Groups pro rata based on the outstanding
balances of the respective Certificate Groups.
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(iii) On
or after the date on which the Class Principal Balances of all of the Senior
Certificates in any Certificate Group have been reduced to zero, amounts
otherwise distributable as principal on the Subordinate Certificates, up to
the
applicable Apportioned Subordinate Principal Distribution Amount, shall be
paid
pro rata as principal to the remaining Senior Certificates of the other
Certificate Group or Groups in accordance with the priorities set forth in
Section 4.02(a)(i), provided that on such Distribution Date (a) the
Aggregate Subordinate Percentage for the Subordinate Certificates for such
Distribution Date is less than twice the initial Aggregate Subordinate
Percentage for the Subordinate Certificates or (b) the average outstanding
principal balance of the Mortgage Loans delinquent 60 days or more over the
last
six months (including delinquent Mortgage Loans in bankruptcy, and all Mortgage
Loans in foreclosure and REO Properties) as a percentage of the Group
Subordinate Amount is greater than or equal to 50%.
(iv) Any
application of the Subordinate Principal Distribution Amount pursuant to the
preceding paragraphs (ii) and (iii) will reduce distributions to the Subordinate
Certificates of such amount in reverse order of priority pursuant to the
priorities set forth in Section 4.02(a)(i) priority fourth.
(e) [Reserved].
(f) [Reserved].
(g) On
each Distribution Date, Group Available Funds for each Loan Group shall be
applied to distributions on the Subsidiary and Middle REMIC Regular Interests,
as described in the Preliminary Statement, in each case in an amount sufficient
to make the distributions to the Master REMIC.
(h) In
the event that the Mortgage Loans are purchased at the Master Servicer's
election pursuant to Section 10.01(a), the Trust Administrator shall remit
the
amount of any Fair Market Value Excess by wire transfer of immediately available
funds to the holders of the Class A-LR Certificates in accordance with the
instructions of the holders of the Class A-LR Certificates.
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Section
4.03. Allocation
of Realized Losses.
(a) On
or prior to each Distribution Date, the Master Servicer shall determine the
total amount of Realized Losses, including Excess Losses and the allocation
of
such total amount as set forth below. Realized Losses occurring on
the Mortgage Loans shall be allocated as follows:
(i) [reserved];
(ii) any
Realized Loss with respect to any Mortgage Loan (other than an Excess Loss)
shall be allocated first to the Subordinate Certificates in reverse order of
their respective numerical Class designations (beginning with the Class of
Subordinate Certificates then outstanding with the highest numerical Class
designation) until the respective Class Principal Balance of each such Class
is
reduced to zero, and second to the Senior Certificates of the related
Certificate Group pro rata based upon their respective Class Principal Balances
after giving effect to distributions of principal on such Distribution Date
until the Class Principal Balance of each such Class has been reduced to zero;
provided, however, that the losses allocable to the Class 2-A-1 Certificates,
under this paragraph, will instead be allocated to the Class 2-A-2 Certificates
until the Certificate Principal Balance of Class 2-A-2 Certificates has been
reduced to zero, (B) the losses allocable to the Class 3-A-1 Certificates,
under
this paragraph, will instead be allocated to Class 3-A-2 Certificates until
the
Certificate Principal Balance of Class 3-A-2 Certificates has been reduced
to
zero, (C) the losses allocable to the Class 4-A-1 Certificates, under this
paragraph, will instead be allocated to Class 4-A-2 Certificates until the
Certificate Principal Balance of Class 4-A-2 Certificates has been reduced
to
zero, and (D) the losses allocable to the Class 5-A-1 Certificates, under this
paragraph, will instead be allocated to Class 5-A-2 Certificates until the
Certificate Principal Balance of Class 5-A-2 Certificates has been reduced
to
zero;
(iii) any
Excess Losses occurring on any Mortgage Loan contributing to any Loan Group
shall be allocated among (A) (1) the Group 1 Certificates, in the case of an
Excess Loss on a Mortgage Loan contributing to Loan Group 1, (2) the Group
2
Certificates, in the case of an Excess Loss on a Mortgage Loan contributing
to
Loan Group 2, (3) the Group 3 Certificates, in the case of an Excess Loss on
a
Mortgage Loan contributing to Loan Group 3; (4) the Group 4 Certificates, in
the
case of an Excess Loss on a Mortgage Loan contributing to Loan Group 4 and
(5)
the Group 5 Certificates, in the case of an Excess Loss on a Mortgage Loan
contributing to Loan Group 5 and (B) each Class of Subordinate Certificates,
pro
rata based upon their respective Class Principal Balances after giving effect
to
distributions of principal on such Distribution Date of the Group Subordinate
Amount for the Loan Group which incurred the Excess Loss); and
(b) The
Class Principal Balance of the Class of Subordinate Certificates then
outstanding with the highest numerical Class designation shall be reduced on
each Distribution Date by the sum the amount, if any, by which the aggregate
of
the Class Principal Balances of all outstanding Classes of Group 1, Group 2,
Group 3, Group 4 and Group 5 Certificates and Subordinate Certificates (after
giving effect to the distribution of principal and the allocation of Realized
Losses with respect to the Mortgage Loans) exceeds the Aggregate Pool Principal
Balance for the following Distribution Date, less any Deficient Valuations
occurring before the Bankruptcy Loss Coverage Amount has been reduced to zero;
and
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(c) Any
allocation of Realized Losses to a Certificate or any reduction in the
Certificate Principal Balance of a Certificate pursuant to Section 4.03(a)
or
(b) above shall be accomplished by reducing the Certificate Principal Balance
of
such Certificate immediately following the distributions made on the related
Distribution Date in accordance with the definition of “Certificate Principal
Balance” herein; provided that no Realized Loss with respect to any Loan
Group shall be allocated to reduce the Certificate Principal Balance of a Senior
Certificate in any Certificate Group to the extent that such allocation would
reduce the aggregate Certificate Principal Balance of all of the Senior
Certificates and Subordinate Certificates to an amount less than the Aggregate
Pool Principal Balance for the following Distribution Date minus any related
Deficient Valuations occurring before the Bankruptcy Loss Coverage Termination
Date (such limitation, the “Loss Allocation Limitation”).
(d) Prior
to the Cross-Over Date, with respect to any Recoveries received during the
related Prepayment Period with respect to any Mortgage Loans, the Class
Principal Balance of one or more Classes of Certificates that have previously
had Realized Losses allocated, will be increased, as follows:
(i) first,
up to the amount of the Recoveries with respect to any Loan Group, the Class
Principal Balance of each Class of Senior Certificates will be increased, pro
rata, up to the amount of the excess, if any, of (x) unrecovered Realized Losses
previously allocated to each such Class, if any over (y) amounts previously
applied to the increase of the Class Principal Balance of such Class pursuant
to
this Section 4.03(d)(i); and
(ii) second,
up to the amount of the Recoveries related to each Loan Group remaining after
allocation pursuant to the preceding clause (i), the Class Principal Balance
of
each Class of Subordinate Certificates, in order of seniority, will be
increased, by the amount of the excess, if any, of (x) unrecovered Realized
Losses previously allocated to each such Class, if any, over (y) amounts
previously applied to the increase of the Class Principal Balance of such Class
pursuant to this Section 4.03(d)(ii)(4).
(e) With
respect to any Distribution Date on or after the Cross-Over Date, the Trust
Administrator shall distribute the amount of any Recovery on a Mortgage Loan
received during the calendar month prior to that Distribution Date to the
Classes of Senior Certificates of the Certificate Group or Certificate Groups
corresponding to the Loan Group to which the Mortgage Loan for which the
Recovery was received, pro rata, the amount of such Recovery;
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provided,
however, that any distribution to a Class of Certificates pursuant to
this Section 4.03(e) shall not reduce the Class Principal Balance of such
Class.
Section
4.04. Distribution
Date Statements to Certificateholders.
(a) Not
later than two Business Days prior to each Distribution Date, the Master
Servicer shall prepare and make available to the Trust Administrator and not
later than each Distribution Date, the Trust Administrator shall make available
to each Certificateholder, the Depositor, the Trustee and any other interested
parties a statement based in part on information provided by the Servicer
setting forth the following information with respect to the related distribution
(in the case of information furnished pursuant to (i) and (ii) below, the
amounts shall be expressed as a dollar amount per one thousand:
(i) the
amount thereof allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments collected on the Mortgage Loans and
Liquidation Proceeds included therein;
(ii) the
amount thereof allocable to interest, any unpaid Class Interest Shortfall
included in such distribution and any remaining unpaid Class Interest Shortfall
after giving effect to such distribution;
(iii) 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 thereof
as between principal and interest;
(iv) the
Certificate Principal Balance as a dollar amount per minimum denomination
Certificate and the Certificate Principal Balance of each Class of Certificates,
after giving effect to the distribution of principal on such Distribution
Date;
(v) the
Group Balance for each Loan Group on such Distribution Date;
(vi) the
Senior Percentage and Subordinate Percentage for each Certificate Group for
the
following Distribution Date;
(vii) the
aggregate amount of the Servicing Fees with respect to such Distribution
Date;
(viii) the
Pass-Through Rate for each such Class of Certificates with respect to such
Distribution Date;
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(ix) the
amount of Advances included in the distribution on such Distribution Date and
the aggregate amount of Advances outstanding as of the close of business on
such
Distribution Date;
(x) the
number and aggregate principal amounts of Mortgage Loans (A) delinquent
(exclusive of Mortgage Loans in foreclosure) (1) 1 to 29 days (2) 30 to 59
days
(3) 60 to 89 days and (4) 90 or more days and (B) in foreclosure and delinquent
(1) 1 to 29 days (2) 30 to 59 days (3) 60 to 89 days and (4) 90 or more days,
as
of the close of business on the last day of the calendar month preceding such
Distribution Date, in accordance with the MBA methodology;
(xi) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the loan number and Scheduled Principal Balance of such Mortgage
Loan as of the close of business on the last Business Day of the calendar month
preceding such Distribution Date and the date of acquisition
thereof;
(xii) the
total number and principal balance of any REO Properties (and market value,
if
available) as of the close of business on the last Business Day of the calendar
month preceding such Distribution Date;
(xiii) the
Senior Prepayment Percentage for each Certificate Group;
(xiv) the
aggregate amount of Realized Losses, by Loan Group on Mortgage Loans incurred
during the preceding calendar month;
(xv) each
Special Hazard Loss Coverage Amount, each Fraud Loss Coverage Amount and each
Bankruptcy Loss Coverage Amount, in each case as of the related Determination
Date;
(xvi) the
beginning and ending number and aggregate Stated Principal Balance of the
Mortgage Loans;
(xvii) the
related Record Date;
(xviii) the
related Interest Accrual Period;
(xix) the
related Determination Date;
(xx)
the related Distribution Date; and
(xxi) the
amount of cash received with respect to the related Interest Accrual
Period.
(b) The
Trust Administrator’s responsibility for disbursing the above information to the
Master Servicer, the Trustee, the Depositor, the Certificateholders and other
interested parties is limited to the availability, timeliness and the accuracy
of the information provided by the Servicer. The Trust Administrator
will make a copy of each statement provided pursuant to this Section 4.04 (and,
at its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders and other
interested parties, and other parties to this Agreement via the Trust
Administrator’s internet website located at
“xxx.xxxxxxx.xxx”. Assistance in using the internet website can be
obtained by calling the Trust Administrator’s customer service desk at (000)
000-0000. Parties that are unable to use the above distribution
method are entitled to have a paper copy mailed to them via first class mail
by
calling the customer service desk and indicating such. The Trust
Administrator shall have the right to change the way the Distribution Date
Statement is distributed in order to make such distribution more convenient
and/or more accessible and the Trust Administrator shall provide timely and
adequate notification to the Certificateholders and the parties to this
Agreement regarding any such changes.
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The
Trust
Administrator shall also be entitled to rely on but shall not be responsible
for
the content or accuracy of any information provided by third parties (including
the Servicer) for purposes of preparing the Distribution Date Statement and
may
affix thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party
hereto).
As
a
condition to access to the Trust Administrator’s internet website, the Trust
Administrator may require registration and the acceptance of a
disclaimer. The Trust Administrator will not be liable for the
dissemination of information in accordance with this Agreement.
(c) Within
a reasonable period of time after the end of each calendar year, the Trust
Administrator shall cause to be furnished upon request 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), (a)(ii) and (a)(vii) of this
Section 4.04 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of
the Trust Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trust
Administrator pursuant to any requirements of the Code as from time to time
in
effect.
ARTICLE
V
THE
CERTIFICATES
Section
5.01. The
Certificates.
The
Certificates shall be substantially in the forms attached hereto as Exhibit
A
through F. 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 which must be
in
excess of the applicable minimum denomination) and aggregate denominations
per
Class set forth in the Preliminary Statement.
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Subject
to Section 10.02 hereof respecting the final distribution on the Certificates,
on each Distribution Date the Trust 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 Trust Administrator in writing 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
Trust Administrator by an authorized officer. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures were affixed, authorized to sign on behalf of the Trust
Administrator shall bind the Trust Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
countersignature and delivery of such Certificates or did not hold such offices
at the date of such Certificate. No Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless
countersigned by the Trust Administrator by manual signature, and such
countersignature 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
countersignature. On the Closing Date, the Trust Administrator shall
countersign the Certificates to be issued at the direction of the Depositor,
or
any affiliate thereof.
The
Depositor shall provide, or cause to be provided, to the Trust Administrator
on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section
5.02. Certificate
Register; Registration of Transfer and Exchange of
Certificates.
(a) The
Trust Administrator shall maintain, or cause to be maintained in accordance
with
the provisions of Section 5.06 hereof, 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 Trust 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 Trust 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 Trust
Administrator. Whenever any Certificates are so surrendered for
exchange, the Trust 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 Trust Administrator duly executed by the holder
thereof or his attorney duly authorized in writing.
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No
service charge to the Certificateholders shall be made for any registration
of
transfer or exchange of Certificates, but payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates may be required by the Trust
Administrator.
All
Certificates surrendered for registration of transfer or exchange shall be
canceled and subsequently destroyed by the Trust Administrator in accordance
with the Trust Administrator’s customary procedures.
(b) (i) No
transfer of a Private Certificate shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act and
any
applicable state securities laws or is exempt from the registration requirements
under said Act and such state securities laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act
and
such laws, in order to assure compliance with the Securities Act and such laws,
the Certificateholder desiring to effect such transfer (other than the Depositor
or an affiliate of the Depositor) shall certify to the Trust Administrator
in
writing the facts surrounding the transfer in substantially the forms set forth
in Exhibit J (the “Transferor Certificate”). Further, such
Certificateholder’s prospective transferee will either (i) deliver a letter in
substantially the form of either Exhibit K (the “Investment Letter”) or Exhibit
L (the “Rule 144A Letter”) or (ii) deliver to the Trust Administrator at the
expense of the transferor an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Securities Act. 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
Trust Administrator and the Master Servicer shall cooperate with the Depositor,
in accordance with the Depositor’s request, in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor, to the extent in its possession, 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
Trust Administrator, the Depositor, and the Master 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.
(ii) No
transfer of an ERISA-Restricted Certificate shall be made (other than to the
Depositor or an affiliate of the Depositor) unless the Trust Administrator
shall
have received in accordance with Exhibit K or Exhibit L (in the event such
Certificate is a Private Certificate) or paragraph 13 of Exhibit I (in the
event
such Certificate is a Residual Certificate), in form and substance satisfactory
to such Trust Administrator (i) a representation that such transferee is not
an
employee benefit plan or other retirement arrangement subject to Section 406
of
ERISA and/or Section 4975 of the Code, or a person acting for, on behalf of
or
with the assets of, any such plan or arrangement, (ii) in the case of an
ERISA-Restricted Certificate which is the subject of an ERISA-Qualifying
Underwriting, if the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificates
with
funds contained in an “insurance company general account” (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE
95-60”)) and that the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60 or (iii) an Opinion of Counsel
satisfactory to the Trust Administrator, which Opinion of Counsel shall not
be
an expense of the Trustee, the Trust Administrator, the Depositor, the
Transferor, the Master Servicer or the Trust Fund, addressed to the Trust
Administrator to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in non-exempt prohibited
transactions under Section 406 of ERISA and/or Section 4975 of the Code and
will
not subject the Trustee, the Trust Administrator, the Depositor, the Transferor
or the Master Servicer to any obligation in addition to those expressly
undertaken in this Agreement. For purposes of the preceding sentence,
with respect to an ERISA-Restricted Certificate that is not a Private
Certificate or a Residual Certificate, in the event the representation letter
referred to in the preceding sentence is not so furnished, such representation
shall be deemed to have been made to the Trust Administrator by the transferee’s
(including an initial acquirer’s) acceptance of the ERISA-Restricted
Classes. Notwithstanding anything else to the contrary herein, any
purported transfer of an ERISA-Restricted Certificate, to or on behalf of an
employee benefit plan or other retirement arrangement subject to ERISA or the
Code in violation of the above restrictions shall be void and of no
effect.
89
To
the
extent permitted under applicable law (including, but not limited to, ERISA),
the Trust 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 Trust Administrator in accordance with the foregoing
requirements.
Neither
the Trust Administrator nor the Master Servicer shall be required to monitor,
determine or inquire as to compliance with the transfer restrictions with
respect to any ERISA-Restricted Certificate that is a Book-Entry Certificate,
and neither the Trust Administrator nor the Master Servicer shall have any
liability for transfers of any such Book-Entry Certificates made through the
book entry facilities of any Depository or between or among Depository
Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
(iii) [Reserved].
(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:
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(i) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Trust
Administrator of any change or impending change in its status as a Permitted
Transferee.
(ii) No
Ownership Interest in a Residual Certificate may be registered on the Closing
Date or thereafter transferred, and the Trust Administrator shall not register
the Transfer of any Residual Certificate unless, in addition to the certificates
required to be delivered to the Trust Administrator under subparagraph (b)
above, the Trust Administrator shall have been furnished with an affidavit
(a
“Transfer Affidavit”) of the initial owner or the proposed transferee (other
than the Depositor of an affiliate thereof) in the form attached hereto as
Exhibit I.
(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 not a 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 Trust Administrator shall be under no
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 either the Rule 144A
Letter or the Investment Letter. The Trust Administrator shall be
entitled but not obligated to recover from any Holder of a Residual Certificate
that was in fact not a Permitted Transferee at the time it became a Holder
or,
at such subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trust Administrator shall
be paid and delivered by the Trust Administrator to the last preceding Permitted
Transferee of such Certificate.
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(v) The
Depositor shall use its best efforts to make available, upon receipt of written
request from the Trust 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 not a
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 Trust Administrator of an Opinion of Counsel, which Opinion
of
Counsel shall not be an expense of the Trust Fund, the Trustee, the Trust
Administrator, the Transferor or the Master Servicer, to the effect that the
elimination of such restrictions will not cause any 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 Trust 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 not a 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 not a 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 Trust 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 Trust
Administrator shall deal with the Depository as representative 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 representative shall not be deemed to be inconsistent if they
are
made with respect to different Certificate Owners; and (vi) the Trust
Administrator may conclusively 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.
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If
(x)
(i) the Depository or the Depositor advises the Trust Administrator in writing
that the Depository is no longer willing, qualified or able to properly
discharge its responsibilities as Depository, and (ii) the Depositor is unable
to locate a qualified successor, (y) the Depositor notifies the Trust
Administrator in writing, with the consent of the applicable Depository
Participants, that it elects to terminate the book-entry system through the
Depository or (z) after the occurrence of a Master Servicer Event of
Termination, Certificate Owners representing at least 51% of the Certificate
Principal Balance of the Book-Entry Certificates together advise the Trust
Administrator and the Depository through the Depository Participants in writing
that the continuation of a Book-Entry system through the Depository is no longer
in the best interests of the Certificate Owners and the Depository Participants
consent to the termination, the Trust Administrator, upon receipt of notice
of
such event, 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 Trust Administrator
of the related Class of Certificates by the Depository, accompanied by the
instructions from the Depository for registration, the Trust Administrator
shall
issue the Definitive Certificates. None of the Master Servicer, the
Depositor nor the Trust 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 Trust
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 Trust Administrator, to the extent applicable with respect
to
such Definitive Certificates and the Trust Administrator shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided that the Trust 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.
Section
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(a)
any mutilated Certificate is surrendered to the Trust Administrator, or the
Trust Administrator receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (b) there is delivered to the Master
Servicer and the Trust Administrator such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trust Administrator that such Certificate has been acquired by a bona
fide purchaser, the Trust Administrator shall execute, countersign 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 Trust 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 Trust Administrator and its counsel) 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.
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Section
5.04. Persons
Deemed Owners.
The
Master Servicer, the Trustee, the Trust Administrator and any agent of the
Master Servicer, the Trust Administrator or the Trustee may treat the Person
in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for
all
other purposes whatsoever, and none of the Master Servicer, the Trust
Administrator or the Trustee nor any agent of the Master Servicer, the Trust
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
Trust 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 or Master Servicer shall request such information in writing from
the
Trust Administrator, then the Trust Administrator shall, within ten Business
Days after the receipt of such request, provide the Depositor, the Master
Servicer or such Certificateholders at such recipients’ expense the most recent
list of the Certificateholders of such Trust Fund held by the Trust
Administrator, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Trust 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.
Certificates
may be surrendered for registration of transfer or exchange at Corporate Trust
Office of the Trust Administrator. The Trust Administrator will give
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.
Section
5.07. Deposit
of Uncertificated REMIC Interests.
The
Uncertificated REMIC Interests shall be issued in uncertificated form to the
Underwriter pursuant to Section 4 of the Underwriting Agreement and transferred
by the Underwriter on the Closing Date to the Trustee to be held in trust
pursuant to terms of the Trust Agreement. U.S. Bank National
Association, as Trustee, and Xxxxx Fargo Bank, N.A., as Trust Administrator,
are
hereby directed and authorized to enter into the Trust Agreement. In
entering into the Trust Agreement and performing its obligations thereunder,
each of the Trustee and the Trust Administrator shall be entitled to the same
rights, protections and indemnities afforded to them under this Agreement in
their capacity as Trustee and Trust Administrator, respectively.
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ARTICLE
VI
THE
DEPOSITOR, THE MASTER SERVICER AND THE CUSTODIAN
Section
6.01. Respective
Liabilities of the Depositor, the Master Servicer and the
Custodian.
The
Depositor, the Master Servicer and the Custodian shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section
6.02. Merger
or Consolidation of the Depositor, the Master Servicer and the
Custodian.
The
Depositor, the Master Servicer and the Custodian will each keep in full effect
its existence, rights and franchises as a corporation or limited partnership,
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 or legal entity, as the case may be, in each
jurisdiction in which such qualification is or shall be necessary to protect
the
validity and enforceability of this Agreement, or any of the Mortgage Loans
and
to perform its respective duties under this Agreement.
Any
Person into which the Depositor, the Master Servicer or the Custodian may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor, the Master Servicer or the Custodian shall be a party,
or any Person succeeding to the business of the Depositor, the Master Servicer
or the Custodian, shall be the successor of the Depositor, the Master Servicer
or the Custodian, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Master Servicer
shall be qualified to service mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx
Mac.
Section
6.03. Limitation
on Liability of the Depositor, the Transferor, the Master Servicer, the
Custodian and Others.
None
of
the Depositor, the Transferor, the Master Servicer, the Custodian or any of
the
directors, officers, employees or agents of the Depositor, the Transferor,
the
Master Servicer or the Custodian shall be under any liability to the Trust
Fund
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
Transferor, the Master Servicer, the Custodian or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Transferor, the Master Servicer, the Custodian or any such Person
from any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder
or
by reason of reckless disregard of obligations and duties
hereunder. The Depositor, the Transferor, the Master Servicer, the
Custodian and any director, officer, employee or agent of the Depositor, the
Transferor, the Master Servicer or the Custodian may rely in good faith on
any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the
Transferor, the Master Servicer, the Custodian and any director, officer,
employee or agent of the Depositor, the Transferor, the Master Servicer or
the
Custodian shall be indemnified by the Trust Fund and held harmless against
any
loss, liability or expense incurred in connection with (i) any audit,
controversy or judicial proceeding relating to a governmental taxing authority,
(ii) the performance of its duties and obligations and the exercise of its
rights under this Agreement or the Certificates which constitute “unanticipated
expenses incurred by the REMIC” within the meaning of the REMIC Provisions, or
(iii) 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 in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the
Transferor, the Master Servicer and the Custodian 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 any of the
Depositor, the Transferor, the Master Servicer or the Custodian 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
interests of the Trustee, the Trust 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 Depositor, the Transferor, the Custodian and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account.
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Section
6.04. Limitation
on Resignation of Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except (a) upon appointment of a successor master servicer and receipt
by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates, or (b) upon determination that its duties hereunder are no longer
permissible under applicable law, or (c) pursuant to Section
6.05. Any such determination under clause (b) permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor master servicer shall have
assumed the Master Servicer’s responsibilities, duties, liabilities and
obligations hereunder.
Section
6.05. Sale
and Assignment of Master Servicing Rights.
The
Master Servicer may sell, assign or delegate its rights, duties and obligations
as Master Servicer under this Agreement in their entirety; provided,
however, that: (i) the purchaser or transferee accepting such
sale, assignment and delegation (a) shall be a Person qualified to service
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, (b) shall have a net worth of
not
less than $50,000,000 (unless otherwise approved by each Rating Agency pursuant
to clause (ii) below) or (c) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it
as
master servicer under this Agreement, from and after the effective date of
such
assumption agreement or delegation; (ii) each Rating Agency shall be given
prior
written notice of the identity of the proposed successor to the Master Servicer
and shall confirm in writing to the Master Servicer and the Trustee that any
such sale, assignment or delegation would not result in a withdrawal or a
downgrading of the rating on any Class of Certificates in effect immediately
prior to such sale, assignment; and (iii) the Master Servicer shall deliver
to
the Trustee an Officer’s Certificate and an Opinion of Independent Counsel, each
stating that all conditions precedent to such action under this Agreement have
been fulfilled and such action is permitted by and complies with the terms
of
this Agreement. No such sale, assignment or delegation shall affect
any liability of the Master Servicer arising prior to the effective date
thereof.
96
Section
6.06. Fees
of the Custodian.
The
Custodian shall be compensated as separately agreed in writing with the Master
Servicer.
ARTICLE
VII
DEFAULT
Section
7.01. Events
of Default.
“Master
Servicer Event of Termination,” wherever used herein, means any one of the
following events:
(i) The
Master Servicer fails to cause to be deposited in the Distribution Account
any
amount so required to be deposited pursuant to this Agreement, and such failure
continues unremedied for a period of one Business Day; or
(ii) The
Master Servicer fails to observe or perform in any material respect any other
material covenants and agreements set forth in this Agreement to be performed
by
it, which covenants and agreements materially affect the rights of
Certificateholders, and such failure continues unremedied for a period of 60
days after the date on which written notice of such failure, properly requiring
the same to be remedied, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and the Trustee or the Trust Administrator
by
the Holders of Certificates evidencing Voting Rights aggregating not less than
25% of the Certificates; or
(iii) There
is entered against the Master Servicer a decree or order by a court or agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the winding
up or liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or an
involuntary case is commenced against the Master Servicer under any applicable
insolvency or reorganization statute and the petition is not dismissed within
60
days after the commencement of the case; or
97
(iv) The
Master Servicer consents to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or
substantially all of its property; or the Master Servicer admits in writing
its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes
an
assignment for the benefit of its creditors, or voluntarily suspends payment
of
its obligations; or
(v) The
Master Servicer assigns or delegates its duties or rights under this Agreement
in contravention of the provisions permitting such assignment or delegation
under Section 6.04; or
(vi) any
failure by the Master Servicer to comply with Sections 3.21 or
3.22.
In
each
and every such case, so long as such Master Servicer Event of Termination with
respect to the Master Servicer shall not have been remedied, the Trustee may,
and (i) at the direction of the Holders of Certificates evidencing Voting Rights
aggregating not less than 25% of the Certificates or (ii) if such Master
Servicer Event of Termination is related to a failure by the Master Servicer
to
make any Advance required to be made by it pursuant to the terms of this
Agreement, the Trustee shall, in each case by notice in writing to the Master
Servicer, with a copy to the Rating Agencies, terminate all of the rights and
obligations (but not the liabilities accruing prior to the date of termination)
of the Master Servicer under this Agreement and in and to the Mortgage Loans
and/or the REO Property serviced by the Master Servicer and the proceeds
thereof; provided, however, with respect to a Master Servicer
Event of Termination set forth in clause (vi), the Depositor, at its sole
option, but with the consent of the Trustee, may permit a cure period for the
Master Servicer to deliver such Assessment of Compliance or Accountant’s
Attestation, but in no event later than March 25 of such year. Upon
the receipt by the Master Servicer of such written notice, all authority and
power of the Master Servicer under this Agreement, whether with respect to
the
Certificates, the Mortgage Loans, the Servicing Agreement, REO Property or
under
any other related agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or related REO Property) shall, subject to Section
7.02, automatically and without further action pass to and be vested in the
Trustee pursuant to this Section 7.01; and, without limitation, the Trustee
is
hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master Servicer’s
rights and obligations hereunder, including, without limitation, the transfer
to
the Trustee of (i) the Mortgage Files and all other property and amounts which
are then or should be part of the Issuing Entity or which thereafter become
part
of the Issuing Entity; and (ii) originals or copies of all documents of the
Master Servicer reasonably requested by the Trustee to enable it to assume
the
Master Servicer’s duties thereunder. In addition to any other amounts
which are then, or, notwithstanding the termination of its activities under
this
Agreement, may become payable to the Master Servicer under this Agreement,
the
Master Servicer shall be entitled to receive, out of any amount received on
account of a Mortgage Loan or related REO Property, that portion of such
payments which it would have received as reimbursement under this Agreement
if
notice of termination had not been given. The termination of the
rights and obligations of the Master Servicer shall not affect any obligations
incurred by the Master Servicer prior to such termination.
98
Notwithstanding
any termination of the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to receive, out of any late collection of a Scheduled
Payment on a Mortgage Loan which was due prior to the notice terminating such
Master Servicer’s rights and obligations as Master Servicer hereunder and
received after such notice, that portion thereof to which such Master Servicer
would have been entitled pursuant to Sections 3.10(a)(i) through (xi), and
any
other amounts payable to such Master Servicer hereunder the entitlement to
which
arose prior to the termination of its activities hereunder.
If
the
Master Servicer and the Trust Administrator are the same Person, then at any
time the Master Servicer is terminated pursuant to Section 7.01 hereof, the
Trust Administrator shall likewise be removed as trust administrator
hereunder.
Section
7.02. Trustee
to Act; Appointment of Successor.
On
and
after the time the Master Servicer receives a notice of termination pursuant
to
Section 7.01 hereof, the Trustee shall, subject to and to the extent provided
in
Section 3.05, be the successor to the Master Servicer in its capacity as Master
Servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties, liabilities
and
limitations on liabilities relating thereto placed on the Master Servicer by
the
terms and provisions hereof and applicable law including the obligation to
make
Advances pursuant to Section 4.01. As compensation therefor, the
Trustee shall be entitled to investment income on all funds to which the Master
Servicer would have been entitled in the Collection Account or Distribution
Account if the Master Servicer had continued to act
hereunder. Notwithstanding the foregoing, if the Trustee has become
the successor to the Master Servicer in accordance with Section 7.01 hereof,
the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if
it
is otherwise unable to so act, or if it has been requested in writing by Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced
by
the Certificates to do so, 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 the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor to the
Master Servicer shall be an institution which is a Xxxxxx Mae and Xxxxxxx Mac
approved seller/servicer in good standing, which has a net worth of at least
$15,000,000, and which is willing to master service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, which contains an assumption by such Person
of
the rights, powers, duties, responsibilities, obligations and liabilities of
the
Master Servicer (other than liabilities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master 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 the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.05 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor master
servicer out of payments on Mortgage Loans as it and such successor master
servicer shall agree; provided, however, that no such compensation
shall be in excess of the compensation permitted the Master Servicer
hereunder. The Trustee and such successor master servicer shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. Neither the Trustee nor any other successor
master 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 Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
99
Any
successor master servicer as Master Servicer shall give notice to the Servicer
of such change of master servicer and shall, during the term of its service
as
master servicer enforce the requirement of the Servicer to maintain in force
the
policy or policies pursuant to Section 3.11.
The
Trustee or successor master servicer shall be entitled to be reimbursed from
the
Master Servicer for all costs associated with the transfer of master servicing
from the predecessor master servicer, including, without limitation, any costs
or expenses (including but not limited to personnel time) associated with the
complete transfer of all master servicing data and the completion, correction
or
manipulation of such master servicing data as may be required by the Trustee
or
successor master servicer to correct any errors or insufficiencies in the master
servicing data or otherwise to enable the Trustee or successor master servicer
to master service the Mortgage Loans properly and effectively. If the
Master Servicer does not pay such reimbursement within thirty (30) days of
its
receipt of an invoice therefor, such reimbursement shall be an expense of the
Issuing Entity and the Trustee shall be entitled to withdraw such reimbursement
from amounts on deposit in the Distribution Account pursuant to Section
3.10(b)(iii); provided that the Master Servicer shall reimburse the
Issuing Entity for any such expense incurred by the Issuing Entity.
100
Section
7.03. Notification
to Certificateholders.
(a) Upon
any termination of or appointment of a successor to the Master Servicer, the
Trustee (or the Trust Administrator on its behalf) shall give prompt written
notice thereof to Certificateholders and to each Rating Agency.
(b) Within
60 days after the occurrence of any Master Servicer Event of Termination, the
Trustee or the Trust Administrator shall transmit by mail to all
Certificateholders notice of each such Master Servicer Event of Termination
hereunder actually known to a Responsible Officer of the Trustee or the Trust
Administrator, unless such Master Servicer Event of Termination shall have
been
cured or waived.
ARTICLE
VIII
CONCERNING
THE TRUSTEE
Section
8.01. Duties
of Trustee.
The
Trustee, prior to the occurrence of a Master Servicer Event of Termination
and
after the curing or waiver of all Master Servicer Events of Termination 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 Termination has occurred and remains uncured or unwaived,
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, but only until such time as a successor Master
Servicer shall have been appointed hereunder.
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 to the extent that forms of such documents have been provided
to the Trustee; provided, however, that the Trustee 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 Trustee shall notify the Certificateholders
of such non-conforming instrument in the event the Trustee, after so requesting,
does not receive a satisfactorily corrected 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; provided, however, that:
(i) unless
a Master Servicer Event of Termination of which a Responsible Officer of the
Trustee has actual knowledge shall have occurred and be continuing, 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 such duties and obligations as are specifically set forth in
this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee 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 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;
101
(ii) 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 shall
be
conclusively determined by a court of competent jurisdiction, such determination
no longer subject to appeal, that the Trustee was negligent in ascertaining
the
pertinent facts;
(iii) 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
Holders of Certificates evidencing not less than 25% of the Voting Rights of
Certificates relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising or omitting to exercise
any trust or power conferred upon the Trustee under this Agreement;
and
(iv) The
Trustee shall not be accountable, shall have no liability and makes no
representation as to any acts or omissions hereunder of the Master Servicer
until such time as the Trustee may be required to act as Master Servicer
pursuant to Section 7.02 and thereupon only for the acts or omissions of the
Trustee as successor Master Servicer.
(v) The
Trustee shall not be accountable, shall have no liability and makes no
representation as to any acts or omissions hereunder of the Custodian until
such
time as the Trustee may be required to terminate the Custodian pursuant to
Section 3.03 and thereupon only to the extent provided in Section
3.03.
Section
8.02. Certain
Matters Affecting the Trustee.
Except
as
otherwise provided in Section 8.01:
(i) the
Trustee 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 Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
102
(ii) the
Trustee 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
Trustee shall not be liable for any action taken, suffered or omitted by it
in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) prior
to the occurrence of a Master Servicer Event of Termination and after the curing
or waiver of all Master Servicer Events of Termination which may have occurred,
the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
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 Trustee of the costs, expenses or liabilities likely
to
be incurred by it in the making of such investigation is, in the opinion of
the
Trustee, not reasonably assured to the Trustee by the security afforded to
it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so
proceeding. The reasonable expense of every such examination shall be
paid by the Master Servicer or, if paid by the Trustee, shall be reimbursed
by
the Master Servicer upon demand. Nothing in this clause (iv) shall
derogate from the obligation of the Master Servicer to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors;
(v) the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or the Custodian
and the Trustee shall not be responsible for any misconduct or negligence on
the
part of any such agent, attorney or custodian appointed by the Trustee with
due
care;
(vi) 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, and none of the provisions
contained in this Agreement shall in any event require the Trustee to perform,
or be responsible for the manner of performance of, any of the obligations
of
the Master Servicer under this Agreement, except during such time, if any,
as
the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Master Servicer in accordance with the terms
of
this Agreement;
103
(vii) the
Trustee shall not be liable for any loss on any investment of funds pursuant
to
this Agreement (other than as issuer of the investment security);
(viii) the
Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Termination until a Responsible Officer of the Trustee obtains actual knowledge
of such failure or the Trustee receives written notice of such failure from
the
Master Servicer or the holders of Certificates evidencing not less than 25%
of
the Voting Rights of Certificates. In the absence of such receipt of
such notice, the Trustee may conclusively assume that there is no Master
Servicer Event of Termination;
(ix) 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 the provisions of 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.
The
Trustee 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
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 or the Transferor, as the case may be, 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
or
the Master Servicer of any funds paid to the Depositor or the Master Servicer
in
respect of the Mortgage Loans or deposited in or withdrawn from the Collection
Account or the Distribution Account by the Depositor, the Master Servicer or
the
Trust Administrator.
Section
8.04. Trustee
May Own Certificates.
The
Trustee 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
Trustee.
104
Section
8.05. Trustee’s
Fees and Expenses.
The
Trustee shall be compensated as separately agreed with the Master
Servicer. The Trustee 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
Trustee shall be indemnified by the Issuing Entity 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,
(b)
the Mortgage Loans or (c) the Certificates, (ii) incurred in connection with
the
performance of any of the Trustee’s duties hereunder, other than any loss,
liability or expense (x) incurred by reason of willful misfeasance, bad faith
or
negligence in the performance of any of the Trustee’s duties hereunder or (y)
which would not constitute an “unanticipated expense incurred by the REMIC”
within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii) and (iii)
incurred by reason of any action of the Trustee taken at the direction of the
Certificateholders. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, and except for any such
expense, disbursement or advance as may arise from the Trustee’s negligence, bad
faith or willful misconduct, or which would not be an “unanticipated expense”
within the meaning of the second preceding sentence, the Trustee shall be
reimbursed by the Issuing Entity for all reasonable expenses, disbursements
and
advances incurred or made by the Trustee 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 Trustee, to the extent
that
the Trustee must engage such Persons to perform acts or services hereunder
and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Issuing Entity shall fulfill its obligations under
this paragraph from amounts on deposit from time to time in the Distribution
Account.
Section
8.06. Eligibility
Requirements for Trustee.
The
Trustee 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 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 the provisions
of
this Section 8.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 8.07 hereof. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor
and
its affiliates or the Master Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Master Servicer
other than the Trustee in its role as successor to the Master
Servicer.
105
Section
8.07. Resignation
and Removal of 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 Master Servicer
and each Rating Agency not less than 60 days before the date specified in such
notice when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee
meeting such qualifications shall have been so appointed by the Depositor and
have accepted appointment within 30 days after the giving of such notice of
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 the provisions
of
Section 8.06 hereof 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 or the Master Servicer may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee so removed,
one
copy of which shall be delivered to the Master Servicer and one copy to the
successor trustee.
The
Holders of Certificates entitled to at least 51% of the Voting Rights may at
any
time remove the Trustee and appoint a successor trustee by written instrument
or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered by
the
successor Trustee to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. Notice of
any removal of the Trustee shall be given to each Rating Agency by the successor
trustee.
Any
resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section 8.07 shall become effective
upon acceptance by the successor trustee of appointment as provided in Section
8.08 hereof.
Section
8.08. Successor
Trustee.
Any
successor trustee appointed as provided in Section 8.07 hereof shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee and
the
Master Servicer an instrument accepting such appointment hereunder and thereupon
the resignation or removal of the predecessor trustee shall become effective
and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things
as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and
obligations.
106
No
successor trustee shall accept appointment as provided in this Section 8.08
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 8.06 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 trustee of appointment 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 by the successor trustee of
appointment, the successor trustee shall cause such notice to be mailed at
the
expense of the Depositor.
Section
8.09. Merger
or Consolidation of Trustee.
Any
corporation or other entity into which the Trustee 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 Trustee shall be
a
party, or any corporation or other entity succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation or other entity shall be eligible under the provisions of
Section 8.06 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
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 Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee 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 Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt
by it
of a request to do so, or in the case a Master Servicer Event of Termination
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:
107
(i) 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 on behalf of the Master 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;
(ii) No
trustee hereunder shall be held personally liable by reason 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; and
(iii) The
Trustee may at any time accept the resignation of or remove any separate trustee
or co-trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject
to
all the provisions of this Agreement, specifically including every provision
of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee and a copy thereof given to the Master 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.
108
ARTICLE
IX
CONCERNING
THE TRUST ADMINISTRATOR AND THE MASTER
SERVICER
Section
9.01. Duties
of Trust Administrator.
The
Trust
Administrator shall undertake to perform such duties and only such duties as
are
specifically set forth in this Agreement.
The
Trust
Administrator, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trust
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
Trust 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 Trust
Administrator shall notify the Certificateholders of such non-conforming
instrument in the event the Trust Administrator, after so requesting, does
not
receive a satisfactorily corrected instrument.
No
provision of this Agreement shall be construed to relieve the Trust
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 Trust Administrator shall be determined solely
by
the express provisions of this Agreement, the Trust 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 Trust Administrator and the Trust
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 Trust 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
Trust Administrator shall not be liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trust
Administrator, unless it shall be conclusively determined by a court of
competent jurisdiction, such determination no longer subject to appeal, that
the
Trust Administrator was negligent in ascertaining the pertinent
facts;
(iii) the
Trust Administrator 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 Holders of Certificates evidencing not less than 25% of the Voting
Rights of Certificates relating to the time, method and place of conducting
any
proceeding for any remedy available to the Trust Administrator, or exercising
or
omitting to exercise any trust or power conferred upon the Trust Administrator
under this Agreement; and
109
(iv) The
Trust Administrator shall not be accountable, shall have no liability and makes
no representation as to any acts or omissions hereunder of the Master Servicer
or the Trustee.
Section
9.02. Certain
Matters Affecting the Trust Administrator.
Except
as
otherwise provided in Section 9.01:
(i) the
Trust 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 Trust Administrator shall
have
no responsibility to ascertain or confirm the genuineness of any signature
of
any such party or parties;
(ii) the
Trust 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
Trust Administrator shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) the
Trust 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 Trust 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 Trust Administrator, not reasonably assured to the Trust
Administrator by the security afforded to it by the terms of this Agreement,
the
Trust 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 Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
110
(v) the
Trust 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
the
Custodian and the Trust Administrator shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed by the Trust Administrator with due care;
(vi) the
Trust 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 Trust
Administrator to perform, or be responsible for the manner of performance of,
any of the obligations of the Master Servicer under this Agreement, except
during such time, if any, as the Trust Administrator shall be the successor
to,
and be vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement;
(vii) [reserved];
(viii) [reserved];
(ix)
the Trust 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 Trust
Administrator reasonable security or indemnity satisfactory to the Trust
Administrator against the costs, expenses and liabilities which may be incurred
therein or thereby.
The
Trust
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
9.03. Trust
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 Transferor, as the case may be, and the
Trust
Administrator assumes no responsibility for their correctness. The
Trust Administrator makes no representations as to the validity or sufficiency
of this Agreement or of the Certificates or of any Mortgage Loan or related
document other than with respect to the Trust Administrator’s execution and
authentication of the Certificates. The Trust Administrator shall not
be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect
of
the Mortgage Loans or deposited in or withdrawn from the Collection Account
by
the Depositor or the Master Servicer.
111
Section
9.04. Trust
Administrator May Own Certificates.
The
Trust
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 Trust
Administrator.
Section
9.05. Trust
Administrator’s Fees and Expenses.
As
compensation for its activities hereunder, the Trust Administrator shall be
entitled to retain or withdraw from the Distribution Account an amount equal
to
the Trust Administrator Compensation. The Trust 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 Trust Administrator shall be indemnified by
the Issuing Entity 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, (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
Trust Administrator’s duties hereunder, (ii) incurred in connection with the
performance of any of the Trust Administrator’s duties hereunder, other than any
loss, liability or expense (x) incurred by reason of willful misfeasance, bad
faith or negligence in the performance of any of the Trust Administrator’s
duties hereunder or (y) which would not constitute an “unanticipated expense
incurred by the REMIC” within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii), or (iii) incurred by reason of any action of the Trust
Administrator taken at the direction of the Certificateholders. Such
indemnity shall survive the termination of this Agreement or the resignation
or
removal of the Trust Administrator hereunder. Without limiting the
foregoing, and except for any such expense, disbursement or advance as may
arise
from the Trust 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 Trust Administrator shall be reimbursed by the Issuing
Entity for all reasonable expenses, disbursements and advances incurred or
made
by the Trust 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 Trust Administrator, to the extent that the Trust
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 Issuing Entity shall fulfill its obligations under
this paragraph from amounts on deposit from time to time in the Distribution
Account.
112
Section
9.06. Eligibility
Requirements for Trust Administrator.
The
Trust
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 9.06 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 Trust Administrator shall cease to
be eligible in accordance with the provisions of this Section 9.06, the Trust
Administrator shall resign immediately in the manner and with the effect
specified in Section 9.07 hereof. The entity serving as Trust
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Section
9.07. Resignation
and Removal of Trust Administrator.
The
Trust
Administrator may at any time resign by giving written notice of resignation
to
the Depositor and the Trustee and each Rating Agency not less than 60 days
before the date specified in such notice when, subject to Section 9.08, such
resignation is to take effect, and acceptance by a successor trust administrator
in accordance with Section 9.08 meeting the qualifications set forth in Section
9.06. If no successor trust administrator meeting such qualifications
shall have been so appointed by the Depositor or the Trustee and have accepted
appointment within 30 days after the giving of such notice of resignation,
the
resigning Trust Administrator may petition any court of competent jurisdiction
for the appointment of a successor trust administrator.
If
at any
time the Trust Administrator shall cease to be eligible in accordance with
the
provisions of Section 9.06 hereof and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trust Administrator shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trust Administrator or of its property shall be appointed,
or
any public officer shall take charge or control of the Trust 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 Trust Administrator or the Trust Fund is located and the imposition
of
such tax would be avoided by the appointment of a different Trust Administrator,
then the Depositor or the Trustee may remove the Trust Administrator and appoint
a successor trust administrator by written instrument, in triplicate, one copy
of which instrument shall be delivered to the Trust Administrator so removed,
one copy of which shall be delivered to the Master Servicer and one copy to
the
successor trust administrator. If the Master Servicer and the Trust
Administrator are the same Person, then at any time the Master Servicer is
terminated pursuant to Section 7.01 hereof, the Depositor shall also remove
the
Trust Administrator as trust administrator hereunder.
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The
Holders of Certificates entitled to at least 51% of the Voting Rights may at
any
time remove the Trust Administrator and appoint a successor trust 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 Trust Administrator to the Trustee, one
complete set to the Trust Administrator so removed and one complete set to
the
successor so appointed. Notice of any removal of the Trust
Administrator shall be given to each Rating Agency by the successor trust
administrator.
Any
resignation or removal of the Trust Administrator and appointment of a successor
trust administrator pursuant to any of the provisions of this Section 9.07
shall
become effective upon acceptance by the successor trust administrator of
appointment as provided in Section 9.08 hereof. If the Trust
Administrator and the Master Servicer are the same Person, then at any time
the
Trust Administrator is removed pursuant to this Section 9.07, the Master
Servicer shall likewise be terminated as master servicer hereunder.
The
Trust
Administrator (i) may not be an Originator, Master Servicer, Servicer, the
Depositor or an affiliate of the Depositor unless the Trust Administrator is
in
an institutional trust department, (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, or the
equivalent rating by S&P or Xxxxx'x (or such rating acceptable to Fitch
pursuant to a rating confirmation). If no successor trust
administrator shall have been appointed and shall have accepted appointment
within 60 days after Xxxxx Fargo Bank, N.A., as Trust Administrator, ceases
to
be the trust administrator pursuant to this Section 9.07, then the Trustee
shall
perform the duties of the Trust Administrator pursuant to this Agreement. The
Trustee shall notify the Rating Agencies of any change of Trust
Administrator. In such event, the Trustee shall assume all of the
rights and obligations of the Trust Administrator hereunder arising thereafter
except that the Trustee shall not be (i) liable for losses of the predecessor
Trust Administrator or any acts or omissions of the predecessor Trust
Administrator hereunder or (ii) deemed to have made any representations and
warranties of the Trust Administrator made herein. The Trustee shall
not be accountable for, shall have no liability for and makes no representation
as to any acts or omissions hereunder of the Trust Administrator until such
time
as the Trustee may be required to act as successor Trust Administrator pursuant
to this Section 9.07 and thereupon only for the acts or omissions of the Trustee
as successor Trust Administrator.
The
Trustee or successor trust administrator shall be entitled to be reimbursed
from
the Master Servicer for all reasonable costs and expenses associated with the
transfer of the duties of the Trust Administrator from the predecessor Trust
Administrator, including, without limitation, any costs or expenses associated
with the complete transfer of all trust administrator data and the completion,
correction or manipulation of such trust administrator data as may be required
by the Trustee or successor trust administrator to correct any errors or
insufficiencies in such trust administrator data or otherwise to enable the
Trustee or successor trust administrator to perform the duties of the Trust
Administrator properly and effectively.
The
Trustee, as successor Trust Administrator, as compensation for its activities
hereunder, shall be entitled to retain or withdraw from the Distribution Account
an amount equal to the Trust Administrator Compensation. To the
extent such Trust Administrator Compensation is less than the current market
rate that the Trustee would charge for providing similar trust administrator
services in a similarly structured transaction, as mutually determined by the
Trustee and the successor Master Servicer at the time the Trustee becomes the
successor Trust Administrator, the successor Master Servicer, out of its own
funds, shall pay the Trustee, as successor Trust Administrator, additional
compensation in an amount equal to the difference between the Trust
Administrator Compensation and such current market rate for such trust
administrator services, as separately negotiated by the successor Master
Servicer and the Trustee at the time the Trustee becomes the successor Trust
Administrator.
114
Section
9.08. Successor
Trust Administrator.
Any
successor trust administrator appointed as provided in Section 9.07 hereof
shall
execute, acknowledge and deliver to the Depositor and to its predecessor trust
administrator and the Trustee an instrument accepting such appointment hereunder
and thereupon the resignation or removal of the predecessor trust administrator
shall become effective and such successor trust 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 trust administrator herein. The
Depositor, the Trustee, the Master Servicer and the predecessor trust
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 trust administrator all such rights, powers, duties,
and obligations.
No
successor trust administrator shall accept appointment as provided in this
Section 9.08 unless at the time of such acceptance such successor trust
administrator shall be eligible under the provisions of Section 9.06 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 trust administrator of appointment as provided in
this
Section 9.08, the Depositor shall mail notice of the succession of such trust
administrator hereunder to all Holders of Certificates. If the
Depositor fails to mail such notice within 10 days after acceptance by the
successor trust administrator of appointment, the successor trust administrator
shall cause such notice to be mailed at the expense of the
Depositor.
Section
9.09. Merger
or Consolidation of Trust Administrator.
Any
corporation or other entity into which the Trust 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
Trust
Administrator shall be a party, or any corporation or other entity succeeding
to
the business of the Trust Administrator, shall be the successor of the Trust
Administrator hereunder, provided that such corporation or other entity
shall be eligible under the provisions of Section 9.06 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.
115
Section
9.10. [Reserved].
Section
9.11. Tax
Matters.
It
is
intended that the assets with respect to which any REMIC election 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 Master Servicer covenants and agrees that it shall act as agent
(and the Master Servicer is hereby appointed to act as agent) on behalf of
such
REMIC and that in such capacity it shall:
(a) prepare,
submit to the Trustee for execution, and file, or cause to be prepared and
filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
(REMIC) Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to such
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 or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption;
(b) apply
for an Employee Identification Number from the Internal Revenue Service via
Form
SS-4 or other acceptable method for such REMIC and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Form 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at
the
time or times in the manner required by the Code;
(c) make
or cause to be made elections that such assets be treated as a REMIC on the
federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) provide
information necessary for the computation of tax imposed on the transfer of
a
Residual Certificate to a Person that is not a Permitted Transferee described
in
clauses (i)-(iv) of the definition thereof, or an agent (including a broker,
nominee or other middleman) of a non-Permitted Transferee (the reasonable cost
of computing and furnishing such information may be charged to the Person liable
for such tax);
(e) 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 as a REMIC under the REMIC Provisions;
116
(f) not
knowingly or intentionally take any action or omit to take any action that
would
cause the termination of the REMIC status;
(g) not
permit the creation of any interests in such REMIC other than as set forth
in
the Preliminary Statement;
(h) not
receive any amount representing a fee or other compensation for services (except
as otherwise permitted by this Agreement);
(i) not
receive any income attributable to any asset which is neither a “qualified
mortgage” nor a “permitted investment” within the meaning of the REMIC
Provisions;
(j) not
receive any contributions to such REMIC after the Startup Day that would be
subject to tax under Section 860G(d) of the Code;
(k) not
dispose of any assets of such REMIC at a gain if such disposition would be
a
“prohibited transaction” within the meaning of Section 860F(a)(2) of the
Code;
(l) pay,
from the sources specified in the next to last paragraph of this Section 9.11,
the amount of any federal or state tax, including prohibited transaction taxes
as described below, imposed on such REMIC prior to its termination when and
as
the same shall be due and payable (but such obligation shall not prevent the
Master Servicer or any other appropriate Person from contesting any such tax
in
appropriate proceedings and shall not prevent the Master Servicer from causing
the withholding of payment of such tax, if permitted by law, pending the outcome
of such proceedings);
(m) ensure
that federal, state or local income tax or information returns shall 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
(n) maintain
records relating to such REMIC, including but not limited to the income,
expenses, assets and liabilities thereof and the 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 A-LR Certificates shall
act as “tax matters person” within the meaning of Treasury Regulations Section
1.860F-4(d) for the Subsidiary REMIC and the Holder of the largest Percentage
Interest of the Class A-UR Certificates shall act as “tax matters person” within
the meaning of Treasury Regulations Section 1.860F-4(d) for each remaining
REMIC
created pursuant to this Agreement. The Master Servicer is hereby
designated as agent of such Class A-LR or Class A-UR Certificateholder for
such
purposes (or if the Master Servicer is not so permitted, such Holder shall
be
the tax matters person in accordance with the REMIC Provisions). In
such capacity, the Master Servicer shall, as and when necessary and appropriate,
represent the related REMIC 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 such REMIC,
enter
into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of such REMIC, and otherwise
act
on behalf of such REMIC in relation to any tax matter or controversy involving
it.
117
In
order
to enable the Master Servicer to perform its duties as set forth herein, the
Depositor shall provide, or cause to be provided, to the Master Servicer within
ten (10) days after the Closing Date all information or data that the Master
Servicer requests in writing and determines to be relevant for tax purposes
to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of
the Certificates and the Mortgage Loans. Thereafter, the Depositor
shall provide to the Master Servicer promptly upon written request therefor,
any
such additional information or data that the Master Servicer may, from time
to
time, reasonably request in order to enable the Master Servicer to perform
its
duties as set forth herein. The Depositor hereby indemnifies the
Master Servicer for any losses, liabilities, damages, claims or expenses of
the
Master Servicer arising from any errors or miscalculations of the Master
Servicer that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Master Servicer on a timely
basis.
In
the
event that any tax is imposed on “prohibited transactions” of any REMIC
hereunder as defined in Section 860F(a)(2) of the Code, on the “net income from
foreclosure property” of such REMIC as defined in Section 860G(c) of the Code,
on any contribution to such REMIC after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed, if not paid as otherwise
provided for herein, such tax shall be paid by (i) the Master Servicer, the
Trustee or the Trust Administrator, respectively, if any such other tax arises
out of or results from a breach by the Master Servicer, the Trustee or the
Trust
Administrator, respectively, of any of its obligations under this Agreement,
(ii) the Transferor, if any such tax arises out of or results from the
Transferor’s obligation to repurchase a Mortgage Loan pursuant to Section 2.02
or 2.03 or (iii) in all other cases, or in the event that the Trustee, the
Trust
Administrator, the Master Servicer or the Transferor fails to honor its
obligations under the preceding clause (i) or (ii), any such tax will be paid
with amounts otherwise to be distributed to the Certificateholders, as provided
in Section 3.10(b).
Section
9.12. Periodic
Filings.
The
Master Servicer shall reasonably cooperate with the Depositor to enable the
Issuing Entity to satisfy its reporting requirements under the Exchange
Act.
(a) (i) Within
15 days after each Distribution Date (subject to permitted extensions under
the
Exchange Act), the Trust Administrator shall prepare and file on behalf of
the
Issuing Entity any Form 10-D required by the Exchange Act, in form and substance
as required by the Exchange Act. The Trust Administrator shall file
each Form 10-D with a copy of the related Distribution Date Statement attached
thereto. Any disclosure in addition to the Distribution Date
Statement that is required to be included on Form 10-D (“Additional Form 10-D
Disclosure”) shall be reported by the parties set forth on Exhibit T hereto
to the Depositor and Trust Administrator and be directed and approved by and
at
the direction of the Depositor pursuant to the following paragraph, and the
Trust Administrator will have no duty or liability for any failure hereunder
to
determine or prepare any Additional Form 10-D Disclosure, except to the extent
of its obligations set forth in the next paragraph.
118
(ii) For
so long as the Issuing Entity is subject to the Exchange Act reporting